Home / Oil & Energy / Oil & Companies News / Saudi Aramco’s Q1 total output rises 13% to 13 mil boe/d as capex drops 7%

Saudi Aramco’s Q1 total output rises 13% to 13 mil boe/d as capex drops 7%

Saudi Aramco, the world’s biggest oil company, on May 15 reported a 13% increase in total hydrocarbons output to 13 million boe/d in the first quarter from a year earlier and a 7% decline in capital expenditures amid plans to increase spending.

Aramco, which had produced 11.5 million boe/d in Q1 2021, didn’t disclose its average oil production in the first quarter of 2022 in an earnings statement. It pumped an average crude production of 8.6 million b/d in the first quarter of 2021.

“Against the backdrop of increased volatility in global markets, we remain focused on helping meet the world’s demand for energy that is reliable, affordable and increasingly sustainable,” CEO Amin Nasser said in the statement.

“Energy security is vital and we are investing for the long term, expanding our oil and gas production capacity to meet anticipated demand growth and creating long-term shareholder value by capitalizing on our low lifting cost, low upstream carbon intensity, and integrated downstream business.”
Capex in the first quarter of 2022 dropped 7% to $7.6 billion from $8.2 billion a year earlier. Aramco didn’t give a reason for the drop.

“Aramco continues to expect capital expenditure to grow until around the middle of the decade to support the company’s long-term strategy realization,” it said.

Higher spending

In its 2021 earnings statement in March, Aramco disclosed an increased capital expenditure guidance of $40-50 billion for 2022, up from the 2021 level of $31.9 billion, as the company benefits from higher oil prices.

The company will dedicate 30% of the projected spend for upstream oil, 27% for gas and “a third” for downstream, Aramco CFO Ziad al-Murshed said in March.

Aramco is spending billions of dollars on expanding its maximum sustainable capacity to 13 million b/d by 2027 from about 12 million b/d now.

The company reported a record quarterly net income of $39.5 billion in the first quarter of 2022, an 82% increase from a year-earlier period, “primarily driven by higher crude oil prices and volumes sold, and improved downstream margins,” the company said.

Saudi Arabia has increased its production this year with the continued unwinding of historic OPEC+ cuts that were initiated in 2020 at the heart of the pandemic.

Saudi Arabia pumped 10.4 million b/d in April, below its 10.436 million b/d OPEC+ quota, according to the latest Platts survey by S&P Global Commodity Insights.

Overall, crude oil production by OPEC and its partners fell to a six-month low of 41.58 million b/d in April as Russian production took a battering from Western sanctions, the survey showed.

OPEC’s 13 members raised output by 70,000 b/d to 28.80 million b/d, led by gains in Saudi Arabia and Iraq, but production by key ally Russia fell by 900,000 b/d, and Kazakhstan also registered significant losses.

Gas production

Separately, Aramco said it plans to bring onstream in 2022 and 2023 additional natural gas production.

“Aramco made progress towards completing the Hawiyah and Haradh compression projects, with both due to come on-stream by the end of 2022 adding 1.3 billion standard cubic feet per day (bscfd) of raw gas,” it said. “The company also advanced construction of the Hawiyah gas plant expansion, part of the Haradh gas increment program, which is expected to be on-stream in 2023.”

Saudi Aramco also plans to significantly expand its gas production, channeling some of the fuel toward new, cleaner forms of energy such as blue hydrogen, it revealed in March.

The company plans to increase its gas production by more than 50% by 2030, tapping into vast unconventional reserves such as the Jafurah gas field.
Source: Platts

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping