Latest news with #AminNasser
Trade Arabia
3 days ago
- Business
- Trade Arabia
'OIL DEMAND STAYS STRONG' Aramco plans more borrowing to fund growth: CEO
Saudi Aramco is targeting more borrowing to finance growth and better leverage its balance sheet, Chief Executive Officer Amin Nasser said, as the world's biggest oil exporter raised $5 billion in bonds this week. more…
Trade Arabia
3 days ago
- Business
- Trade Arabia
Aramco plans more borrowing to fund growth: CEO
Saudi Aramco is targeting more borrowing to finance growth and better leverage its balance sheet, Chief Executive Officer Amin Nasser said, as the world's biggest oil exporter raised $5 billion in bonds this week. The debt sale, along with $9 billion raised last year, is helping temper the impact of oil's slide on the company's finances. The Saudi state oil producer needs funds to plug a gap as declining free cash flow amid weaker crude prices fails to cover a massive dividend, even after the payout was reduced, a Bloomberg report said. The move boosted net debt to the highest in almost three years and has driven up leverage ratios, but they still remain way below some of the other major oil companies. 'Our gearing today is around 5%, still one of the lowest' in the industry, Nasser said in a Bloomberg TV interview. 'We will continue to tap into that additional bond markets in the future.' The company sold dollar-denominated notes in three tranches on Tuesday, taking its issuances over the past year to $14 billion and adding to a spree of borrowings by the Saudi government and its affiliated companies. The kingdom's debt levels jumped the most ever last quarter as it borrowed to help cover an expected budget shortfall resulting from an ambitious economic diversification plan and falling oil prices. Aramco's gearing ratio — a measure of its indebtedness — rose to 5.3% at the end of March from 4.5% at the end of last year. That compares with an average of 14% for international oil companies last year, Aramco said earlier this month. Shell's gearing is 18.7% and TotalEnergies' 14.3%. Weaker oil resulted in Aramco's first-quarter net income sliding 4.6% from a year earlier. Free cash flow — the money left over from operations after accounting for investments and expenses — declined 16% to $19.2 billion, and wasn't enough to cover a reduced $21.36 billion dividend. Some of the price pressures have deepened with crude's nearly 12% decline since early April. Riyadh has led a push by the biggest OPEC+ producers to unwind supply cuts at a faster-than-scheduled pace, at a time when there are concerns over demand amid US President Donald Trump's global tariff policies. Oil jumped, trading above $66 a barrel on Thursday, after a US court deemed most of Trump's tariffs illegal and blocked them. The administration appealed, signaling a coming legal wrangle. Despite the uncertainty that's whipsawed markets this year, Nasser reiterated his bullish outlook. Demand in the first quarter of this year rose by 1.7 million barrels a day and continues to expand, he said. Aramco, which has one of the world's lowest oil extraction costs of about $3 a barrel, can sustain a period of weak prices, he said. 'The fundamentals are still strong,' Nasser said of the markets. 'The tariffs had some impact on the global economy and sentiment, but, still the fundamentals are strong and we think that will continue for the foreseeable future.'
Arab News
3 days ago
- Business
- Arab News
Saudi Aramco to tap bond market amid low gearing at around 5%, CEO says
RIYADH: Saudi Aramco will continue tapping bond markets in the future despite maintaining one of the lowest gearing ratios in the energy industry, according to a top official. In an interview with Bloomberg, Aramco President and CEO Amin Nasser said the oil giant's gearing ratio, a financial metric that compares a company's debt to its equity, is currently around 5 percent. That's significantly lower than the industry average, where many peers operate with levels between 15 and 20 percent. 'Our gearing today is around 5 percent — still one of the lowest gearing, you know. It's almost half of the average compared to other energy industry players in the market, and we will continue to tap into that additional bond markets in the future,' Nasser said. He continued: 'But we have a low gearing ratio, which still, as you consider it, is very low compared to any players in the markets.' The low gearing ratio, which reflects strong financial discipline and limited reliance on debt, is part of what enables Aramco to maintain stability amid market fluctuations. Gearing is commonly used by analysts and investors to assess a company's financial leverage, with lower ratios often indicating a stronger balance sheet and reduced financial risk. In the interview, Nasser also reaffirmed the company's commitment to maintaining high dividends. 'We have a strong balance sheet, and our dividend is one of the highest, the highest globally. We're expecting to pay dividends that go to the majority shareholder and other shareholders, which is the government, of $85.4 billion this year.' He said the company benefits from having spare capacity, which allows it to bring more barrels to the market. 'For every million barrels, that will have a huge impact on our net income. I would say it will give you a $10 cushion for every million barrels that you put into the market.' Nasser added: 'We have today close to 3 million barrels of spare capacity, so other companies do not have that to cushion any drop in prices. For us, we do have that spare capacity that is healthy, strong, and when you put it, it allows you to increase significantly your net income.' He emphasized the company's ability to withstand lower oil prices due to its operational efficiency and robust infrastructure. 'We are the lowest cost producer. Our extraction cost is $3, and it still is $3. And with low extraction cost, healthy balance sheet, and our investment that is continuing to be capturing opportunities that we have,' Nasser said.
Business Times
3 days ago
- Business
- Business Times
Aramco will keep borrowing, CEO says, as oil slump cuts cashflow
[DUBAI] Saudi Aramco is targeting more borrowings to finance growth and better leverage its balance sheet, chief executive officer Amin Nasser said, as the world's biggest oil exporter raised US$5 billion in bonds this week. The Saudi state oil producer needs funds to plug a gap in finances as declining free cash flow amid weaker crude prices fails to cover a massive dividend payment, even after it was reduced. That has boosted net debt to the highest in almost three years and driven up leverage ratios, but they still remain way below some of the other major oil companies. 'Our gearing today is around 5 per cent, still one of the lowest' in the industry, Nasser said. 'We will continue to tap into that additional bond markets in the future.' The company sold US dollar-denominated notes in three tranches on Tuesday (May 27), taking its issuances over the past year to US$14 billion and adding to a spree of borrowings by the Saudi government and its affiliated companies. The kingdom's debt levels jumped the most ever last quarter as it borrows to help cover an expected budget shortfall resulting from an ambitious economic diversification plan and falling oil prices. Aramco's gearing ratio rose to 5.3 per cent at the end of March from 4.5 per cent at the end of last year. That compares with an average of 14 per cent for international oil companies last year, Aramco said earlier this month. Shell's gearing is 18.7 per cent and TotalEnergies's is 14.3 per cent. In Aramco's latest issuance, the longest-dated note, a US$2.25 billion 30-year note, will yield 1.55 percentage points more than Treasuries, a source familiar with the deal said. That is about 50 basis points higher than the sovereign risk premium for Saudi Arabia, according to data from JPMorgan Chase, making it attractive for investors. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Weaker oil resulted in Aramco's first-quarter net income sliding 4.6 per cent from a year earlier. Free cash flow – the money left over from operations after accounting for investments and expenses – declined 16 per cent to US$19.2 billion, and was not enough to cover a reduced US$21.36 billion dividend. Some of the price pressures have deepened with crude's 12 per cent decline since early April. Riyadh has led a push by the biggest Opec+ producers to unwind supply cuts at a faster-than-scheduled pace, at a time when there are concerns over demand amid US President Donald Trump's global tariff policies. Still, Nasser reiterated his bullish outlook. Demand in the first quarter of this year rose by 1.7 million barrels a day and continues to expand, he said. Aramco, which has one of the world's lowest oil extraction cost of about US$3 a barrel, can sustain a period of weak prices, he said. 'The fundamentals are still strong,' Nasser said of the markets. 'The tariffs had some impact on the global economy and sentiment, but, still the fundamentals are strong and we think that will continue for the foreseeable future.' BLOOMBERG
Argaam
3 days ago
- Business
- Argaam
Saudi Aramco to keep borrowing to boost growth; debt remains among lowest in industry: CEO
Saudi Arabian Oil Co. (Saudi Aramco) is targeting more borrowing to finance growth and better leverage its balance sheet, CEO Amin Nasser said, adding that the oil giant will continue to tap bond markets moving forward. In an interview with Bloomberg TV, the top executive indicated that the company's debts currently amount to nearly 5%, which is still among the lowest in the industry. Nasser also stated that he adopts an upbeat outlook for the oil market as fundamentals continue to be strong, highlighting that demand rose by 1.4 million barrels per day in the first quarter of 2025 and is continuing its growth. Aramco, which has one of the lowest levels of crude extraction costs globally at about $3 per barrel, can withstand a period of low prices, said Naser. He also pointed out that tariffs have had some impact on the global economy and investor sentiment. 'However, the fundamentals continue to be strong, as we believe that this will continue in the foreseeable future,' he said. According to Argaam 's data, Aramco announced earlier this week plans to issue international bonds under its US-denominated Global Medium Term Note Programme. The net proceeds from each bond issuance will be used by Saudi Aramco for general corporate purposes or any other purpose specified in the final terms for a series of bonds. Reuters also reported that Aramco set the price of its three-part bonds at $5 billion.
