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Energy Review By Tsvetana Paraskova
Saudi Arabia’s state-owned oil giant Aramco reported bumper profits for the second quarter, while a new Iranian president was sworn in amid a rise in tensions in the Middle East in the past month.
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Saudi Aramco’s net income jumped by 288% year over year to US$25.5 billion for the second quarter. Last year in Q2, the oil giant had booked US$6.6 billion in net income. For the first half of 2021, Saudi Aramco posted a net income of US$47.2 billion, a 103% surge compared to US$23.2 billion booked for the first half of 2020. The significantly higher profits in 2021 were primarily driven by higher crude oil prices, improved downstream margins, and the consolidation of SABIC’s results, partially offset by lower crude oil volumes sold and higher crude oil production royalties, Aramco said in a statement. Second-quarter net income was also the result of the recovery in global oil demand, supported by the easing of COVID-19 restrictions, vaccination campaigns, stimulus measures, and accelerating activity in key markets. The company declared US$18.8 billion dividend for the second quarter, keeping the annual US$75 billion dividend to shareholders, the largest of which with over 98% is the Kingdom of Saudi Arabia. “We continue to move forward on a number of strategic programs, which focus on sustainability and low-carbon fuels, maximising the value of our assets, and advancing our downstream integration and expansion journey. For all these reasons and more, I remain extremely positive about the second half of 2021 and beyond,” Aramco’s president and chief executive officer Amin Nasser said, commenting on the results.
Saudi Aramco, the world’s largest oil firm by production and market capitalisation, also joined the biggest solar power project in Saudi Arabia, while the state oil and gas firm of the United Arab Emirates (UAE), the Abu Dhabi National Oil Company (ADNOC), awarded engineering services contracts and signed deals to supply ammonia to Japanese customers.
Saudi Aramco also said that its crude oil increment programs at the Marjan and Berri oil fields are in the final stages of detailed engineering, and construction activities continue to progress. The two projects are expected to add oil production capacity of 300,000 barrels per day (bpd) and 250,000 bpd, respectively, by 2025.
Saudi Aramco’s Q2 profit soars as oil prices rally
The Saudi oil firm also dismissed in early August media reports that it would start Bitcoin mining.
Aramco reported surging profits and cash flows for the second quarter, much like all international oil majors which benefited from the significantly higher oil and gas prices this year compared to the pandemic-induced price collapse in the spring of 2020.
www.ogv.energy I September 2021
“With reference to recent reports claiming that the Company will embark on Bitcoin mining activities, Aramco confirms that these claims are completely false and inaccurate,” the Saudi oil giant said.
New Iranian president sworn In amid rising tension in Middle East Iran’s new President Ebrahim Raisi was sworn in on 5 August, days after a drone attack on the commercial vessel Mercer Street offshore Oman killed two crew members. The attack on the Israeli-linked Mercer Street tanker most likely came from Iran, according to statements from the governments of the UK, the US, and Israel. “UK assessments concluded that it is highly likely that Iran attacked the merchant vessel MV Mercer Street in international waters off Oman using unmanned aerial vehicles,” the UK Foreign Office said. “We believe this attack was deliberate, targeted, and a clear violation of international law by Iran,” Foreign Secretary Dominic Raab said, adding “Iran must end such attacks, and vessels must be allowed to navigate freely in accordance with international law.” “Upon review of the available information, we are confident that Iran conducted this attack, which killed two innocent people, using one-way explosive UAVs, a lethal capability it is increasingly employing throughout the region,” US Secretary of State Antony Blinken said in a statement. Days after the attack on Mercer Street, another tanker, Asphalt Princess, was a target of an attempted hijacking, an incident that ended with no casualties or injuries. The incidents with the tankers in critical shipping lanes in the Middle East raised the tensions between Israel and Iran, and the West and Iran, while the Iran nuclear talks continued to be on hold awaiting the transfer of power in the Islamic Republic. The stalled nuclear talks pushed the timeline of a potential return of Iranian oil to the global market to 2022 at the earliest.
Middle East to lead global gas capacity growth in medium term The Middle East is expected to lead growth in capacity in the global gas processing industry from planned and announced projects between 2021 and 2025, data and analytics company GlobalData said in a report. The Middle East is set to account for around 37% of the global gas processing capacity growth
