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Saudi Aramco to cut capital expenditure, reports 44.4% drop in profit for 2020

The company lowered its guidance for spending to around $35 billion from a range of $40 billion to $45 billion previously, according to a disclosure to the Tadawul bourse.

By: Reuters |
March 21, 2021 11:55:51 am
A Saudi Aramco logo sits on display during the Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC) in Abu Dhabi, United Arab Emirates, on Tuesday, Nov. 13, 2018. OPECs secretary-general, energy ministers from Saudi Arabia to Russia, CEOs at oil majors from Total SA, BP Plc and Eni SpA, and officials from Middle Eastern energy giants such as Abu Dhabis Adnoc have gathered to sign deals and discuss oil, gas, refining and petrochemical issues.

Saudi Arabian state oil giant Aramco said on Sunday it expects to cut capital expenditure after it reported a 44.4% slump in 2020 net profit, hit by lower crude oil prices and sales as the coronavirus pandemic depressed demand.

The company lowered its guidance for spending to around $35 billion from a range of $40 billion to $45 billion previously, according to a disclosure to the Tadawul bourse.

Net profit fell to 183.76 billion riyals ($49.00 billion) for the year that ended December 31, from 330.69 billion riyals a year earlier.

Analysts had expected a net profit of 186.1 billion riyals in 2020, according to the mean estimate of analysts in Refinitiv’s Eikon.

Shares in the top western oil and gas companies including Royal Dutch Shell and BP dropped to multi-year lows in 2020. Exxon Mobil, the largest U.S. energy company, posted its first annual loss.

Aramco also declared a dividend of $75 billion for 2020 and signalled it was seeing pickup in oil demand.

“Looking ahead, our long-term strategy to optimize our oil and gas portfolio is on track and, as the macro environment improves, we are seeing a pick-up in demand in Asia and also positive signs elsewhere,” Saudi Aramco Chief Executive Amin Nasser said in the statement.

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