Saudi Aramco recently asked banks to extend a $10 billion loan raised in May last year for one year, indicating that despite a rebound in crude oil prices, Saudi Aramco’s debt pressure does not appear to have eased.
The COVID-19 epidemic has hurt Saudi Arabia’s “cornucopia” a bit.
Saudi Aramco (Saudi Aramco, hereinafter referred to as “Saudi Aramco”) announced its 2020 financial report on March 21, showing that due to the epidemic that has severely hit the demand in the global energy market, the company The company’s net profit in 2020 dropped significantly by about 45% compared with the previous year.
As the world’s largest oil company, Saudi Aramco has contributed a large amount of financial resources to the Saudi government, and now its net profit has been almost halved.
As we all know, Saudi Aramco, as the only national oil company in Saudi Arabia, is the main source of revenue for the Saudi government. The reduction in oil revenue will weaken Saudi Arabia’s ability to rely on public investment to promote economic transformation.
Net profit was almost cut in half
According to Saudi Aramco’s financial report, due to falling oil prices, declining sales and Affected by factors such as lower profit margins in refining and chemical products, the company’s net profit in 2020 was US$49 billion, down from US$88.2 billion in 2019.
Saudi Aramco Chief Executive Officer (CEO) Amin Nasser said that 2020 was the most challenging year in the company’s contemporary history, but the company still showed strength financial and operational flexibility, and remains one of the world’s most profitable listed companies.
On March 7, Saudi Aramco raised the price of most crude oil exported to Asia and the United States in April, showing improving demand and tight market fundamentals. factors have boosted oil prices recently.
Nasser also revealed that as the macro environment improves, demand in Asia has picked up, and there are also positive signs in other regions. Nasser said on the earnings call that demand in China is very close to pre-epidemic levels, while demand in Asia, especially East Asia, has also seen a strong rebound.
On the same day, Nasser also delivered a video speech at the China Development Forum, saying that new energy and traditional energy will run in parallel for a period of time. In the Chinese market, Saudi Aramco’s goal is to be based on the long term. , “contribute to ensuring China’s energy security for more than 50 years, not just the next five years.”
According to data released by China Customs on March 20 In the first two months of this year, Saudi Arabia continued to maintain its position as China’s largest oil supplier, with oil production increasing by 2.1% to 1.86 million barrels per day. In 2020, Saudi Arabia was also China’s largest oil supplier.
Nasser also said that due to the huge impact of the epidemic on the global economy, Saudi Aramco pays more attention to capital and operational efficiency. The company’s financial position remains solid and it met its full-year target of distributing $75 billion in dividends to shareholders, which was significantly higher than its net profit.
In addition, Saudi Aramco recently asked banks to extend a $10 billion loan raised in May last year for one year, two people familiar with the matter revealed in early March, indicating that despite the rebound in crude oil prices , Saudi Aramco’s debt pressure does not seem to have eased.
Is the Saudi economy okay?
Just one day before Saudi Aramco released its financial report, Saudi Arabia’s oil refinery was attacked again.
Saudi Arabia’s Ministry of Energy confirmed on the 19th that an oil refinery in Riyadh, the capital, was attacked by multiple drones and caught fire that day. The fire has been brought under control, with no casualties and fuel supply Not affected.
The Houthi armed forces of the Yemeni anti-government organization claimed earlier that day that they controlled six drones to attack a Saudi Aramco oil facility in Riyadh in response to the Saudi-led multinational coalition’s attack on Saudi Aramco. Military operations in Yemen.
This is the second major attack on Saudi oil facilities this month. Two oil facilities in eastern Saudi Arabia were attacked by Houthi armed drones and ballistic missiles on the 7th, but there were no casualties or property damage. The attacks included a Saudi Aramco oil storage facility in the eastern port city of Ras Tanura.
In this regard, Nasser said that the company has developed contingency and emergency response plans to deal with any attacks.
In terms of Saudi macroeconomics, Saudi Crown Prince Mohammed bin Salman has tried to diversify the Saudi economy in recent years, but the Saudi economy still relies heavily on oil exports. Saudi Aramco’s revenue and expenditure performance is usually regarded by the outside world as a barometer of economic development in Saudi Arabia and even the Middle East and Gulf regions.
In an interview with reporters, Zou Zhiqiang said that in recent years, Saudi Arabia has promoted economic transformation, and a series of planned transformation projects require large-scale capital investment. In addition to attracting foreign investment, , mainly relying on its own funds, that is, mainly relying on oil revenue, the significant reduction in Saudi Aramco’s net profit in 2020 will naturally affect its economic diversification projects and transformation process.
At the same time, he also pointed out to reporters that Saudi Aramco’s dividend payment to the Saudi government remains high, reflecting the current great economic growth and financial pressure in Saudi Arabia, which requires many basic expenditures both internally and externally. Supported by oil revenue, many large-scale investment projects may not be included in the urgent agenda. Faced with investment cuts, they will inevitably be affected even more.
Saudi Cabinet MeetingThe government approved the government’s 2021 fiscal budget in December 2020. The budget deficit reached approximately 141 billion riyals (approximately 244.7 billion yuan). This is also the eighth consecutive year that the Saudi government budget has experienced a deficit.
The market currently generally expects that global oil demand will rebound significantly in 2021, but will still be lower than pre-epidemic levels. It is expected that it will not return to pre-epidemic levels until 2022. </p
