Aramco aims for diversification after record second-quarter revenue

Is Saudi Aramco (TADAWUL:2222) looking to diversify its revenue streams after soaring oil prices helped it generate record second-quarter profits?

Saudi Aramco saw its net income nearly double in the three-month period to 173.80 billion Saudi riyals ($46.28 billion) from 90.90 billion riyals.

Chairman and CEO Amin Nasser said growing demand for the company’s products had made record profits possible, adding that it had also benefited from favorable market conditions resulting from strong global oil prices. crude oil.

But as oil prices begin to fall, Saudi Aramco aims to improve its technology and generate products from different sources.

Reach new heights

Saudi Aramco was officially listed on the Saudi Stock Exchange on December 11, 2019. Upon its debut, it became the most valuable listed company with a market capitalization of $1.9 trillion. It was eventually dethroned by Apple (NASDAQ:AAPL), but thanks to rising oil prices, it reclaimed the title in May with a market value of $2.43 trillion compared to Apple’s $2.37 trillion.

Every move in the company’s price is highly dependent on oil and energy prices. Saudi Aramco experienced significant growth when oil prices hit multi-year highs early in the second half. When war broke out between Russia and Ukraine, oil prices rose again. These days, industry watchers aren’t so optimistic.

Last week, oil prices fell as demand could weaken due to an impending economic slowdown, Reuters reported.

TADAWUL: 2222 1D, with WTI crude oil

Given this trend in oil prices, the company was in the red, falling nearly 3% to $39.00 since Aug. 14. Its leadership doesn’t seem fazed, however, with Nasser saying that “we expect oil demand to continue to grow for the rest of the year.” of the decade, despite downward economic pressures on near-term global forecasts. »

Towards new goals

Nasser, as part of Saudi Aramco’s second quarter results, said the company is working to increase production from multiple energy sources, including oil and gas, as well as renewables and blue hydrogen. “We are moving forward with the largest investment program in our history and our approach is to invest in the reliable energy and petrochemicals the world needs, while developing low-carbon solutions that can contribute to a transition broader energy,” he added.

Khalid Al-Falih, Saudi minister of energy industry and mineral resources and chairman of the board of Saudi Aramco, said the company will be at the forefront of the country’s Vision 2030. directed organization” and that it “will seek to move, change and expand in areas that will not only make it more agile and responsive, but will also lead the industry towards a better energy future”.