Saudi Aramco, the world’s largest oil company, has announced its financial results for the second quarter of 2023, ending June 30.
According to the report, the company recorded a net income of $30.083 billion for the quarter, a significant decrease compared to $48.439 billion during the same period last year.
The decline in net income can be attributed to several factors, including fluctuations in global oil prices and ongoing challenges in the energy market. Despite the dip in profits, Aramco’s President & CEO, Amin H. Nasser, emphasized their commitment to capital spending and expansion plans to meet future demand.
Capital Expenditure Reaches $10.463 Billion
During the second quarter of 2023, Saudi Aramco’s capital expenditure reached $10.463 billion, showing a notable increase compared to $9.358 billion spent during the same period in 2022. The company’s large capital spending program aims to boost oil and gas production capacity and expand its downstream business.
Upstream Financial Performance and Growth Plans
Aramco’s upstream sector demonstrated operational agility and disciplined execution plans in Q2 2023, as it focused on increasing crude oil and gas production capacity. The total hydrocarbon production for the quarter reached 13.5 million barrels of oil equivalent per day (mmboed).
In pursuit of further expansion, the company is working on several projects, including:
Marjan and Berri Crude Oil Increments: These projects are expected to add 300 thousand barrels per day (mbpd) and 250 mbpd, respectively, by 2025.
Dammam Development Project: This project is slated to add 25 mbpd and 50 mbpd of crude oil by 2024 and 2027, respectively.
Zuluf Crude Oil Increment: The project aims to process a total of 600 mbpd of crude oil from the Zuluf field by 2026.
Jafurah Gas Plant: In support of increasing gas production capacity, Aramco is progressing with the Jafurah Gas Plant project, part of the Jafurah unconventional gas field, which is expected to commence production in 2025.
Downstream Financial Performance and Petrochemicals Expansion
The downstream sector also saw a growth in capital expenditure during the second quarter of 2023. It increased by 10.4% compared to the same period in 2022, reaching SAR 7,580 ($2,021) from SAR 6,865 ($1,831).
In June, Saudi Aramco and TotalEnergies awarded contracts for the SAR 41.3 billion ($11.0 billion) Amiral complex, a petrochemical facility expansion at the Saudi Aramco Total Refining & Petrochemical Company (SATORP) refinery in Jubail, Saudi Arabia. The new complex aims to house one of the largest mixed-load steam crackers in the region and is expected to have a capacity to produce 1.65 million tons per annum of ethylene and other industrial gases. The facility is anticipated to start commercial operation in 2027.
Aramco’s Commitment to Renewable Energy
The company is also making strides in the renewable energy sector. Saudi Aramco Power (SAPCO), a subsidiary of Aramco, has entered into a consortium for the development of the Al Shuaibah 1 and Al Shuaibah 2 photovoltaic solar projects. The SAR 8.3 billion ($2.2 billion) projects, located in Makkah province, are expected to have a combined capacity of 2.66 GW. This move aligns with Aramco’s intention to invest in 12 GW of solar and wind energy by 2030, supporting the Kingdom’s National Renewable Energy Program.
Despite challenges in the energy market, Saudi Aramco remains dedicated to its growth plans and continued contributions to the global energy landscape.