The green color prevailed in the financial disclosure figures for Saudi Aramco, which is classified as the largest oil company in the world, according to data for the first quarter of 2021.
The profits and the remarkable growth in revenues reflect a positive future for the global oil market, after Saudi Arabia and Russia led an agreement to reduce production from May 2020 and expires in April 2022.
Aramco’s growth rates during the first quarter of 2021 show an increase in the company’s total revenues by 20.6% during the first quarter on an annual basis, an increase in operating profits by 17.1%, and an increase in net profit by 30.3%.
The company’s net profit in the first quarter of 2021 was about $ 21.7 billion, while revenues were $ 72.6 billion, and the operating profit of the global oil giant was about $ 40.5 billion.
These results come despite Saudi Arabia losing sales revenue of 59 million barrels of crude oil during February and March 2021, with a total value of $ 3.65 billion, with an average of $ 62 per barrel.
This quantity of crude oil represents the voluntary reduction that Saudi Arabia announced last January and began implementing it from the next February, by one million barrels of its total production, to be added to its share in the reduction within the “OPEC +” alliance.
The improvement in global demand for crude would not have occurred without the reduction in production by the coalition by 9.7 million barrels per day of crude oil before it was gradually eased, and the positive effects that this had on global energy companies.
Also, the financial results in abnormal circumstances highlight the effectiveness of investing in Aramco as a guaranteed and quick-return profit tool for all investors, despite the negative consequences of the outbreak of the Corona pandemic on global crude demand.
Therefore, the financial results prove Aramco’s ability to operate and profit in one of the worst conditions for the crude oil industry since World War III, and this is also due to the company’s success in reducing the cost of producing a barrel of oil to an average of $ 2.50, the lowest in the world.
These results will be a strong impetus for the company during the coming period, which precedes the offering of 1% of its shares for sale in favor of a foreign energy company, according to statements made the week before last by Saudi Crown Prince Mohammed bin Salman.
Bin Salman said in an interview marking 5 years after the launch of Saudi Vision 2030: “The Kingdom is in negotiations with potential partners to sell a stake in the oil giant Aramco … The discussion is currently to sell 1% of it to a foreign investor.”
He added that there is a plan to offer another part of the company’s shares in a second public offering after the first IPO that was successful and was offered in December 2019, “in addition to the possibility of the Public Investment Fund owning a stake in Aramco.”
Aramco’s historic offering
Aramco was listed on the Saudi Stock Exchange in December 2019 after the world’s largest initial public offering (IPO), valued at $ 29.4 billion, against the sale of 1.7 percent of its shares.
Last March, Aramco announced that in 2020 it achieved net profits of $ 49 billion, a 44.4% decline from the profits of the previous year, due to the decline in crude oil prices with the decline in global demand due to the Covid-19 epidemic.
Aramco will earn $ 12.4 billion under a deal with an American company related to the use of its pipeline network, as the kingdom seeks to attract foreign investment and diversify its economy.
Aramco manages oil and gas fields throughout the Kingdom and abroad, and contributes with its subsidiaries around the world to provide technical expertise in supply chain management, exploration, refining and chemicals.
Aramco oversees the second largest oil reserves in the world, is the largest oil producer in the world, and pumps 10% of global supplies.
To diversify its oil activities, Aramco expanded its refining operations and petrochemical industry, with the aim of increasing its chemical production nearly three-fold, to reach 34 million tons annually by 2030, as part of the Kingdom’s 2030 vision.
The company is also working to increase its refining capacity worldwide to between 8 and 10 million barrels per day from about 5 million barrels per day.