Saudi Aramco pays out $31 billion Q1 dividend despite dip in profits

Saudi Aramco distributed $31 million in first quarter (Q1) dividends this year compared to $19.5 billion last year, despite a dip in net income of 14% due to lower oil prices and volumes.

According to its latest financial statement, the world's largest oil producer posted a net income of US $27.3 billion for Q1 ending March 30, down from $31.9 billion a year earlier.

Despite the lower earnings, Amin Nasser, President and Chief Executive Officer of Aramco highlighted in the company's statement that “Our first quarter performance reflects the resilience and strength of Aramco, reinforcing our position as a leading supplier of energy to economies, to industries and to people worldwide.”

Saudi Aramco declared a base dividend of $20.3 billion for Q1 2024, with an additional performance-linked dividend of $10.8 billion to be paid in the second quarter. The total expected dividends for 2024 are projected to reach $124.3 billion, including a base dividend of $81.2 billion and a performance-linked dividend of $43.1 billion, the company said in a statement.

Strategic initiatives and diversifying energy portfolio

The oil giant is investing in its integrated portfolio through, as it predicts an increase in energy demand over the mid-to long-term. As a result, Aramco's capital expenditure increased to $10.8 billion this quarter from $8.7 billion in the first quarter of last year.

“We also continue to execute our long-term strategy, and in the first quarter made significant progress on expanding our gas business and growing our globally-integrated downstream value chain, while maintaining our focus on consistently delivering value for our shareholders,” Nasser added.

Saudi Aramco awarded $7.7 billion worth of engineering, procurement, and construction contracts for the expansion of the Fadhili Gas Plant. This expansion is anticipated to increase processing capacity by 1.5 billion standard cubic feet per day (bscfd).

Additionally, the company announced the addition of 15 trillion standard cubic feet (tscf) to proven gas reserves and two billion stock tank barrels of condensate at the Jafurah unconventional field.

Saudi Aramco also completed the acquisition of a 100% equity stake in Chilean retailer Esmax, marking a significant step in its downstream expansion strategy.

Moreover, the company revealed plans to more than double its overall venture capital funding to $7.5 billion, aimed at financing disruptive technologies in various sectors, including digital and sustainability.