Send me real-time posts from this site at my email

Saudi Aramco Announces Intent to Increase Capacity by 1 Million Barrels of Oil Per Day

Saudi Arabian oil giant Saudi Aramco today reported second-quarter net income of $6.6 billion, a decrease of 73% from the $24.7 billion it earned in the year ago period due to the COVID-19 pandemic's impacts on demand and pricing. Income for the first half of 2020 was down 51% compared to the corresponding period in 2019.

The company said its "low production cost" and "unique scale" led to free cash flow that allowed it to maintain its $18.75 billion dividend for the second quarter, in line with the first-quarter payout. The company averaged crude oil production of 9.3 million barrels per day (mmbpd), and said it produced a single day record output of 12.1 (mmbpd) of crude oil on April 2. It intends to increase production capacity to 13 mmbpd without a major impact on capital expenditures, according to a Reuters report.

Image source: Getty Images.

President and CEO Amin Nasser said that the company is seeing some recovery in demand as global economies begin to reaccelerate. He was quoted in a company press release as saying, "We will continue to pursue our long-term growth and diversification strategy to capture unrealized and additional value." He added that capital expenditure for 2020 should be at the lower end of the $25 billion to $30 billion range.

Oil prices have rebounded from historic lows caused by the demand shock related to COVID-19 shutdowns and stay-at-home policies. After an April crash that sent market prices into negative territory, crude prices are now hovering about the $40-PER-BARREL level. Saudi Aramco says its upstream capital costs for oil equivalent produced are $4.70 per barrel, the lowest in the industry.

10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

Stock Advisor returns as of 2/1/20

The Motley Fool has a disclosure policy.


Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue