Saudi Aramco’s profits quadruple as oil giant unveils plans to increase production

World’s largest fossil fuel producer to pump out more oil as scientists warn of ‘code red’ for humanity unless climate crisis is halted

Aramco announced its profits were up 288% to $25.5bn (AP)

The world’s largest oil company, Saudi Aramco, has announced plans to increase capacity as it revealed profits had almost quadrupled.

The state-backed oil producer reported its net income had jumped to $25.5bn (£18.4bn) in the second quarter of the year, up 288 per cent on the same period a year ago.

Saudi Aramco is pressing ahead with $35bn of investment this year and said it would pay $18.5bn (£13.3bn) in dividends, almost all of which will go to the Saudi government, which owns 98 per cent of the company’s shares.

Amin Nasser, Aramco’s chief executive, said he was “extremely positive about the second half of 2021 and beyond”. Aramco plans to scale up its capacity by a million barrels of oil per day, he said.

Fossil fuel companies are enjoying a rise in energy prices as restrictions are lifted and economic activity returns to pre-pandemic levels. Oil is now trading at $70 a barrel after plunging to less than $30 during the first round of lockdowns last year.

Prices have been boosted by the Organisation of the Petroleum Exporting Countries (Opec) and its allies agreeing to cut oil production.

The means higher prices at petrol pumps for UK drivers, with the RAC reporting that fuel costs are at an eight-year high.

Exxon Mobil and Royal Dutch Shell have both reported rising profits in recent weeks. Exxon posted a rise in income of $4.7bn in the second quarter, offset by a loss of more than $1bn. Shell reported its highest quarterly profit in more than two years.

News of oil majors’ revived fortunes comes as record wildfires burn in Greece and the US, while the Intergovernmental Panel on Climate Change (IPCC) released an alarming report stating that the climate crisis is now a “code red” for humanity.

The IPCC warned that major changes to the world’s climate are both inevitable and irreversible, with temperatures likely to rise by more than 1.5C above pre-industrial levels within the next two decades, negating the goal set by the 2015 Paris agreement.

The group of 234 scientists said there was “unequivocal” evidence that humans are to blame for rapidly rising land and ocean temperatures – the strongest statement yet from the IPCC after its last assessment report in 2013 said people were the “dominant cause” of global heating.

UK prime minister Boris Johnson said the report’s findings made “sobering reading”.

“It is clear that the next decade is going to be pivotal to securing the future of our planet,” he said in a statement. “We know what must be done to limit global warming – consign coal to history and shift to clean energy sources, protect nature, and provide climate finance for countries on the front line.”

“The IPCC report underscores the overwhelming urgency of this moment. The world must come together before the ability to limit global warming to 1.5C is out of reach,” said the US special presidential envoy for climate, John Kerry.