Saudi Aramco net income falls in third quarter on lower oil prices, volumes

Nov. 9, 2023
Saudi Aramco had net income of $32.6 billion for third-quarter 2023, up from $30.1 billion in this year’s second quarter, primarily driven by market prices and volumes sold of hydrocarbons as well as refined and chemicals products.

Saudi Aramco had net income of $32.6 billion for third-quarter 2023, up from $30.1 billion in this year’s second quarter, primarily driven by market prices and volumes sold of hydrocarbons as well as refined and chemicals products.

Net income is down from the year-ago quarter net income of $42.4 billion, due to ongoing economic uncertainty that resulted in lower prices for hydrocarbons and lower refining and chemicals margins, the company said in an earnings report Nov. 7.

Cash flow from operating activities was $31.4 billion for the quarter compared with $54 billion in the prior-year quarter.

Capital investment guidance for full year 2023 is now $48-52 billion.

Upstream

In the quarter, Aramco delivered total hydrocarbon production of 12.8 MMboe/d, down from 13.5 MMboe/d in this year’s second quarter, and down from 14.4 MMboe/d in third-quarter 2022.

The company also progressed expansion of its maximum sustainable capacity to 13.0 million b/d by 2027 through ongoing engineering, procurement, and construction activities including:

         The Marjan and Berri crude oil increments, which are expected to be onstream by 2025 and add production capacity of 300,000 b/d and 250,000 b/d, respectively (OGJ Online, Mar. 13, 2023).

         The Dammam development project, which is expected to add crude oil production of 25,000 b/d in 2024 and 50,000 b/d in 2027.

         The Zuluf crude oil increment, which is expected to process 600,000 b/d of crude oil from Zuluf field through a central plant by 2026.

During the quarter, Aramco progressed its gas expansion strategy through ongoing projects. The Hawiyah Gas Plant expansion, part of the Haradh gas increment program, was commissioned and brought onstream, increasing the plant’s raw gas processing capacity by 800 MMscfd, which includes about 750 MMscfd of sales gas processing capacity.

Commissioning activities for the gas compression projects at Haradh and Hawiyah fields are in advanced stages of completion, the company said, with eight of the nine plants commissioned and the final plant expected to be fully onstream this year.

The company also signed agreements to acquire a minority stake in MidOcean Energy to progress LNG expansion ambitions.

Downstream

In the first 9 months of the year, the downstream operations utilized about 45% of Aramco’s crude oil production.

In other downstream developments, Aramco signed a cooperation framework agreement with Jiangsu Eastern Shenghong Co. Ltd. (Eastern Shenghong) and a memorandum of understanding (MoU) with Shandong Yulong Petrochemical Co. Ltd. (Shandong Yulong).

The agreement and MoU are expected to facilitate discussions of acquiring 10% strategic equity interests in each of Shenghong Petrochemical Industry Group Co. Ltd. (Shenghong Petrochemical), a wholly-owned subsidiary of Eastern Shenghong, and in Shandong Yulong. Under the potential deals, it is intended that Aramco would have the right to supply both companies with crude oil and possibly other feedstocks.

Shenghong Petrochemical owns and operates a 320,000 b/d integrated refinery and petrochemicals complex and other infrastructure, and Shandong Yulong is currently in the process of completing the construction of a refining and petrochemicals complex designed to process about 400,000 b/d of crude oil.