industry

Oil producer Saudi Aramco makes $47bn half-year profit


The state-backed oil producer Saudi Aramco made profits of $46.9bn (£39bn) in the first half of the year as lower oil prices made a small dent in the earnings of the company that makes the world’s largest profits.

Profits fell by 12% compared with the first six months of 2018, when Aramco, officially called the Saudi Arabian Oil Company, made profits of £53.2bn. Aramco revenues remained roughly flat year on year at $146.9bn.

The company produced 13.2m barrels of oil equivalent per day during the period, far above production from rivals such as ExxonMobil, which made 3.9m per day.

The previously secretive Aramco lifted the lid on its financial performance for the first time at the start of April as it prepared to raise money on international capital markets. Investors placed orders worth $100bn for $12bn of bonds, the highest level of demand in history.

The figures offered an unprecedented glimpse into the company long thought to be the largest in the world. They revealed that Aramco made $111.1bn of profits in 2018, on revenues of £355.9bn – well above those of other oil supermajors such as Royal Dutch Shell or ExxonMobil, and Apple, the world’s most profitable listed company. Apple made net income of $50.6bn in 2018, while Shell made £23.4bn.

Aramco will broadcast a briefing on its results for the first time ever on Monday afternoon, at 2pm BST, as it increasingly looks to engage with international investors. The Saudi crown prince, Mohammed bin Salman (or MbS), has made diversifying Aramco away from a dependence on oil production a key part of his plan for the next decade in the nation’s economy.

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As part of those plans, it was revealed on Monday that Aramco is taking a 20% stake in the oil-to-chemicals business of India’s Reliance Industries at an enterprise value of $75bn, according to Mukesh Ambani, the Reliance chairman and Asia’s richest man.

The Saudi state is also planning to list shares in Aramco within two years in a float that could value the company at as much as $2tn. The float was pulled last year amid concerns that it may not achieve the hoped-for valuation.

Investors appear to have put aside concerns over doing business with Saudi Arabia when subscribing for the record-breaking fundraising in April, which came after the international outcry over the murder of Jamal Khashoggi.



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