Saudi Arabia’s state-owned oil company Aramco, which is under pressure from the West to increase production amid a spike in prices, pledged to increase investment by about 50% this year as it announced a doubling of its profits in 2021, it said. Reuters.
Saudi Aramco benefited from a more than 50% rise in oil prices last year as increased COVID-19 vaccination rates and easing of restrictions resulted in demand outstripping supply.
Prices then jumped above $ 100 a barrel last month to a 14-year high following Russia’s invasion of Ukraine, leading Western nations to urge Saudi Arabia and other producers to increase production.
Aramco said it aims to increase its capital expenditure (capex) to $ 40-50 billion this year, with a further increase expected around the middle of the decade. Capex was $ 31.9 billion last year, up 18% from 2020 – an increase of about 50% for this year.
The company had net profits of $ 110 billion last year, up from $ 49 billion a year earlier. Analysts were expecting a net profit of $ 106 billion, according to the average estimate of analysts at Refinitiv’s Eikon.
Shares of Aramco rose more than 4% in the first trading to a high of 43.85 rials, valuing the company at 8.76 trillion. rials ($ 2.34 trillion).
The valuation at 2 trillion. dollars was a goal pursued by Crown Prince Mohammed bin Salman before the company’s initial public offering of a record $ 29.4 billion in 2019.
He has announced plans to sell more Aramco shares. The rise in Aramco’s valuation on Sunday brought it above that of Microsoft, although it lags behind Apple by 2.68 trillion. dollars.
The Saudi government said last month that Crown Prince Mohammed, who is leading a massive investment effort to diversify the kingdom’s economy, had transferred a 4% stake in Aramco to the state’s wealth fund.
Aramco has stated that it plans to increase its “maximum sustainable production” in crude oil to 13 million barrels per day by 2027 and wants to increase gas production by more than 50% by 2030.
The company’s average hydrocarbon production was 12.3 million barrels of equivalent oil per day last year.
Aramco also plans to increase hydrogen exports and become a world leader in carbon capture and storage technology, he said.
“Although economic conditions have improved significantly, the outlook remains uncertain due to various macroeconomic and geopolitical factors,” CEO Amin Nasser said in a statement.
“But our investment plan aims to tap into the growing long-term demand for reliable, affordable and increasingly secure and sustainable energy.”
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
