By Rania El Gamal and Saeed Azhar
DUBAI (Reuters) – Saudi Aramco reported a 12% fall in its half-year net result on Monday, but still the world's most profitable company, while India's Reliance Industries (NS 🙂 said Aramco wants to buy into its refining and petrochemical business.
Aramco signed a letter of intent to take a 20% stake in Relian's oil-to-chemicals business in one of the largest foreign investments ever in India, Reliance announced.
Aramco, which declined to comment on the Indian deal, reported a net profit of $ 46.9 billion.
By comparison, Apple Inc (O :), the world's most profitable listed company, earned $ 31
"Despite lower oil prices during the first half of 2019, we continued to deliver solid earnings and strong free cash flow supported by our consistent operating results, cost control and fiscal discipline," CEO Amin Nasser said in a statement.  The company generated total semi-annual revenue, including other sales-related revenues, of $ 163.88 billion, down from $ 167.68 billion the previous year. Free cash flow rose 6.7% to $ 38 billion.
Aramco said that the fall in revenue was mainly due to a 4% fall in the average realized price of $ 66 from $ 69 per barrel and an increase in purchasing, production and production costs, and depreciation and amortization costs. The
fall was partially offset by a $ 2.62 billion fall in income taxes, the company said.
Aramco expands both refining at home and in new markets, especially in Asia.
It plans to increase its refining capacity – in Saudi Arabia and abroad – to 8-10 million barrels per day, from around 5 million bd per now.
Its trading arm Aramco Trading Co (ATC) has also expanded overseas to better compete with global trading houses.
"Our economies are strong and we will continue to invest for future growth," said CEO Nasser.
Aramco also paid a dividend of $ 46.4 billion to the government, including a special dividend of $ 20 billion, up from $ 32 billion the year before.
(Graphics: Aramco vs. Major's Profit – https://tmsnrt.rs/2MXVW3h)
Aramco State reported on the economy for the first time ever earlier this year, revealing its 2018 earnings to get a public ranking and start issuing international bonds.
It aims to launch an initial public offering (IPO) by 2020-2021, after postponing the 2018 flotation.
Aramco's planned IPO is the centerpiece of Saudi Arabia's economic transformation drive to attract foreign investment and diversify away from oil.
Work on the IPO was halted in 2018 when Aramco turned its attention to acquiring a 70% stake in petrochemicals manufacturer Saudi Basic Industries Corp (SE :).
The company said it had a raw production of 10 million barrels per day in the first six months of the year, little changed from the previous year.
Saudi Arabia has reduced production under an OPEC-led package to reduce its global oil supply to support prices.
Saudi Arabia has pumped fewer than 10 million barrels per day for most of 2019.