Saudi state oil company Saudi Aramco continues to reward its shareholders, despite the strong fall in profits last year as a result of the coronavirus crisis. The company said Sunday is sticking to its policy of transferring 75 billion dollars in dividend.
The payment of the dividend is a vital source of income for the Saudi government. Especially now that the budget deficit increased last year as the virus ravaged the energy markets and shut down businesses across the kingdom. The company saw lower demand for oil last year’s profits plummet 44 percent to 49 billion dollars
The world’s largest oil group has made more debts in recent months to keep the dividend level. This is compared to a decreasing free cash flow, the ability of a company to invest in new investments. Free cash flow dried up by 40 percent to 49 billion dollars on an annual basis.
Saudi Aramco expects spending to reach $ 35 billion this year, a decrease of no less than $ 45 billion compared to previous expectations. This indicates that Aramco is cautiously looking ahead to the situation on the oil market, despite the recent increase in oil prices. Since December, about a quarter more has to be paid for a barrel of oil.
Saudi Aramco expects to make more investments this year than in last year. Spending in 2020 stood at 27 billion dollars. The company notes that energy consumption is increasing in several regions as the world economy recovers, including in the important Asian market.
Saudi Aramco is the second most valuable company in the world after Apple, with a market value of about 1.9 trillion dollars. Investors have been a little cautious about the stock lately. This is mainly due to an increase in the number of rocket attacks on the company’s facilities. Most of them are claimed by rebels from Yemen, whose government in Saudi Arabia claims Iran is behind it.
The Saudi state oil and gas group Saudi Aramco will further strengthen its ties with China. According to Amin Nasser, the company wants to work more closely with China to reduce emissions and produce cleaner energy sources.
Aramco wants to work with China on hydrogen, ammonia, artificial fuels and CO2 capture and storage. The company is working with Chinese universities to find ways to reduce Chinese emissions, according to Nasser. Aramco plans to make more investments in China.
China, the world’s second economy, has a goal of becoming completely climate neutral by 2060. Among other things, the country is engaged in electric driving and driving on hydrogen.
Furthermore, Saudi Arabia remained China’s main oil supplier in the first two months of this year, with an average import of 1.86 million barrels per day. “Ensuring the continued safety of Chinese energy demand remains our top priority for the next 50 years and beyond,” Nasser stated in a video message following Aramco’s annual figures.
Saudi Arabia is the world’s largest oil exporter. Although China also has large oil companies, the country is dependent for a large part of its oil needs on imports from abroad.