Most of oil companies around the world have been severely affected by the current pandemic, the many lockdowns have in fact caused the demand and price of oil to collapse.
On March 21, the Saudi Arabian oil giant Aramco published its results for the year 2020 and according to the report, the company demonstrated “exceptional resilience despite the macroeconomic impact of COVID-19 and delivering on its intended dividend payments to shareholders”.
The oil company reported a net income of 49 billion dollars for 2020 (compared to more than 88 billion dollars in 2019) which together with its cash flow of about 49 billion dollars led it to an increase in debt for the balance of the flat tax. Revenues in 2020 fell by almost 45% compared to the previous year.
“In one of the most challenging years in recent history, Aramco demonstrated its unique value proposition through its considerable financial and operational agility”, said Amin H. Nasser, President and CEO of Aramco. “Our exceptional performance during such testing times owed much to the unwavering spirit and resilience of our employees, who set operational records and continued to meet the world’s energy needs both safely and reliably”.
Aramco’s revenues have been hit by the reduction in volumes sold and the drop in crude oil prices, but despite a really tough 2020, the company said it will pay a dividend of 75 billion dollars and that its capital expenditure planned for 2021 will reach 35 billion dollars. “As the enormous impact of COVID-19 was felt throughout the global economy – commented Amin H. Nasser – we intensified our strong emphasis on capital and operational efficiencies. As a result, our financial position remained robust and we declared a dividend of $75 billion for 2020”.
98% of Aramco company is controlled by the Saudi Arabian government and although it has been hit by the crisis, its ROACE of 13.2% continues to be the highest in the industry.
“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. We remain confident that we will emerge on the other side of this pandemic in a position of strength”, said Amin H. Nasser.