Saudi Aramco Named World's Most Profitable Business
Apr 15 2019 Read 80 Times
After generating profits of more than £84.7 billion in 2018, state-owned oil company Saudi Aramco has emerged as the world's most profitable business. The Saudi Arabian national petroleum and natural gas company overtook both Apple and Exxon, with a 470-page bond-offering document filed with the London Stock Exchange revealing the profits were made on a huge 10.3 million barrels per day of crude oil.
The figures indicate the company raked in four times more profit than its industry rivals, including Royal Dutch Shell, which recorded profits of £17.5 billion in 2018, and US-owned Exxon Mobil, which made £16 billion.
Saudi Aramco launches campaign to source investors
Not only is Saudi Aramco the most profitable oil company on the planet, but it's also the world's biggest supplier of oil. It enjoys almost exclusive access to the country's rich hydrocarbon reserves, which are estimated at around 268 billion barrels.
The public disclosure of profits comes in the wake of a proposed stock market flotation that valued the company at an eye-watering £1.5 trillion, roughly twice the net worth of Apple. While the venture was put on hold, Saudi Aramco is now looking to raise around £7.5 billion via the sale of bonds to international investors. The cash injection will be used to acquire Sabic, a diversified petrochemicals company also based in Saudi Arabia. If the deal goes ahead it will cost Saudi Aramco a cool £52 billion though will inevitably translate to enormous profit margins in the future.
Room to improve on investment grade ratings
Saudi Aramco may have been crowned the world's most profitable company though there's still room for improvement when it comes to investment ratings. Both Moody’s Investors Service and Fitch Ratings assigned the company an A1 investment grade rating, the fifth highest level which puts it behind majors like Shell, Exxon and Chevron Corp.
While some experts predict global demand for petrol will peak by 2030, others maintain it will take much longer for the world to transition away from fossil fuels. In the meantime, companies are working hard to develop innovative solutions to maximise productivity, enhance safety and improve environmental credentials. For a closer look at the latest breakthroughs making waves in the oil and gas industry don't miss 'ASTM D86 Distillation of Light Hydrocarbon Samples – Can it be replaced by gas chromatography to deliver an automated, faster and safer analysis?'
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