MEOG: Aramco results and Iraq deals

This week’s MEOG includes Aramco’s Q3 results announcement and plans for deals between Baghdad and Riyadh.

Saudi Aramco this week announced its Q3 results which were highlighted by $30.4bn in net income, up 158% compared to the same period last year, taking it back to top spot as the world’s most profitable company.

Like other oil producers, the company continues to benefit from buoyant oil prices that have seen it surpass expectations and earn more than enough to continue covering the company’s $18.75bn quarterly dividend obligation.

While work remains ongoing to expand maximum sustainable capacity (MSC) for oil production by 1mn barrels per day (bpd), the company has announced ambitious plans to reach net zero and has reached financial close on a 1.5-GW solar project in the Kingdom.

Aramco said its Q3 results reflect “higher crude oil prices and volumes sold and stronger refining and chemicals margins in Q3, which were underpinned by rebounding global energy demand and increased economic activity in key markets”.

It provides further steady, positive momentum following the company’s $25.2bn Q2 results, up from the $21.7bn achieved in Q1. A major driver behind the stronger performance was the average realised price of crude, which increased from $67.9 per barrel in Q2 to $72.8 per barrel in Q3.

Meanwhile, Iraqi Oil Minister Ihsan Abdul Jabbar this week said that the government intends to sign billions of dollars worth of gas, renewables, water and petrochemicals deals with Saudi Arabia before the end of its term.

Talks between the Ministry of Oil and its Saudi counterpart have been ongoing since 2017, with the development of gas reserves in Iraq’s Western Desert and the Nebras petrochemical project apparently key to proceedings.

In an interview with the Arabic language Assabah daily, Abdul Jabbar, who is also chairman of the Iraqi National Oil Co. (INOC), said: “Iraq is negotiating with the global oil production giant [Saudi Aramco] to enter it as a partner in contracts for exploration and investment of free gas in the new fields in the Western Desert.”

“The results of those negotiations are being studied by experts from the two countries” ahead of agreement of terms on long-term agreements that “satisfy aspirations and interests of both countries”.