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Saudi Aramco’s profit plunges 73.4%, sees signs of oil market recovery – Economic Times

Saudi state
oil group Aramco on Sunday reported a
73.4 per cent fall in second-quarter net
profit, a steeper drop than analysts had forecast, and said it expected capital expenditure for 2020 to be at the lower end
of a $25 billion to $30 billion range.

The world’s biggest
oil exporter said the rapid spread
of COVID-19 globally had significantly reduced demand for crude
oil, natural gas and petroleum products.

“We are seeing a partial
recovery in the energy
market as countries around the world take steps to ease restrictions and reboot their economies,” CEO Amin Nasser said in a statement.

profit fell to 24.6 billion riyals ($6.57 billion) for the quarter to June 30 from 92.6 billion riyals a year earlier.

Analysts had expected a net
of 31.3 billion riyals in the second quarter, according to the mean estimate from three analysts, provided by Refinitiv.

All major
oil companies have taken a hit in the second quarter as lockdowns to contain the coronavirus limited travel, which hurt
oil demand and sent
oil prices tumbling to levels not seen in nearly two decades.

Brent crude prices at the end
of the second quarter were down 38% from a year earlier, despite an agreement by OPEC+ producers to cut
oil supply by a record 9.7 million barrel per day from May to help to shore up prices and curb oversupply.

Aramco said it would distribute a dividend
of $18.75 billion for the second quarter
of this year, in line with its plan to pay a base dividend
of $75 billion for 2020.

BP earlier this month cut its dividend for the first time in a decade after a record $6.7 billion second-quarter loss, while Royal Dutch Shell in April cut its dividend for the first time since World War Two.