A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. — Reuters pic
Reflecting a devastating year for oil markets and the global economy at large as the world continues to battle the coronavirus pandemic, oil giant Saudi Aramco has reported a 50 per cent fall in net income to US$23.2 billion for the first half of the year from US$46.9 billion over the same period in 2019.
Meanwhile, BP slashed its dividend payout by 50 per cent to 5.25 cents per share, which was larger than the 40 per cent forecast by analysts and appeared inevitable given a large debt pile, the collapse in oil and gas demand as well as growing expectations for a sluggish global economic recovery. “While many managed to sustain their business, the focus shifted decisively to preserve cash. Cost-cutting, particularly new investments in exploration and production, has been across the board, but bankruptcies so far have been limited mostly to US producers that have assets in areas with a high cost of production,” he told Bernama.
“More likely, it will take two years for confidence in travelling to pick up again, with widespread vaccines and travel restrictions lifted. Demand, then, may return to 100 million barrels per day as we had at the beginning of the year,” he added.
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