Saudi Aramco No Longer Biggest Company In The World, As Profits Decline By 44%

Saudi Aramco, one of the largest companies in the world by revenue saw its profit decline by 44% to $49 billion in 2020.

The coronavirus pandemic wrecked the oil company's income as the ensuing lockdown caused a major decline in the global demand for oil, sending oil prices to drop below $0, the lowest in a very long time. 

The government-owned company, based in Dahran has the world's second-largest crude reserve and is also the company with the largest daily oil production. In 2019, they amassed revenue of $88.2 billion.

The CEO, Amin Hassan Nasser announced that despite the drop in profits, they at Saudi Aramco had recorded one the highest profits by a public company in 2020. It also recorded other feats in 2020, including the largest single-day production of over 12 million barrels in April and a record for gas production of about 10.7 billion cubic feet.

Despite the financial strain the 88-year-old company is in, it still plans to pay its shareholders dividends worth $75 billion this year, just as promised at the start of the year. Although the CEO clearly states that there will be no increase.

The company however intends to cut down on capital expenditure from the earlier proposed estimate of about $50 billion to $35 billion. 

As more people get vaccinated and normal activities resume on a global scale, it is expected that oil demand recovers and production companies get back to business. Saudi Aramco is optimistic that it will still make profits and regain its position as a leading money-spinner, predicting production of up to 99 million barrels by 2022.

The coronavirus pandemic has brought to light the problem of climate change and the effects of petroleum and its by-products on our society. The process of refining petroleum leads to carbon dioxide and methane emissions, some of the most dangerous greenhouse gases toxic to humans and the ecosystem at large. Fossil carbon emissions dropped by about 2.4 billion tonnes in 2020 to 34 billion tonnes due to the lockdown. In 2019, carbon emissions were about 36.5 billion tonnes.

Saudi Aramco heavily benefits from the inaction of world powers towards fixing climate change and it is unclear what plans the company has to lower carbon emissions as the world is looking towards greener energy sources.