Aramco reports strong performance and capex growth

Aramco has reported profits of US$29.2 bn in Q2 2024 and US$56.3bn for H1 2024, slightly down on the corresponding periods of 2023, and expects to issue total dividends of US$124.2bn this year, according to its latest results

Aramco’s capital expenditure in the second quarter rose nearly 14% year-on-year to US$12.1bn, with H2 capex standing at US$23bn compared with US$19.2bn in the first half of 2023. Upstream capex rose particularly strongly, (24% in H2 2024 compared with H2 2023), reflecting progress associated with crude oil increments to maintain maximum sustainable capacity (MSC) at 12 mn bpd, and continued development of multiple gas projects to support the strategic expansion of the gas business.

Aramco president & CEO Amin H. Nasser said, “We have delivered market-leading performance once again, with strong earnings and cash flows in the first half of the year. Leveraging these strong earnings, we continued to deliver a base dividend that is sustainable and progressive, and a performance-linked dividend that shares the upside with our shareholders.

“We have also continued to create and deliver both value and growth, as demonstrated by the positive investor response to the government’s secondary public offering of Aramco shares and our recent US$6bn bond issuance."

Operational performance

In terms of operational performance, Aramco highlights progress in key strategic areas, notably its strategic gas expansion, with the announcement of contract awards worth more than US$25bn as it targets sales gas production growth of more than 60% by 2030, compared to 2021 levels. They include contracts for the Jafurah unconventional development Phase Two, Master Gas System Phase 3 and Fadhili Gas Plant expansion.

Aramco reports that in the second quarter, it achieved total hydrocarbon production of 12.3mn boed, while exploration activities resulted in seven oil and gas discoveries in the Kingdom’s Eastern Province and Empty Quarter, consisting of two unconventional oilfields, one Arabian light oil reservoir, two natural gas fields, and two natural gas reservoirs. Procurement and construction activities are proceeding on the Marjan and Berri and Zuluf crude oil increments.

Other highlights include partnering with leading car manufacturers on lower-emission vehicle technologies; expanding its new energies portfolio, with the acquisition of a 50% interest in the Blue Hydrogen Industrial Gases Company (BHIG); growing its global retail network with the acquisition of a 40% equity stake in Gas & Oil Pakistan Ltd; and the agreement with Pasqal to deploy the first quantum computer in the Kingdom.

In a presentation on the results, Aramco noted that oil demand growth is expected to continue in 2024 and beyond, amidst a robust economic outlook, highlighting record global oil demand in H1 2024 and demand forecasts of between 104.6mn bpd and 106.2 mn bpd for the second half of the year.