The economic rebound in 2021 has caused the consumption of fossil fuels to explode on the planet. After hitting an all-time low in 2020 amid the pandemic, the engines of industry across the planet revved up to full throttle last year. As a result, Saudi Aramco announced a 124% increase in net profit in 2021 compared to 2020 in a statement, surpassing pre-pandemic levels, hours after fresh attacks by rebels from neighboring Yemen on the facilities of this Saudi energy giant. One of these attacks against the YASREF refinery in the city of Yanbu on the Red Sea, led to “a temporary reduction in production”, which will nevertheless be “compensated by stocks”, indicated the Ministry of Energy without further clarification.
As the war in Yemen rages on, the region is in the throes of strong geopolitical jolts amid tensions in oil markets around the world. Russia’s invasion of Ukraine has led to high volatility in energy prices in recent weeks. The prospect of a protracted war on the doorstep of the European Union could further destabilize the region.
A net profit of 110 billion euros
In a statement, Aramco said it made net profit of $110 billion (€99 billion) in 2021, compared to $49 billion in 2020. In 2019, it reported net profit of $88.2 billion. dollars in 2019, before the coronavirus pandemic hit the markets with considerable losses for the oil and aviation sectors in particular. By way of comparison, TotalEnergies made a profit of $16 billion last year.
Aramco’s announcement came amid tight oil markets, with oil prices rising sharply following Russia’s invasion of Ukraine. And a few hours after a new attack by Houthi rebels against Aramco facilities in southern Saudi Arabia, a country which leads a military coalition supporting Yemeni power against Houthi rebels supported by Iran.
According to this coalition, Saudi anti-aircraft defenses destroyed a ballistic missile and nine drones but booby-trapped missiles and drones hit their targets, including an Aramco distribution station in the south and a gas liquefaction plant of the group in the West. There was material damage.
“Exceptional year”
The Houthis claimed responsibility for attacks on “vital and important” establishments. On Sunday evening, the coalition announced a “new hostile attack” targeting Aramco’s “petroleum products distribution station” in Jeddah.
US National Security Advisor Jake Sullivan denounced in a statement “terrorist” attacks, saying that Washington “will continue to fully support (its) partners in the defense of their territory against Houthi attacks”.
The Gulf Cooperation Council, a group bringing together the six Arab petro-monarchies, headed by Saudi Arabia, has proposed talks in Riyadh from March 29 to try to settle the conflict in Yemen. But the Houthis have indicated that they will not go into “enemy” territory while saying they are not opposed to the principle of the talks.
In a statement, Aramco CEO, Amin Nasser, highlighted “an exceptional year 2021 for Aramco in terms of financial and operational results, initiatives, achievements and investments to come despite the challenges and the difficult global context in due to the pandemic”. “These strong results demonstrate our budgetary discipline, our flexibility in the face of changing market conditions and the focus on our long-term growth strategy.”
“Energy Security”
Amin Nasser stressed that the “outlook remains uncertain due to various macro-economic and geopolitical factors”.
But he acknowledged that “energy security is essential for billions of people around the world. That’s why we continue to make progress, increasing our crude production capacity, executing our gas expansion program and increasing our ability to convert liquids into chemicals”.
The world’s largest exporter of crude oil, Saudi Arabia is seeking to diversify its overly oil-dependent economy, with the Public Investment Fund (PIF), the kingdom’s sovereign wealth fund, investing in various sectors domestically and globally.
In February, the kingdom “transferred” 4% of Aramco shares to the PIF representing 80 billion dollars, an operation aimed at “supporting the restructuring of the national economy”.
In April 2021, Crown Prince Mohammed bin Salman (MBS) indicated that Aramco was considering selling 1% of its shares to a foreign energy giant. According to Saudi Aramco, in 2021 capital expenditure was $31.9 billion, an 18% increase from 2020. The company “plans about $40-50 billion in capital expenditure in 2022 and further growth through the middle of the decade.”
(With AFP)