BAKU, Azerbaijan, May 12
By Leman Zeynalova – Trend:
Saudi Aramco’s net income remained robust at $16.7 billion for the first quarter, despite lower crude oil prices, as well as declining refining and chemicals margins and inventory re-measurement losses, Trend reports citing the company.
Cash flow from operating activities was strong at $22.4 billion in the first quarter, compared to $24.5 billion in the same period of 2019. The impact of declining crude oil prices and refining and chemicals margins was partially offset by favorable movements in working capital.
Free cash flow was robust at $15.0 billion in the first quarter, compared to $17.4 billion in the same period last year.
The company’s balance sheet remains strong and gearing ratio decreased from -0.2 percent on December 31, 2019 to -4.9 percent on March 31, 2020.
Total dividends of $13.4 billion were paid in the first quarter, in respect of the fourth quarter of 2019. Dividends of $18.75 billion for the first quarter of 2020 are the highest of any listed company worldwide and will be paid in the second quarter.
First quarter capital expenditures were $7.4 billion, compared to $7.2 billion for the same period in 2019. In light of market conditions and recent commodity price volatility, the Company continues to expect capital spending for 2020 to be between $25 billion and $30 billion. Capital expenditures for 2021 and beyond remain under review.
Under challenging market conditions, Aramco maintained its pre-eminence in oil and gas production.
Aramco, through its wholly owned subsidiary Aramco Gulf Operations Company Ltd. (AGOC), resumed operations at Al-Khafji Joint Operations (KJO). AGOC operates in the offshore partitioned territory between the Kingdom of Saudi Arabia and the State of Kuwait, with a 50% ownership in KJO.
Aramco Trading Company signed an agreement to offtake Aramco Gulf Operations Company’s full share of crude oil production following the restart of KJO.
During the first quarter, the Fadhili Gas Plant increased its processing capacity from 1.5 billion standard cubic feet per day (bscfd) at year-end 2019 to reach 2.0 bscfd during the first quarter of 2020. Progress remains on track and the plant is expected to reach full capacity of 2.5 bscfd this year.
Despite a challenging market environment, the downstream business is keeping pace with its long-term strategy to capture value across the hydrocarbon value chain through further strategic integration and diversification of its operations.