A white-collar worker at an oil processing facility of Saudi Aramco, a Saudi Arabian state-owned oil and gas company, at the Abqaiq oil field.
Stanislav Krasilnikov | TASS | Getty Representatives
Oil giant Saudi Aramco reported a 44% slump in full-year 2020 results, but maintained its $75 billion dollar dividend payout, with CEO Amin Nasser explaining the last twelve months as one of the most “challenging years” in recent history.
Saudi Aramco, Saudi Arabia’s behemoth express oil firm, reported net income of $49 billion in 2020, down from $88.19 billion in 2019. The result was degree below analysts expectations of $48.1 billion but still represents the highest of any public company globally.
“In one of the most testing years in recent history, Aramco demonstrated its unique value proposition through its considerable financial and operational agility,” Saudi Aramco Chief Administrator Amin Nasser said in company statement Sunday.
Aramco said revenues were impacted by lower gross oil prices and volumes sold, and weakened refining and chemicals margins.
The firm also said it expects to cut capital rate in the year ahead, and lowered its guidance for spending to around $35 billion from a range of $40 billion to $45 billion in the past.
Free cash flow slumped almost 40% to $49 billion, well below the level of its hotly foretold dividend. Aramco also declared a payout of $75 billion for 2020, despite concern that it would make off on additional debt to maintain it.
“Looking ahead, our long-term strategy to optimize our oil and gas portfolio is on track and, as the macro environment renovates, we are seeing a pick-up in demand in Asia and also positive signs elsewhere,” he added.
Shares in the top western oil and gas companies embracing Royal Dutch Shell and BP dropped to multi-year lows in 2020, as the coronavirus pandemic wrecked havoc across the worldwide economy and sparked a historic collapse in the price of oil. Exxon Mobil, the largest U.S. energy company, posted its first annual liability liabilities.
Escalating attacks on oil facilities
Aramco’s facilities have been the target of several attacks by Yemen’s Houthi heretics — attacks that have escalated this year, with Saudi Arabia and Iran, the latter of whom outlies the rebels, on opposing sides of Yemen’s bloody civil war.
Houthi missile volleys in parts of Saudi Arabia that deal Aramco facilities earlier in March briefly sent the price of oil above $70 a barrel to its highest level in uncountable than a year. Most recently, the rebels claimed responsibility for drone strikes on an Aramco facility in the capital Riyadh on Friday, reasoning a fire that the Saudi energy ministry said was quickly brought under control with no casualties.
Asked how the establishment aimed to reassure investors and the global community that its infrastructure was well-protected and prepared to prevent serious disruption to its performances, CEO Amin Nasser stressed that there was “no impact on business” from the attacks.
“I think the most important item is the readiness of our people,” Nasser told CNBC during a press conference following the earnings release. “There is everlastingly something you learn with each attack, and you go and you enhance your emergency response … and you make sure you have all what is needed to give someone back these facilities if they are attacked.”
“We have learned a lot, we have been able to demonstrate with a reliability of 99.9% that we are qualified, under any scenario, to put the facility back onstream and ensure the safety and security of our people and at the same time ensure that the affords to our customer is met,” Nasser added.
“The attack on Riyadh is a good demonstration, within hours of putting out the fires and finishing the examination, we started putting the facility (back) on,” he said. “Today the Riyadh refinery started to come onstream. So it is a demonstration of the proficiency and the contingency plan and the emergency response of first responders.”
Nasser also expressed his optimism for the oil demand outlook in 2021.
“We father seen improvement on prices, with pickup on demand, much better recovery. China is also very terminate to pre-pandemic levels,” the CEO said.
“With more deployment of the vaccines we will see more demand pickup so we are very cheerful about 2021 in terms of growth in demand, especially in the second half, and we can see the prices so far responding to what we are seeing in the buy, we are looking forward to a much better year in 2021.”
Several oil analysts have upped their price forecasts for the 2021 on vaccine and outcry confidence, with Goldman Sachs predicting a rise to $80 per barrel by the third quarter of this year — something unimaginable when WTI outlays went negative for the first time in history roughly one year ago.