Saudi Arabian state-owned oil giant Aramco says it expects to pay $31 billion in dividends to the Saudi government and its shareholders. This is despite reporting lower earnings for the first quarter – hit by lower oil prices and smaller volumes sold. The Saudi government, which directly holds about 82.2% of Aramco, relies heavily on the company’s payouts, which also include royalties and taxes.
The kingdom, the world’s biggest oil exporter, is spending billions of dollars to diversify its economy away from crude. Reuters reports that it expects total dividends of $124.3 billion to be declared in 2024, of those $43.1 billion in performance-linked dividends. The OPEC+ oil group has implemented a series of output cuts since late 2022 amid rising output from the United States and other non-member producers, and worries over demand as major economies grapple with high interest rates.
Reuters reports that with a projected budget deficit of 79 billion riyals ($21.07 billion) this year, the Kingdom could delay parts of its multiple mega projects. Finance Minister Mohammed Al Jadaan said recently that the kingdom’s Vision 2030 plan to transform its economy would be adjusted as needed, with some projects being scaled back or extended and others accelerated amid a challenging environment.
The kingdom could also raise up to 138 billion riyals ($36.80 billion) in financing in 2024, from $23 billion initially estimated at the beginning of year. The Saudi government in late January ordered Aramco to scrap its expansion plan to boost production capacity to 13 million barrels a day (mbpd), returning to the previous 12 mbpd target. Two projects that were part of the expansion plan – Safaniyah and Manifa – are now on hold, while three others are ongoing.
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