‎Aramco’s debt ratio cut to 8% in Q1 2022, repays SAR 30 bln from SABIC deal ahead of schedule

‎Aramco’s debt ratio cut to 8% in Q1 2022, repays SAR 30 bln from SABIC deal ahead of schedule

Saudi Arabian Oil Co. (Saudi Aramco) continued to strengthen its balance sheet by reducing its gearing ratio to 8% by the end of Q1 2022, compared to 14% at the end of 2021.

In its Q1 2022 financial statement, the decline in gearing was a result of higher cash and cash equivalents, primarily attributable to stronger operating cash flows and cash proceeds in connection with Aramco’s gas pipeline transaction.

In line with the company's prudent financial framework and focus on capital flexibility, Aramco reduced its gross loans through prepayment to the Public Investment Fund (PIF) in January.

Accordingly, the total outstanding principal amount of promissory notes was reduced by SAR 30 billion related to the acquisition of a 70% stake in SABIC. This led to a retreat in financing costs.

Aramco made progress towards completing the Hawiyah and Haradh compression projects, as both due to come on-stream by the end of 2022.

The Company also advanced construction of Hawiyah Gas Plant expansion, part of the Haradh Gas increment program, which is expected to be on-stream in 2023.

The project is estimated to add a total capacity of 1.3 billion standard cubic feet per day (bscfd) of raw gas, the statement highlighted.

According to data compiled by Argaam,