Aramco Reports Q1 Profits Dip with Increased Capex; Eyes Growth in Gas Sector

Saudi Aramco navigates Q1 challenges with strategic capital expenditure surge and intensified focus on expanding gas production capabilities.

Saudi Aramco disclosed a slight decline in profits for the first quarter of 2024, recording healthy earnings of US$27.3 billion compared to US$31.9 billion in Q1 2023. The dip in net income was attributed to reduced crude oil sales and weakened margins in refining and chemicals, despite higher oil prices during the period. Production constraints due to OPEC output cuts also played a role in the earnings decrease.

Capital expenditure surged to US$10.8 billion in Q1 2024 from US$8.7 billion in the previous year, with a primary focus on upstream liquids and gas, downstream liquids to chemicals, and emerging energy sectors such as renewables, lower-carbon fuels, blue ammonia, and hydrogen, as outlined in the company’s quarterly report. Despite directives to maintain maximum sustainable crude (MSC) production at 12 million barrels per day (bpd), down from the earlier target of 13 million bpd, Aramco affirmed its commitment to ongoing projects such as the Dammam development and crude oil increments at Marjan, Berri, and Zuluf fields. These endeavors provide operational flexibility to adapt to market fluctuations.

With a strategic imperative to bolster gas production by over 60% by 2030, subject to domestic demand, Aramco advanced initiatives including development activities at the Jafurah Gas Plant and expansion of the Fadhili Gas Plant. Additionally, the company augmented its gas reserves through investments in the Jafurah unconventional field. Aramco’s downstream endeavors included progress on the SABIC Fujian Petrochemical Complex in China and acquisition of Esmax, a prominent downstream fuels and lubricants retailer in Chile.

Venture capital funding was earmarked for substantial increase to US$7.5 billion, with a focus on disruptive technologies outside the energy sector and sustainability and digital domains.

Amidst these developments, Aramco announced a Q1 2024 base dividend of US$20.3 billion and anticipates a total dividend payout of US$124.3 billion in 2024. Aramco President and CEO, Amin H. Nasser, underscored the company’s resilience and strategic alignment with long-term objectives, emphasizing the commitment to contribute to an energy transition while ensuring affordable, reliable, and flexible energy supplies.