Saudi Aramco reports 20.6% drop in 2019 profit

Saudi Aramco has recorded a 20.6 per cent decline in its net profit for 2019 due to a plunge in crude oil prices, the country's state-run oil company said in a statement on Sunday.

It was Aramco's first annual results following its record $29.4 billion initial public offering and listing on the Saudi Tadawul or stock market last December, reports Efe news.

The company's net income fell to $88.2 billion in 2019, from $111.1 in 2018.

"The decrease was primarily due to lower crude oil prices and production volumes, coupled with declining refining and chemical margins, and a $1.6 billion impairment associated with Sadara Chemical Company (an Aramco subsidiary)," it said.

The company called the 2019 results "strong" despite a lower price environment.

Aramco further said that it restored production levels within 11 days after a drone attack on two of its facilities in September that resulted in a Saudi oil production cut of 50 per cent.

The firm said it continued to be "one of the world's largest producers of crude oil and condensate with an average total hydrocarbon production of 13.2 million barrels per day of oil equivalent".

The company's president Amin Nasser saw 2019 as an "exceptional year for Saudi Aramco".

"Our unique scale, low costs and resilience came together to deliver both growth and world-leading returns, while also maintaining our position as one of the world's most reliable energy companies," he added.

The results were announced amid an intense oil price war between Riyadh and Moscow after they failed to agree on production cuts at an OPEC+ meeting earlier this month, with the novel coronavirus officially being declared as a pandemic.

Nasser said that "the recent COVID-19 outbreak and its rapid spread illustrate the importance of agility and adaptability in an ever-changing global landscape".

"This is central to Saudi Aramco's strategy and we will ensure that we maintain the strength of our operations and our finances," he added.

Aramco stated last week it would boost its maximum oil production capacity from 12 million to 13 million barrels per day (bpd), while Russia said it could boost its production from 200,000 to 300,000 bpd in the short term, up to a total increase of 500,000 bpd in the long term.