Analysts said, according to Reuters, that the crisis will force Aramco to borrow to fulfill its pledge to pay the largest dividends in the world and buy a controlling stake in the petrochemical giant, SABIC.
And compared to western oil companies, the kingdom's national oil company seems to be in a solid financial position.
Aramco announced on Tuesday that its net profit in the first quarter fell 25% to $ 16.6 billion, but it remains more than twice the combined profits of the 5 largest Western oil and gas companies , With the onset of the effects of travel restrictions associated with the emerging coronavirus.
But although Aramco raised $ 15 billion in cash, that amount was insufficient to pay the dividend of $ 18.8 billion for the first quarter, when average crude prices were Brent world record $ 50 a barrel.
Bernstein’s analysts said in Aramco’s note that it would borrow to pay its dividends, which it could not afford in the long run.
The ratio between Aramco's debt and market value decreased to (-5%) in the first quarter compared to a range from 11% to 36% for its Western competitors.
Last year, Saudi Arabia listed 1.7% of its national oil company, the largest exporter of crude in the world, on the local stock exchange, making it the most valuable company in the world.
It attracted investors with a promise of $ 75 billion in dividends over the next five years.
Aramco also agreed last year to acquire a controlling stake in SABIC Saudi Arabia, a deal that seeks to restructure it in the wake of the collapse in oil prices.
According to the current terms of the deal, Aramco is required to pay $ 25 billion this year to the Kingdom's sovereign wealth fund.
A dividend and a SABIC deal, together, are expected to pay the ratio between Aramco's debt and market value to exceed the upper limit of the range it set for itself, which ranges from 5, "said an analyst at Credit Suisse. % To 15%.
He added that if the government wants to pay Aramco $ 75 billion in dividends, it will do so through ...
