Saudi Aramco, one of the largest oil companies in the world, released its quarterly earnings earlier this week for the second quarter.
The oil and gas company owned by the kingdom of Saudi Arabia witnessed an increase in net income by nearly 23 billion dollars to post a 48.4 billion dollars net income in the second quarter. In the second quarter of the previous financial year, the net income was posted at 25.5 billion dollars.
Similarly, the free cash flow of Saudi Aramco increased by 53% from Q2 of the previous financial year to 34.6 billion dollars in the second quarter.
The quarterly dividend payout of the company towards shareholders remained unchanged at 18.8 billion dollars during the quarter. It is important to note that the dividend from the oil and gas industry is one of the major revenue of the Kingdom of Saudi Arabia.
This was due to the increasing demand for oil in the European market due to economic sanctions against Russia and the counter-sanctions placed by Russia.
The economic war between the European Union and Russia coupled with global fears of supply chain shortage pushed oil and gas prices upwards in the market.
Saudi Aramco, which is in the production, refining and sales of oil profited hugely from the windfall effect. The company’s decision to expand production capacity and regulate the amount of oil supply in the world market kept the prices high.
Even though various other oil companies such as Shell and Exxon Mobil made large amounts of profits, the huge refining and storage base of Saudi Aramco helped the state-owned entity to reap profits.
Chief Executive Officer of Saudi Aramco, Amin Nasser told reporters that the company is planning to invest in sectors such as hydrogen production, Renewable energy etc. This would reportedly help the company achieve the goal of net zero carbon emissions by 2050.
The company also said that it is not planning to cut back on any absolute emission numbers until 2035.
Amin Nasser also told the reporters that he believes global demand for oil and gas would go up in the coming years. Even though there are economic pressures and weak forecasts on oil demands globally, nothing of this is expected to affect the company.
A few weeks ago, the President of the United States of America, Joe Biden, flew to Riyadh to meet with the leader of the country and industrial giants to request increasing oil output.
Even though western analysts hoped that The Organization of the Petroleum Exporting Countries (OPEC) would increase its oil output, the intergovernmental organisation decided to just increase production by 100,000 barrels a day.