Saudi Aramco soars to $2 trillion on sky-high oil prices | Oil and Gas News

[ad_1]

Its market capitalisation value puts Aramco just behind Microsoft and Apple as the world’s most valuable companies.

Saudi Arabia’s oil company Aramco reached a $2 trillion valuation as it hit near-record levels Wednesday during trading hours.

Its market capitalisation value put Aramco just behind Microsoft and Apple as the world’s most valuable companies. Aramco reached the milestone as crude oil prices climb to more than $82 a barrel, the highest in seven years.

Demand for energy is picking up, despite the continuing coronavirus pandemic’s continued toll on travel and other key petrol-guzzling sectors.

Aramco is mostly owned by the government of Saudi Arabia, with just less than 2 percent of the company publicly listed on the Saudi Tadawul stock exchange. Aramco was trading at about 37.6 riyals a share, or a few cents more than $10 a share, by midday Wednesday before dipping to 37.2 riyals a share, or about $9.92 a share. It remains to be seen whether it can hold this rally until trading closes.

Saudi Crown Prince Mohammed bin Salman was the architect behind the effort to publicly list a sliver of Aramco in late 2019, touting it as a way to raise capital for the kingdom’s sovereign wealth fund to then develop new cities and mega-projects across the country that create needed private-sector jobs for young Saudis. The crown prince has long sought the mammoth $2 trillion valuation for Aramco.

Despite fluctuations in Aramco’s yearly earnings, the company has stuck to its promise to pay an annual dividend of $75bn until 2024 to shareholders, the biggest of which is the government.

Aramco produces the kingdom’s vast oil and gas products and receives directives on supply production each month from the Energy Ministry of Saudi Arabia, OPEC’s linchpin nation.

The oil carter and other allied major oil producers this week are maintaining a gradual approach to restoring production levels that had been slashed during the pandemic, agreeing to add only 400,000 barrels per day (bpd) in November.

Demand for oil is forecast to hit 99 million bpd by the end of the year, and a little more than 100 million bpd next year.

Aramco raked in a net income of approximately $47bn in the first half of 2021, double what it earned during the same period last year when the coronavirus grounded travel and pummeled global demand for oil. This put Aramco back squarely where it was before the pandemic struck and sunk earnings.



[ad_2]

Leave A Reply

Your email address will not be published.