Special Report-Saudi Aramco Profits Fell 73% as Oil Demand Shrinks
- October 14, 2020
- Posted by: Quatro Strategies
- Category: Energy
Saudi Aramco, the world’s largest oil company, announced on Sunday that its quarterly earnings fell more than 73 percent yearly, as lockdowns imposed to control the Covid-19 pandemic cut the demand for oil and slammed prices.
The company declared that profit fell from $24.7 billion to $6.6 billion. Despite the loss, the company said it would continue paying a quarterly dividend of $18.75 billion. Saudi Aramco is forced to pay $75 billion a year because of their commitment in the initial public offering on Saudi stock exchange.
Saudi government, which owns more than 98 percent of the company, is nearly the sole benefactor of the dividend pay. It is estimated that the company is borrowing $12 billion to pay the dividend.
Saudi Aramco recently lost its first place as the world’s most valuable company to Apple. The company has a market capitalization of $1.72 trillion compared to Apple’s $1.9 trillion.
Get your daily Business Brief
Business Brief delivers the latest insights straight to your inbox
You'll get daily industry insights on
Energy, Cleantech, Oil & Gas, Mining, Defense, Aviation, Construction, Transportation, Online Retail, Bigtech, Finance and Politics of Business
Read more insights
U.S. Lawmakers to Meet with Taiwan’s President on Unannounced Visit
A group of six U.S. lawmakers, including chairman of the U.S. Senate Foreign Relations Committee Menendez, arrived in Taiwan for a previously unannounced visit to show support to the island’s government amid increasing Chinese pressure.
BASF Takes €7.3 Billion Writedown Due to Wintershall Dea’s Russia Exit
German multinational chemicals giant BASF will take a €7.3 billion writedown as a result of its energy unit Wintershall Dea exiting Russia, triggering a net loss for 2022. Wintershall Dea has been deeply involved in Russian energy sector, with stakes in the Nord Stream pipelines and joint ventures with Russia’s Gazprom. Wintershall Dea CEO Mehren said limitations imposed by Moscow on Western-owned assets had made operating in the country impossible, and resulted in an expropriation of joint ventures in Russia. The company pointed out that Russian presidential decrees had retroactively slashed the prices at which joint ventures can sell their oil and gas to state-controlled Gazprom.
EU Ban on Russian Coal Comes into Effect
The European Union’s ban on Russian coal imports, the cornerstone of the bloc’s fifth round of sanctions in response to Moscow’s invasion of Ukraine, takes effect starting Thursday. EU’s first ban on Russian energy comes into force after the end of a four month wind down period for existing contracts.