The Saudi government’s oil revenue almost doubled in the second quarter, even as the dividend was kept in state-controlled giant Aramco.
And Bloomberg reported that the oil company paid more than $65 billion to the government, which owns 94% of its shares, in the second quarter, compared with $35 billion a year earlier.
It’s a combination of dividends, income tax and oil royalties, even without an increase in shareholder payouts, according to financial statements released on Monday.
Despite efforts to diversify the economy, crude oil remains Saudi Arabia’s main source of income, and higher oil prices should provide the country with its first budget surplus in nearly a decade, even without an increase in payouts to Aramco shareholders.
Under the system, introduced in January 2020, Aramco pays 80% royalty on Brent crude above $100 per barrel and 45% on $70 to $100.
Global oil futures jumped above $100 a barrel in late February with the start of the Russian military operation in Ukraine and remained above or near that level until the end of July.
On the earnings side, Aramco has committed to $75 billion in annual payments even with the 2020 oil price crash and subsequent recovery, unlike some other major oil companies that cut their payments as prices fell. during the pandemic, and now analysts are expecting larger payouts. payments.
Aramco is working to increase its production capacity to 13 million barrels of crude oil per day by 2027 from the current 12 million as the kingdom sees oil demand continue to rise through the rest of the decade.
Source: Bloomberg agency.