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Saudi Aramco Reports $42 Billion in Profit as Cash Rolls In for Oil Giants

Saudi Aramco Reports $42 Billion in Profit as Cash Rolls In for Oil Giants

Business|Saudi Aramco Reports $42 Billion in Profit as Cash Rolls In

https://www.nytimes.com/2022/11/01/business/saudi-aramco-oil-profit.html

The bumper earnings from the world’s largest oil company were, nonetheless, a slight decline on the previous quarter.

A massive Saudi Aramco oil facility in the background, with an oil worker wearing a beige uniform and hard hat in the foreground.
A Saudi Aramco plant in Abqaiq, Saudi Arabia. The company said that it expected demand for oil to increase through the decade. Credit…Maxim Shemetov/Reuters

Stanley Reed

Saudi Aramco, the world’s largest oil company, said on Tuesday that it had earned $42.4 billion in net income in the third quarter. The figure was more than double the nearly $20 billion that Exxon Mobil earned for the period.

It also enabled Saudi Aramco, which is state-controlled and has a near-monopoly on Saudi Arabia’s oil output, to pay a large dividend — $18.75 billion — mostly to the country’s government.

Aramco is the latest oil company to report very large profits in an environment marked by high petroleum prices following Russia’s invasion of Ukraine in February.

The earnings were nearly 40 percent above profits from the same period a year earlier. But they also represented a slight fall from the second quarter this year, when Aramco earned a record $48 billion.

The main reason for the drop appears to have been lower oil prices. Aramco said that it was paid an average of $101.70 a barrel for its oil during the July-September period, compared with $113.20 a barrel in the previous quarter.

In an apparent effort to bolster prices, Saudi Arabia and allies recently announced a cut in oil production amounting to about 2 percent of global output. The move angered the Biden administration, which is pushing oil producers, including those operating in the United States, to ramp up output to lower gasoline prices for consumers. With U.S. midterm elections nearing, President Biden on Monday threatened to seek a new windfall tax on major oil and gas companies unless they increased production.

The Saudi company says that it is continuing to invest in added production.

“Our long-term view is that oil demand will continue to grow for the rest of the decade,” said Amin H. Nasser, Aramco’s chief executive, in a statement.

The company restated its plan to complete an investment program that would, by 2027, raise its production capacity to 13 million barrels a day, from around 12 million barrels a day now. Saudi Arabia’s quota in the OPEC Plus producers’ group was recently reduced to about 10.5 million barrels a day, from 11 million barrels.

Source: https://www.nytimes.com/2022/11/01/business/saudi-aramco-oil-profit.html