In 2019, Saudi Aramco produced 13.2 mmboed, including 9.9 mmbpd of crude oil (including blended condensate and excluding the Kingdom of Bahrain’s share of volumes produced from Abu Sa’fah field). As at December 31, 2019, based on the initial 40-year period and 20-year extension of the concession, Saudi Aramco’s reserves stood at 258.6 billion boe, including 201.9 billion barrels of crude oil and condensate, 25.7 billion barrels of NGLs and 190.6 tscf of natural gas. In addition, as at December 31, 2019, Saudi Aramco had a gross refining capacity of 6.4 mmbpd and net refining capacity of 3.6 mmbpd.
 
The Company is focused on maintaining its pre-eminent upstream position and continued strategic integration of its downstream operations to secure demand for its crude oil and to capture value across the hydrocarbon chain.

Saudi Aramco President & CEO Amin H. Nasser commented,
"Not surprisingly, our financial performance in the first three months of 2020 was impacted by the ongoing effects of the COVID-19 global pandemic as well as lower oil prices. However, with net income of $16.7 billion, ROACE of 26.3%, free cash flow of $15.0 billion and a gearing ratio of -4.9%, our first quarter results were exceptionally strong due to our prudent balance sheet management and low-cost structure. Saudi Aramco declared a dividend of $18.75 billion for the first quarter. These unparalleled results demonstrate Saudi Aramco’s agility, strength and resilience across economic cycles.

During the first quarter, we took steps to optimize our planned 2020 capital spending while working to identify opportunities to further improve operational productivity. Going forward, we retain significant flexibility to further adjust expenditures in response to the disruption caused by the coronavirus on both economic activity and energy demand.

The COVID-19 crisis is unlike any the world has experienced and we must all adapt to highly complex and rapidly changing developments. Our people remain our priority. It is after all, our employees – along with our partners and our contractors – whose work is essential to our core business of reliably and safely supplying energy to the world. Saudi Aramco is also assisting local communities in the fight against the coronavirus by providing support to healthcare and relief organizations, both in the Kingdom and in international locations.

In addition to seeking to minimize and mitigate the impact of the current economic situation, we are maintaining a firm focus on long-term growth and value creation as uncertain environments also present opportunities.

While COVID-19 has created unprecedented uncertainty, we have considerable experience in managing through times of adversity. This resilience will enable us to continue to deliver on our commitments to our shareholders."

First quarter highlights

Despite economic disruptions and volatility in commodity prices globally, Saudi Aramco delivered solid earnings and strong cash flows combined with reliable operational performance.

In response to the novel Coronavirus (COVID-19), Saudi Aramco has implemented active prevention programs at its sites and contingency plans to minimize the risk related to the pandemic on its operations. Throughout these challenges, the Company has undertaken various measures to ensure business continuity and to safeguard the wellbeing of its employees, such as the implementation of a work-from-home policy and adopting strict sanitization measures across its facilities. The Company will take further actions as necessary and appropriate.

Furthermore, Saudi Aramco implemented additional measures to optimize spending which resulted in reducing expected 2020 capital expenditures. In light of market conditions and recent commodity price volatility, Saudi Aramco continues to expect capital expenditures for the fiscal year 2020 to be between $25 billion to $30 billion (2019: $32.8 billion).

Upstream
Under challenging market conditions, Upstream maintained its pre-eminence in oil and gas production.

Significant Upstream developments in the first quarter of 2020:

• Saudi Aramco, through its wholly owned subsidiary Aramco Gulf Operations Company Ltd. (AGOC), resumed operations at Al-Khafji Joint Operations (KJO). AGOC operates in the offshore partitioned territory between the Kingdom of Saudi Arabia and the State of Kuwait, with a 50% ownership in KJO;
• In exploration activities, there were two successful field discoveries during the first quarter of 2020; one field discovery with both oil and gas reservoirs in the northwest part of the Kingdom and one oil field discovery in the Central area;
• The Fadhili Gas Plant increased its processing capacity from 1.5 bscfd at year-end 2019 to reach 2.0 bscfd during the first quarter of 2020. Progress remains on track and the plant is expected to reach its full capacity of 2.5 bscfd during the year;
• The new Ethane Deep Recovery Facility at the ‘Uthmaniyah Gas Plant was mechanically completed in January 2020 and is currently running at approximately 70% of its processing capacity of 1.4 bscfd. Full capacity will be achieved upon receipt of additional feedstock from the Haradh gas increment project, which is expected to complete in 2021; and
• The gas operations plants have cumulatively achieved a total of 57 million man-hours without any Loss Time Injuries (LTI) and received several 2019 GPA Midstream Association Safety Awards.

Downstream
Despite a challenging market environment, the Downstream business is keeping pace with its long-term strategy to capture value across the hydrocarbon value chain through further strategic integration and diversification of its operations.

Saudi Aramco continues to operate one of the world’s largest refining businesses, with gross refining capacity of 6.4 mmbpd as at March 31, 2020 (March 31, 2019: 4.9 mmbpd). In the first quarter of 2020, the Downstream segment consumed 35.5% (Q1 2019: 36.9%) of Saudi Aramco’s crude oil production.

Significant Downstream developments in the first quarter of 2020:

• Aramco Trading Company (ATC) signed an agreement to offtake AGOC’s full share of crude oil production following the restart of KJO; and
• In line with the International Maritime Organization 2020 regulations (IMO 2020), Saudi Aramco successfully commenced sales of very-low sulphur fuel oil (VLSFO) bunker fuel to local bunker customers located in both the Red Sea and Arabian Gulf areas.

Upstream financial performance

Earnings before interest and taxes (EBIT) for the three months ended March 31, 2020 totalled SAR 141,111 ($37,630) compared to SAR 169,946 ($45,319) during the same period in 2019, a decrease of SAR 28,835 ($7,689), or 17.0%.

This was primarily due to lower realized crude prices. The decrease in EBIT was partially offset by lower production royalties reflecting a decrease in crude prices and a lower royalty rate, in addition to higher revenue relating to the price equalization income on gas products.

Capital expenditures in the first three months of 2020 decreased by 2.1% compared to the same period in 2019, from SAR 20,964 ($5,590) to SAR 20,533 ($5,475). This was mainly attributable to the optimization of the drilling program.

KeyFacts Energy: Saudi Aramco Saudi Arabia country profile*

* Premium profile information includes; description, overview of assets, current and planned operational activity, capex, local and corporate locations, links to 'Linkedin People', news archive and farm-in opportunities.