Tag: Saudi Aramco

Saudi Aramco cuts June propane price by $105/mt to $450/mt: Reports

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Saudi Aramco has cut June propane price by $105/mt month on month to $450/mt. This is on the back of ample supplies in Middle East and US and low petrochemicals demand from China, according to reports. This would be implemented in India from July. Hence, July propane would become cheaper by 17-18 percent versus Gujarat gas.

Gujarat Gas has cut price by 5 percent effective today to Rs38.43/standard cubic metre (scm). This is the fifth price cut by Gujarat Gas in 2023. At the beginning of the year, the industrial gas rates were Rs 47.93/scm. The fifth price cut comes against the backdrop of lower spot Liquified Natural Gas (LNG) prices.

Analysts say this may have a negative effect on Gas Authority of India Ltd (GAIL). Against this, Oil Marketing Companies (OMCs) will earn better Liquified Petroleum Gas (LPG) marketing margins, though may cut prices also.

The bearish trend in the Saudi propane contract price (CP) over the past several months has been driven by ample supplies out of the Middle East and U.S. and weak petrochemical demand. Chinese propane dehydrogenation (PDH) demand remains poor as low propylene prices in the region continue to put downward pressure on margins.  Fortunately for U.S. propane exporters, Mont Belvieu propane prices have also been weak keeping the U.S.-Asia ARB open and exports flowing at record-levels.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Saudi Aramco looks to boost dividend, triggering stock surge

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Aramco will introduce an additional dividend, potentially boosting payouts for Saudi Arabia’s government by billions of dollars just as weaker oil prices edge the state’s budget into a deficit.

The stock surged as much as 7.2 percent in early trading, before trimming gains to 3.7 percent, still taking it to the highest level since September.

The new dividend will be “in the amount of 50 percent to 70 percent” of Saudi Aramco’s annual free cash flow, net of the base payout and other amounts including external investments, the world’s largest energy company said on Tuesday, shortly before it released earnings. The amount will be “determined with the annual results.”

The state-controlled company made a net profit of $31.9 billion for the first quarter, slightly below analysts’ expectations and down 19 percent from a year earlier. Free cashflow was $30.9 billion and the dividend was maintained at $19.5 billion.

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The Saudi Arabian government owns 90 percent of Aramco’s stock directly, with a further 8 percent held by the sovereign wealth fund. The shares have climbed 16 percent this year in Riyadh, outperforming those of Western Big Oil rivals such as Shell Plc and Exxon Mobil Corp.

Aramco’s free cashflow soared, along with oil prices, to almost $149 billion last year, easily covering the annual dividend of $75.8 billion, which is already the largest for any listed company and a crucial source of funding for the Saudi government.

The kingdom reported a $770 million fiscal deficit for the first quarter as spending on public sector salaries and massive projects to diversify the economy from energy increased. Growth slowed to 3.9 percent year-on-year, compared with 10 percent in the first quarter of 2022.

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Oil prices have dipped sharply since the middle of last year after the global economy weakened and central banks raised interest rates to combat inflation. Brent averaged $82 a barrel between January and March, down from almost $100 for 2022. The benchmark has since fallen further to around $77.

Aramco, based in Dhahran in eastern Saudi Arabia, is targeting capital expenditure of $45 billion to $55 billion for 2023.

The country’s de facto ruler, Crown Prince Mohammed Bin Salman, has said the government may sell more shares in Aramco through a secondary offering.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Saudi prince gives 4% Aramco stake to public investment firm

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Saudi Arabia’s crown prince announced Sunday the transfer of a 4 percent stake of the oil giant Saudi Aramco to a subsidiary of the kingdom’s sovereign wealth fund, further boosting its coffers as the kingdom tries to expand its economy beyond oil.

Crown Prince Mohammed bin Salman’s decision, announced by the state-run Saudi Press Agency, sends the stake to the Saudi Arabian Investment Co., known as Sanabil Investments. Sanabil is under the sovereign wealth fund known as the Public Investment Fund.

“The transfer will also solidify PIF’s strong financial position and credit rating,” the statement about the deal said. It gave no possible investment targets for either Sanabil or the PIF.

Saudi Aramco, formally known as the Saudi Arabian Oil Co., acknowledged the shares going to Sanabil. It said the Saudi government remains the oil firm’s biggest shareholder, with over 90 percent of its stock.

“This is a private transfer between the state and Sanabil, and the company is not a party to the transfer and did not enter into any agreements or pay or receive any proceeds from the transfer,” Aramco said in a stock market filing.

In February 2022, another 4 percent of Aramco had been transferred to the PIF. Just 1.73 percent of the company, a narrow sliver, is traded on Saudi Arabia’s Tadawul stock market since the company’s 2019 initial public offering.

Aramco has a market value of $1.94 trillion, making it the world’s third most-valuable firm, behind just Apple and Microsoft respectively. That makes the 4% worth in theory some $77.6 billion.

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Aramco stock traded slightly up on the Tadawul to $8.82 a share Sunday.

Aramco reported earning a $161 billion profit last year, claiming the highest-ever recorded by a publicly listed company. That came off the back of energy prices rising after Russia launched its war on Ukraine in February 2022, with sanctions limiting the sale of Moscow’s oil and natural gas in Western markets. Benchmark Brent crude now trades above $86 a barrel, further fueling global inflation worries.

Meanwhile, activists criticized the profits amid global concerns about the burning of fossil fuels accelerating climate change.

Saudi Arabia’s vast oil resources, located close to the surface of its desert expanse, make it one of the world’s least expensive places to produce crude. The crown prince hopes to use the oil wealth to pivot the kingdom off oil sales, like with his planned $500 billion futuristic desert city called Neom and other projects.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CCI okays Aramco arm Gateway Velocity’s acquisition of VGP Holdings

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Competition Commission of India (CCI) on Wednesday, February 22, approved the proposed acquisition of 100 percent equity of VGP Holdings LLC by Gateway Velocity Holding Corp.

The proposed combination relates to the acquisition of 100 percent of the issued and outstanding share capital and sole control of VGP Holdings LLC.

VGP Holdings LLC, a subsidiary of US motor oil and lubricants group Valvoline Inc, sells Valvoline and other branded and private label engine and automotive preventive maintenance products.

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Gateway Velocity Holding Corp is a wholly-owned subsidiary of Aramco Overseas Company BV, which is a wholly-owned subsidiary of Saudi Arabian Oil Company (Saudi Aramco).

Saudi Aramco is primarily engaged in prospecting, exploring, drilling, and extracting hydrocarbon substances and processing, manufacturing, refining and marketing these substances.

In India, it is primarily engaged in the marketing and selling of hydrocarbons and derivatives (including polyethylene, polypropylene, resins, lubricants and base oils).

In August 2022, the Saudi Arabian Oil Company (Saudi Aramco) said it has signed an equity purchase agreement to acquire Valvoline’s global products business (VGP) for $2.65 billion.

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In a tweet on Wednesday (February 22), CCI said it approved, the “acquisition of 100 percent of the issued and outstanding share capital and sole control of VGP Holdings LLC, a subsidiary of Valvoline Inc by Gateway Velocity Holding Corp, a wholly owned subsidiary of Saudi Arabian Oil Company (Saudi Aramco).”

Gateway Velocity Holding Corp is engaged in the exploration, drilling and extraction of hydrocarbon substances while Saudi Aramco (through its affiliates) is primarily engaged in the marketing and selling of hydrocarbons and derivatives.

Deals beyond a certain threshold have to be approved by CCI, which keeps a tab on unfair business practices as well as promotes fair competition in the marketplace.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Saudi Aramco reports $42.4 billion profit in the third quarter

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Saudi Aramco on Tuesday reported a $42.4 billion profit in the third quarter of this year. The oil giant’s profits were supported by higher global energy prices.

On Tuesday, global crude oil benchmarks rose as the weakness in dollar offsets demand concerns triggered by COVID curbs in China. Brent oil futures were trading 1.4 percent higher at Rs 94.1 at the last count. WTI crude oil futures were last trading 1.4 percent higher at Rs 87.7.

The profits made by the oil firm in the third quarter will help fund Saudi Arabia’s Crown Prince Mohammed bin Salman’s plans for a futuristic city on the Red Sea coast.

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“While global crude oil prices during this period were affected by continued economic uncertainty, our long-term view is that oil demand will continue to grow for the rest of the decade given the world’s need for more affordable and reliable energy,” Aramco CEO Amin H. Nasser said in a statement.

Earlier, Aramco reported a 90 percent jump in profits in the second quarter compared to the same time last year, helping its half-year earnings reach nearly $88 billion. The oil company’s net profits for the first half of the year were helped by strong second-quarter earnings that hit $48.4 billion a figure higher than the first full half year of 2021 when profits reached just $47 billion.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Oil prices ease as Aramco says ready to boost crude output

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Oil prices dropped for a second session on Monday after the head of the world’s top exporter, Saudi Aramco, said it is ready to ramp up output while production at several offshore U.S. Gulf of Mexico platforms is resuming after a brief outage last week.

Brent crude futures fell 27 cents, or 0.3 percent, to $97.88 a barrel by 0034 GMT after settling 1.5 percent lower on Friday. U.S. West Texas Intermediate crude was at $91.87 a barrel, down 22 cents, or 0.2 percent, following a 2.4 percent drop in the previous session.

Saudi Aramco stands ready to raise crude oil output to its maximum capacity of 12 million barrels per day (bpd) if requested to do so by the Saudi Arabian government, Chief Executive Amin Nasser told reporters on Sunday.

“We are confident of our ability to ramp up to 12 million bpd any time there is a need or a call from the government or from the ministry of energy to increase our production,” Nasser said. He added that China’s easing of COVID-19 restrictions and a pickup in the aviation industry could add to demand.

Investors are looking ahead to China economic data later on Monday for demand cues at the world’s top crude oil importer.

Oil prices rebounded more than 3 percent last week after a damaged oil pipeline component disrupted output at several offshore Gulf of Mexico platforms.

Producers had moved to reactivate some of the halted production after repairs were completed late Friday, a Louisiana official said.

Energy services firm Baker Hughes Co reported on Friday that U.S. oil rig count rose by 3 to 601 last week. The rig count, an early indicator of future output, has been slow to grow with oil production only seen recovering from pandemic-related cuts next year.

Global oil markets remained supported by tight supplies in the run-up to EU sanctions on Russian crude oil and refined product supplies this winter.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Saudi Aramco profit hits another record in first half due to high oil prices

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Saudi energy company Aramco said that its profits jumped 90 percent in the second quarter compared to the same time last year, helping its half-year earnings reach nearly $88 billion. The company said on Sunday that the increase is a boon for the kingdom and the crown prince’s spending power as people around the world pay higher oil prices at the pump.

Aramco’s net profits for the first half of the year were helped by strong second-quarter earnings that hit $48.4 billion a figure higher than the first full half year of 2021 when profits reached just $47 billion.

The oil and gas company, which is nearly entirely state-owned by Saudi Arabia, said this sets a new quarterly earnings record for Aramco since it first floated around 5 percent of the company on the Saudi stock market in late 2019.

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Aramco said profits were helped by higher crude oil prices and volumes sold, as well as higher refining margins. The vast oil reserves belonging to Saudi Arabia are among the cheapest to pump and produce in the world.

Aramco’s financial health is crucial to Saudi Arabia’s stability. Despite years of efforts to diversify the economy, the kingdom continues to rely heavily on oil and gas sales for revenue in order to pay public sector wages, subsidies, generous benefits to Saudi citizens, keep up its defence spending and carry out Crown Prince Mohammed bin Salman’s Vision 2030 infrastructure goals.

Brent crude has been trading at around $100 a barrel, even as OPEC, led by Saudi Arabia, and non-OPEC producers, led by Russia, have incrementally increased production levels that had been cut during the height of the pandemic.

Aramco President CEO Amin Nasser said the latest financial results reflect increasing demand for oil, even as countries around the world, including Saudi Arabia, pledge to cut their carbon emissions to avert catastrophic global warming levels driven by the burning of fossil fuels.

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The world is calling out for affordable, reliable energy and we are answering that call,” he said, before adding that Aramco expects oil demand to continue to grow for the rest of the decade, despite downward economic pressures and inflation.

At a time when the world is worrying about energy security, you are investing in the future of our business. Our customers know that whatever happens, Aramco will always deliver, Nasser said in a short video released with the financial results.

Saudi Arabia is currently producing around 10 million barrels per day, with much of that exported to Asia and its largest customer, China. The crown prince said last month that the kingdom’s maximum production capacity is 13 million barrels per day, and Aramco said it is working to expand its scope to one day reach that ceiling.

The company will pay a dividend of $18.8 billion for the second quarter to shareholders, as it has promised to do since its IPO. The higher profits bode well for the Saudi government, which is the main shareholder of Aramco.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Apple vs Saudi Aramco: Why iPhone maker is no longer the most valuable company

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Oil giant Saudi Aramco has dethroned Apple as the world’s most valuable company stoked by surging oil prices and a fall in demand for tech stocks.

The Saudi Arabian national petroleum and natural gas company was valued at $2.43 trillion on Wednesday at the end of market trading, CNBC reported quoting FactSet. At the same time, Apple, whose shares slumped over 5 percent during trading on Wednesday, was valued at $2.37 trillion.

Apple had surpassed Saudi Aramco to gain the top spot as the world’s most valuable publicly traded company in 2020.

Why Apple stocks are falling?

Saudi Aramco pipping Apple as the most valuable firm in the world emphasises the major forces currently at play across the global economy.

Soaring oil prices have stoked inflation, forcing the US Federal Reserve to hike interest rates at the fastest pace in decades. With the rise in interest rates, investors will discount the value of future revenue flows from tech companies, thereby pushing their stock prices down.

“You can’t compare Apple to Saudi Aramco in terms of their businesses or fundamentals, but the outlook for the commodity space has improved. They’re the beneficiaries of inflation and tight supply,” Bloomberg quoted James Meyer, chief investment officer at Tower Bridge Advisors, as saying.

Investors have already been selling equities in several industries, including tech stocks amid fears of a deteriorating economic environment. Since its peak at $182.94 on January 4, Apple shares have fallen nearly 20 percent, the CNBC report said.

On the other hand, Aramco stock has moved up over 27 percent since the beginning of 2022.

ALSO READ: Saudi Arabia gives 4% of Aramco to investment fund

Markets are witnessing panic selling in tech and other sectors, Meyer said. Investors are pumping in the money coming out of these stocks into energy, which has a favourable outlook on the back of rising commodity prices, he said. “Companies like Aramco are benefitting significantly from this environment,” Meyer said.

Apple’s future hurdles

Apple’s share prices have slumped despite the tech giant posting better-than-expected profits in the first three months of this year, buoyed by strong consumer demand.

Apple’s revenue for the three months was $97.3 billion, up 9 percent from the year-ago period. It posted quarterly earnings per diluted share of $1.52 in its second quarter ended March 26, 2022. Its quarterly profit stood at $25 billion.

However, Apple warned that the recent restrictions and lockdowns in China to check the spread of the Covid-19 pandemic and the ongoing supply chain crisis could dent its June quarter results by $4-$8 billion.

“Supply constraints caused by Covid-related disruptions and industry-wide silicon shortages are impacting our ability to meet customer demand for our products,” AFP quoted Apple’s chief financial officer Luca Maestri as saying.

In March, Saudi Aramco, which is assumed to be the largest oil producing company in the world, posted a 124 percent surge in net profit for last year. Aramco’s net income stood at $110.0 billion in 2021 against $49.0 billion in 2020, the company said.

What lies ahead?

Tech shares could continue to fall amid investor concerns over company costs, rising interest rates and supply chain constraints. At the same time, inflation could result in a drop in consumption, reducing demand for oil, the AFP report said.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Some Indian refiners set to cut Saudi oil in May, snap up Russian barrels

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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At least two Indian refiners plan to buy less Saudi oil than usual in May, after the kingdom raised the official selling price (OSP) to record highs for Asia, two sources said on Wednesday, as India increases purchases of cheap Russian crude. India, the world’s third biggest oil importer and consumer, has been hit hard by rising crude values, with pump prices in some states touching record highs.

State oil producer Saudi Aramco, the world’s top oil exporter, has raised crude prices for all regions, with those to Asia hitting all-time highs. The Middle East accounts for the bulk of India’s oil imports, with Iraq and Saudi Arabia the top two suppliers to Asia’s third largest economy. The sources at the two Indian refiners declined to be named, citing confidentiality.

They did not disclose the volumes refiners would buy, and said the reductions in May would be marginal because they have to lift the amount they have committed to under annual contracts. To mitigate the rising cost of oil imports, India has turned to Russian barrels that are available at a deep discount to the dated Brent benchmark, citing “national interests”.

Also read: FM exclusive: India buying oil from Russia, says Nirmala Sitharaman; adds prioritizing India’s energy security

Some companies and countries have shunned Russian crude after the country began its invasion of Ukraine on February 24. Moscow refers to the conflict as a “special military operation”.

Indian refiners have bought at least 16 million barrels of cheaper Russian oil for May loading on a delivered basis, similar to purchases for the whole of 2021, according to Reuters calculations. The companies have mostly bought Russian Urals, a grade similar in quality to medium sour crude produced in the Middle East and West Africa, mainly Angola.

Ehsan Ul Haq, an analyst from Refinitiv, said rising purchases of Russian crude meant India would likely buy less from Middle Eastern suppliers, including spot purchases of grades such as Iraq’s Basra oil. In turn, more Gulf crude, as well as some West African blends could end up in Europe, one of the Indian refiner sources said.

“Apart from altering trade flows, shifts in buying patters will likely raise freight costs because there will be long-haul journeys,” Haq said.

Although Russian imports were meeting only a small fraction of India’s overall needs, he said they were significant for Russia as it loses market share in traditional European markets.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow