Saudi Aramco Q3 profits soar 158 per cent on higher oil prices

RIYADH — Saudi Aramco's earnings rose 158 per cent year-on-year in the third quarter on higher oil prices and volumes sold as the global economy recovered, it said on Sunday.

Aramco's profits surge comes as world leaders prepare for the UN's COP26 climate summit starting in Glasgow later on Sunday, a key meeting in the battle against global warming.

Aramco's net income was $30.4 billion in the third quarter, up from $11.8 billion in Q3 last year, with free cash flow more than doubling to $28.7 billion. Shareholders will receive $18.8 billion in dividends.

The profits are the biggest since Aramco listed on the Saudi stock exchange in December 2019, before suffering a 44.4 per cent slump in 2020.

"The increase in net income was primarily the result of higher crude oil prices and volumes sold," the Saudi oil giant said in its earnings statement.

It also cited "stronger refining and chemicals margins in Q3, which were underpinned by rebounding global energy demand and increased economic activity in key markets".

The latest rise comes after profits nearly quadrupled in Q2 as the world economy bounced back from the COVID crisis, lifting demand and pushing oil prices back above $80 a barrel.

"Some headwinds still exist for the global economy, partly due to supply chain bottlenecks, but we are optimistic that energy demand will remain healthy for the foreseeable future," Aramco Chief Executive Amin Nasser said.

Nasser claimed that Aramco will "build on our track record of low-cost and low-carbon intensity performance" after announcing last week that it intends to achieve net zero carbon emissions in its operations by 2050.

The carbon-neutrality pledge by Aramco, the world's biggest oil producer, was met by scepticism by environmentalists as it excludes emissions from the company's products.

Saudi Arabia, one of the world's biggest polluters as well as the top oil exporter, has also pledged to achieve net zero carbon emissions by 2060.

Earlier this month Aramco announced that it planned to raise oil production to a maximum sustainable capacity of 13 million barrels a day by 2027.

In the latest statement, Aramco said its total hydrocarbon production was the equivalent of 12.9 million barrels a day, including 9.5 million barrels of crude.

It said it also has a 30 per cent stake in the 1.5 gigawatt Sudair solar plant, which will be one of the biggest in the region and will start producing in the second half of 2022.

Aramco added that it has expanded an investment programme partly focused on sustainability and would be "targeting new opportunities to achieve carbon footprint reduction".