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1、Aramco announces second quarter and half year 2023 resultsCompany delivers strong profitability and cash flows,enabled by low-cost production and high supply reliability Net income:$30.1 billion(Q2)/$62.0 billion(H1)Cash flow from operating activities:$33.6 billion(Q2)/$73.3 billion(H1)Free cash flo
2、w1:$23.2 billion(Q2)/$54.1 billion(H1)Gearing ratio1 down to-10.5%as balance sheet continues to strengthen Sustainable and progressive dividend:Q1 2023 base dividend of$19.5 billion paid in the second quarter,up 4.0%year-on-year,and Q2 2023 dividend of$19.5 billion to be paid in the third quarter Co
3、mpany intends to distribute performance-linked dividends over six quarters from Q3 2023.First distribution of approximately$9.9 billion in Q3 2023 based on combined full-year 2022 results and half-year 2023 results Upstream oil and gas developments on track,including the Marjan,Berri,Dammam,and Zulu
4、f crude oil increments,as part of broader capacity expansions Downstream growth strategy advances with award of engineering,procurement,and construction contracts for the$11.0 billion Amiral petrochemicals complex Accredited lower-carbon ammonia shipments dispatched to key markets,supporting develop
5、ment of decarbonization optionsKey financial results“Our strong results reflect our resilience and ability to adapt through market cycles.We continue to demonstrate our long-standing ability to meet the needs of customers around the world with high levels of reliability.For our shareholders,we inten
6、d to start distributing our first performance-linked dividend in the third quarter.“At Aramco,our mid to long-term view remains unchanged.With a recovery anticipated in the broader global economy,along with increased activity in the aviation sector,ongoing investments in energy projects will be nece
7、ssary to safeguard energy security.“We are maintaining the largest capital spending program in our history,with the aim of increasing our oil and gas production capacity and expanding our Downstream business with petrochemicals projects,such as our$11.0 billion expansion of the SATORP refinery with
8、TotalEnergies,essential to meet future demand.“At the same time,we remain optimistic about the potential for new technologies to reduce our operational emissions,and our recent blue ammonia shipments to Asia highlight the growing market interest in the potential of alternative,lower-carbon energy so
9、lutions.”Second quarter ended June 30Half year ended June 30SARUSD*SARUSD*All amounts in millions unless otherwise stated20232022202320222023202220232022Net income 112,810181,64330,08348,439232,352329,66961,96187,912EBIT1 212,162328,24356,57787,533433,710607,808115,656162,083Capital expenditures39,2
10、3935,09310,4639,35872,03663,52819,20916,941Free cash flow186,836129,80123,15734,614202,686244,65754,05165,242Dividends paid73,16070,32819,50918,754146,310140,65939,01637,509ROACE1,2 25.9%31.3%25.9%31.3%25.9%31.3%25.9%31.3%Average realized crude oil price($/barrel)n/an/a78.8113.2n/an/a79.9105.6*Suppl
11、ementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.1.Non-IFRS measure:refer to Non-IFRS measures reconciliations and definitions section for further details.2.Calculated on a 12-month rolling basis.Amin H.NasserPresident and CEO2Saudi AramcoSecond quar
12、ter and half year interim report 2023Global crude oil prices decreased in the second quarter of 2023 as inflationary pressure contributed to economic uncertainty.Despite this,Aramco delivered resilient earnings and free cash flow through its low-cost upstream production and strategically integrated
13、downstream operations,underscoring its ability to withstand crude oil price fluctuations.Aramco remains focused on generating shareholder returns through a balanced mix of growth and yield,and the Company declared base dividend of SAR 73.2 billion($19.5 billion)for the second quarter.Following the a
14、nnouncement in the first quarter of Aramcos intention to introduce a mechanism for performance-linked dividends,and in recognition of the Groups performance,the Company intends to calculate the first performance-linked dividends based on the combined full-year results of 2022 and 2023.The Company ex
15、pects these performance-linked dividends to be calculated based on 70%of the Groups combined full-year free cash flow for 2022 and 2023,net of the base dividend and other amounts including external investments1.This is intended to be distributed over six quarters commencing in the third quarter of 2
16、023.The first distribution of these performance-linked dividends in the amount of SAR 37.0 billion($9.87 billion)has been approved by the Board and was calculated based on the full-year results of 2022 and the half-year results for the period ended June 30,2023.The subsequent distributions are expec
17、ted to be adjusted to reflect the remaining results for 2023.The relevant details,including dividend amounts,eligibility,and distribution dates of any future performance-linked dividends will be announced if and when declared at the Boards sole discretion,after considering the Companys financial pos
18、ition and ability to fund commitments including growth capital plans,and in accordance with the Companys Dividend Distribution Policy.For the full-year results of 2024 and onwards,the Company intends to target any performance-linked dividends to be in the amount of 50-70%of the Groups annual free ca
19、sh flow,net of the base dividend and other amounts including external investments,to be determined and announced with the full-year results of each year and distributed over the subsequent four quarters.Aramco believes demand for oil,gas,and chemicals will remain strong over the medium-to long-term.
20、During the quarter,capital expenditures were SAR 39.2 billion($10.5 billion)reflecting Aramcos aim to capture unique growth opportunities and maximize value from its integrated portfolio.Aramco seeks to strategically deleverage its balance sheet to maintain a high investment-grade credit rating and
21、optimize funding costs.In May,the Company made a final prepayment of the deferred consideration related to the SABIC acquisition in the amount of SAR 16.7 billion($4.5 billion),to fully reduce the outstanding principal amounts of promissory notes of SAR 18.7 billion($5.0 billion).As a result,the def
22、erred consideration related to the SABIC acquisition was fully settled.This final prepayment and the prepayment made in March 2023 resulted in savings of SAR 10.5 billion($2.8 billion).With respect to the distribution of bonus shares to shareholders approved at the Companys Extraordinary General Ass
23、embly on May 8,2023,the Company completed the capitalization of SAR 15.0 billion($4.0 billion)of retained earnings.As a result,Aramcos share capital increased correspondingly by SAR 15.0 billion($4.0 billion)to SAR 90.0 billion($24.0 billion).To help drive Aramcos long-term strategy across its globa
24、l portfolio and value chain,the Company has appointed Nasir K.Al-Naimi as President of its Upstream business and Mohammed Y.Al Qahtani as President of its Downstream business,effective July 1,2023.These newly created roles demonstrate Aramcos emphasis on its Upstream and Downstream businesses,and wi
25、ll help drive operational and financial performance in support of the Companys upstream capacity growth and downstream expansion.UpstreamAramco demonstrated its operational agility and disciplined execution plans in the second quarter as it advanced efforts to grow crude oil and gas production capac
26、ity.Total hydrocarbon production in the second quarter totaled 13.5 mmboed.As part of the planned expansion of Aramcos MSC to 13.0 mmbpd by 2027,engineering,construction,and procurement activities continued during the quarter for the following projects:The Marjan and Berri crude oil increments,which
27、 are expected to add production capacity of 300 mbpd and 250 mbpd,respectively,by 2025;The Dammam development project,which is expected to add 25 mbpd and 50 mbpd of crude oil by 2024 and 2027,respectively;and,The Zuluf crude oil increment,which is expected to provide a central facility to process a
28、 total of 600 mbpd of crude oil from the Zuluf field by 2026.Aramco also intends to increase its gas production capacity to meet domestic demand growth.During the quarter,the Company progressed multiple projects in support of this aim:Design and construction activities continued on the Jafurah Gas P
29、lant,part of the Jafurah unconventional gas field which is expected to commence production in 2025 and will gradually increase natural gas deliveries to reach a sustainable rate of 2.0 bscfd by 2030;1.External investments includes acquisition of an affiliate,net of cash acquired,and additional inves
30、tments in joint ventures and associates.Please see the Condensed consolidated statement of cash flows for more information.Second quarter highlights3Saudi AramcoSecond quarter and half year interim report 2023 Construction and procurement activities continued at the Tanajib Gas Plant,part of the Mar
31、jan development program.The plant is expected to be onstream by 2025 and add 2.6 bscfd of additional processing capacity from the Marjan,Safaniyah,and Zuluf fields;Hawiyah Unayzah Gas Reservoir Storage,the first underground natural gas storage in the Kingdom,achieved its maximum injection target of
32、1.5 bscfd.This program will provide up to 2.0 bscfd of natural gas for reintroduction into the Master Gas System by 2024;Gas compression projects at the Haradh and Hawiyah fields continued commissioning activities,and are expected to be fully onstream in 2023;and,Hawiyah Gas Plant expansion,which is
33、 part of the Haradh gas increment program,continued commissioning activities and is expected to be onstream in 2023.DownstreamAramco continued to strategically expand and integrate across the hydrocarbon value chain,advancing its goal of building a world-class integrated Downstream business centered
34、 on long-term value creation and crude placement security.During the quarter,the Company continued to demonstrate its excellent track record of dependable operations,achieving 99.8%supply reliability.In the first half of the year,Downstream utilized approximately 44%of Aramcos crude oil production.K
35、ey Downstream developments include the following:In June,Aramco and TotalEnergies awarded engineering,procurement,and construction contracts for the SAR 41.3 billion($11.0 billion)Amiral complex,a future world-scale petrochemicals facility expansion at the Saudi Aramco Total Refining&Petrochemical C
36、ompany(SATORP)refinery in Jubail,Saudi Arabia.The new complex,to be owned and operated by SATORP,aims to house one of the largest mixed-load steam crackers in the region,with a capacity to produce 1.65 million tons per annum of ethylene and other industrial gases.The petrochemical complex will enabl
37、e SATORP to help advance Aramcos liquids-to-chemicals strategy with expected commercial operation in 2027;Saudi Aramco Power Company(SAPCO),a wholly-owned subsidiary of Aramco,entered into a consortium with Water and Electricity Holding Company(Badeel),a wholly-owned company of the Public Investment
38、 Fund(PIF),and ACWA Power Company for the development of the Al Shuaibah 1 and Al Shuaibah 2 photovoltaic solar projects.The SAR 8.3 billion($2.2 billion)projects,located in Makkah province,are expected to have a combined capacity of 2.66 GW.This consortium supports Aramcos intention to invest in 12
39、 GW of solar and wind energy by 2030 in support of the Kingdoms National Renewable Energy Program;Aramco completed its strategic acquisition of a 10%interest in Rongsheng Petrochemical Company Limited(Rongsheng Petrochemical)for SAR 12.8 billion($3.4 billion).Under a long-term sales agreement,Aramco
40、 has the right to supply up to 480 mbpd of crude oil to Rongsheng Petrochemicals affiliate,Zhejiang Petroleum and Chemical Company Limited,which operates one of the largest integrated refining and chemicals complex in China with a capacity to process 800 mbpd of crude oil and to produce 4.2 million
41、metric tons of ethylene per year.The acquisition aligns with Aramcos strategic goal to enhance its Downstream business in high-growth geographies and advance its liquids-to-chemicals strategy;Aramco delivered three shipments of accredited,lower-carbon ammonia during the second quarter through its af
42、filiates Aramco Trading Company and SABIC Agri-Nutrients.These shipments align with the Companys strategy of developing lower-carbon products and solutions,and represent the supply of lower-carbon ammonia for fertilizer production and power generation in markets such as India,Japan and Taiwan;and,Ar
43、amco,TotalEnergies,and SABIC successfully converted oil derived from plastic waste into ISCC+certified circular polymers for the first time in the region.Through the process,end-of-life plastics including non-sorted plastics are converted into plastic waste derived oil,which is then used as feedstoc
44、k to produce certified circular polymers.SATORP,Aramcos Juaymah NGL Fractionation facility,and PETROKEMYA,are the three industrial plants involved in the process,and each received ISCC+certification to assure transparency and traceability of the recycled origin of the feedstock and products.The proj
45、ect illustrates the importance of the petrochemical sector in creating more sustainable products and solutions,and aims to pave the way for the creation of a domestic value chain for the advanced recycling of plastics to circular polymers in the Kingdom.4Saudi AramcoSecond quarter and half year inte
46、rim report 2023SustainabilityIn June,Aramco published its 2022 Sustainability Report,detailing the Companys sustainability performance and focus areas.The report sets out Aramcos plans across the environmental,social,and governance(ESG)spectrum,and describes how the Company is delivering on these ar
47、eas.In 2022,Aramco engaged with various stakeholders,including investors,to ensure their perspectives were considered.As a result,25 key performance indicators(KPIs)and metrics were added to this years report to provide greater quantitative and qualitative information across multiple material topics
48、,including biodiversity.This brings the total KPIs and metrics in the report to 61,with 16 metrics undergoing external assurance,compared to 36 total KPIs and metrics and six externally assured metrics in the 2021 Sustainability Report.Additionally,the boundaries for various metrics have been expand
49、ed to include entities under Aramcos operational control as the Company aims to present a more complete representation of its total global footprint.During the quarter,Aramco participated as a lead bidder in the largest-ever voluntary carbon credit auction,held by the Regional Voluntary Carbon Marke
50、t Company(RVCMC)in Nairobi,Kenya.Over 2.2 million tons of high-quality carbon credits were sold at the auction.The purchase of carbon credits enables Aramco to offset some of its emissions,supports the establishment of a credible and functioning Saudi-based regional voluntary carbon market,and is on
51、e of the Companys five levers to achieve GHG emissions reductions by 2035.Aramco supports the development of new industries in the Kingdom under its Namaat industrial investment program.During the quarter,the Company signed a shareholders agreement to establish an integrated steel plate manufacturin
52、g complex in Ras al-Khair Industrial City.Together with Baoshan Iron&Steel Company Limited(Baosteel)and PIF,the joint venture complex will be the first facility of its kind in the region and is expected to create jobs and contribute to the Kingdoms economic growth and diversification.By supporting s
53、teel plate manufacturing in Saudi Arabia,Aramco aims to further localize its supply chain and reduce reliance on imported steel,in line with iktvas objectives to maximize local content and strengthen the local supply chain resilience.5Saudi AramcoSecond quarter and half year interim report 2023 All
54、amounts in millions unless otherwise statedFinancial performance Summary of financial performanceFinancial ResultsKey factors affecting Aramcos financial results Aramcos results of operations and cash flows are primarily driven by market prices and volumes sold of hydrocarbons as well as refined and
55、 chemicals products.Ongoing economic uncertainty resulted in lower prices for hydrocarbons and continued pressure on refining and chemicals margins,compared to the same period in 2022.In January 2023,Aramco received a payment of SAR 15.6 billion($4.2 billion)related to the financing arrangement with
56、 the Jazan Integrated Gasification and Power Company(JIGPC).This is the second of the three payments to be received by Aramco as a result of this transaction that was completed in October 2021.The remaining amount of SAR 2.0 billion($0.5 billion)is expected to be received by the end of the year.With
57、 respect to the deferred consideration related to the SABIC acquisition,in March 2023 the Company made a third partial prepayment in the amount of SAR 59.0 billion($15.7 billion).This partial prepayment reduced the outstanding principal amounts of promissory notes by a total of SAR 49.1 billion($13.
58、1 billion)and loan charges totaling SAR 18.4 billion($4.9 billion).Aramco also paid an installment of SAR 41.3 billion($11.0 billion)due on April 7,2023.Additionally,in May Aramco made a final prepayment of SAR 16.7 billion($4.5 billion)to fully reduce the outstanding principal amounts of promissory
59、 notes of SAR 18.7 billion($5.0 billion),resulting in the full settlement of the deferred consideration related to the SABIC acquisition.These resulted in a decrease in total borrowings and cash and cash equivalents,and a gain of SAR 5.8 billion($1.5 billion).Second quarterIncome before income taxes
60、 and zakatfor the second quarter of 2023 was SAR 217,431($57,982),compared to SAR 329,794($87,946)for the same quarter in 2022.The decrease mainly reflected the impact of lower crude oil prices and weakening refining and chemicals margins.This was partially offset by a decrease in production royalti
61、es largely attributable to lower crude oil prices and lower average effective royalty rate.Income taxes and zakat for the second quarter of 2023 were SAR 104,621($27,899),compared to SAR 148,151($39,507)for the same quarter in 2022.This decrease was in line with lower earnings in the second quarter
62、of 2023.Half yearIncome before income taxes and zakatfor the first half of 2023 was SAR 446,665($119,111),compared to SAR 607,611($162,030)for the same period in 2022.The decrease was primarily a result of lower crude oil prices and weakening refining and chemicals margins.This was partially offset
63、by a decrease in production royalties,largely due to lower average effective royalty rate and lower crude oil prices,and higher finance and other income.Income taxes and zakat for the first half of 2023 were SAR 214,313($57,150),compared to SAR 277,942($74,118)for the same period in 2022.The decreas
64、e principally reflects the impact of lower earnings in the first half of 2023.For non-IFRS measures,refer to the Non-IFRS measures reconciliations and definitions section.Second quarterHalf yearSARUSD*SARUSD*All amounts in millions unless otherwise stated2023202220232022%change2023202220232022%chang
65、eIncome before income taxes and zakat217,431329,79457,98287,946(34.1)%446,665607,611119,111162,030(26.5)%Income taxes and zakat(104,621)(148,151)(27,899)(39,507)(29.4)%(214,313)(277,942)(57,150)(74,118)(22.9)%Net income112,810181,64330,08348,439(37.9)%232,352329,66961,96187,912(29.5)%*Supplementary
66、information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.6Saudi AramcoSecond quarter and half year interim report 2023All amounts in millions unless otherwise statedUpstream financial performanceSecond quarterEarnings before interest,income taxes and zakat(EBIT)for t
67、he second quarter of 2023 was SAR 212,456($56,655),compared to SAR 294,515($78,537)for the same quarter in 2022.The decrease in EBIT was primarily due to lower average realized crude oil prices,partially offset by a decrease in production royalties.Capital expenditures for the second quarter of 2023
68、 were SAR 31,319($8,352),an increase of 13.0%compared to SAR 27,726($7,394)for the same period in 2022.This increase was the result of additional development activity for crude oil increments to expand the MSC,and for progress associated with gas projects to increase gas production capacity.Half yea
69、r EBIT for the first half of 2023 was SAR 427,734($114,062),compared to SAR 558,265($148,871)for the same period in 2022.This reduction was largely due to a decline in average realized crude oil Second quarterHalf yearSARUSD*SARUSD*All amounts in millions unless otherwise stated2023202220232022%chan
70、ge2023202220232022%changeEarnings before interest,income taxes and zakat212,456294,51556,65578,537(27.9)%427,734558,265114,062148,871(23.4)%Capital expenditures-cash basis31,31927,7268,3527,39413.0%56,65149,56115,10713,21614.3%*Supplementary information is converted at a fixed rate of U.S.dollar 1.0
71、0=SAR 3.75 for convenience only.prices,partially offset by a decrease in production royalties.Capital expenditures for the first half of 2023 were SAR 56,651($15,107),an increase of 14.3%,compared to SAR 49,561($13,216)for the same period in 2022.The increase was principally attributable to the deve
72、lopment of crude oil increments related to increasing the crude oil MSC,and continued progression on multiple gas projects.Downstream financial performance Second quarterEBIT for the second quarter of 2023 was SAR 2,956($788),compared to SAR 47,764($12,737)for the same quarter in 2022.This decrease
73、was largely driven by weakening refining and chemicals margins and inventory valuation movement.Capital expenditures for the second quarter of 2023 increased by 10.4%,compared to the same period in 2022,from SAR 6,865($1,831)to SAR 7,580($2,021),primarily due to growth project developments.Half year
74、 EBIT for the first half of 2023 was SAR 15,786($4,210),compared to SAR 86,020($22,939)for the same period in 2022.This decrease in financial performance was primarily driven by inventory valuation movement and Second quarterHalf yearSARUSD*SARUSD*All amounts in millions unless otherwise stated20232
75、02220232022%change2023202220232022%changeEarnings before interest,income taxes and zakat2,95647,76478812,737(93.8)%15,78686,0204,21022,939(81.6)%Capital expenditures-cash basis7,5806,8652,0211,83110.4%14,72713,0393,9273,47712.9%*Supplementary information is converted at a fixed rate of U.S.dollar 1.
76、00=SAR 3.75 for convenience only.weakening refining and chemicals margins compared to the same period in 2022 which experienced strong global energy market conditions.Capital expenditures for the first half of 2023 were SAR 14,727($3,927),an increase of 12.9%compared to SAR 13,039($3,477)for the sam
77、e period in 2022.This increase was mainly due to an increase in international investments and expansion.7Saudi AramcoSecond quarter and half year interim report 2023 All amounts in millions unless otherwise statedNon-IFRS measures reconciliations and definitionsTwelve months ended June 30SARUSD*All
78、amounts in millions unless otherwise stated2023202220232022Net income506,688565,160135,117150,709Finance costs,net of income taxes and zakat4,4685,6261,1921,500Net income before finance costs,net of income taxes and zakat511,156570,786136,309152,209As at period start:Non-current borrowings323,397419
79、,78186,239111,942Current borrowings69,692119,85218,58531,961Total equity1,530,8231,189,393408,220317,171Capital employed 1,923,9121,729,026513,044461,074As at period end:Non-current borrowings227,649323,39760,70686,239Current borrowings57,64169,69215,37118,585Total equity1,741,8821,530,823464,502408
80、,220Capital employed2,027,1721,923,912540,579513,044Average capital employed1,975,5421,826,469526,812487,059ROACE25.9%31.3%25.9%31.3%*Supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.ROACEROACE measures the efficiency of Aramcos utilization of c
81、apital.Aramco defines ROACE as net income before finance costs,net of income taxes and zakat,as a percentage of average capital employed,calculated on a 12-month rolling basis.Average capital employed is the average of total borrowings plus total equity at the beginning and end of the applicable per
82、iod.Aramco utilizes ROACE to evaluate managements performance and demonstrate to its shareholders that capital has been used effectively.ROACE for the 12 months ended June 30,2023,was 25.9%,compared to 31.3%for the same period in 2022.The decrease in ROACE,calculated on a 12-month rolling basis,was
83、predominantly driven by lower earnings,mainly reflecting the decline in crude oil prices,weakening refining and chemicals margins,and higher average capital employed during the period.This Interim Report includes certain non-IFRS financial measures(ROACE,free cash flow,gearing,and EBIT),which Aramco
84、 uses to make informed decisions about its financial position and operating performance or liquidity.These non-IFRS financial measures have been included in this Interim Report to facilitate a better understanding of Aramcos historical trends of operation and financial position.Aramco uses non-IFRS
85、financial measures as supplementary information to its IFRS-based operating performance and financial position.The non-IFRS financial measures are not defined by,or presented in accordance with,IFRS.The non-IFRS financial measures are not measurements of Aramcos operating performance or liquidity un
86、der IFRS and should not be used instead of,or considered as alternatives to,any measures of performance or liquidity under IFRS.The non-IFRS financial measures relate to the reporting periods described in this Interim Report and are not intended to be predictive of future results.In addition,other c
87、ompanies,including those in Aramcos industry,may calculate similarly titled non-IFRS financial measures differently from Aramco.Because companies do not necessarily calculate these non-IFRS financial measures in the same manner,Aramcos presentation of such non-IFRS financial measures may not be comp
88、arable to other similarly titled non-IFRS financial measures used by other companies.8Saudi AramcoSecond quarter and half year interim report 2023All amounts in millions unless otherwise statedFree cash flowGearingGearing is a measure of the degree to which Aramcos operations are financed by debt an
89、d reflects available liquidity held in current and non-current investments and cash management instruments.Aramcos defines gearing as the ratio of net(cash)/debt(total borrowings less cash and cash equivalents,short-term investments,investment in debt securities(current and non-current),and non-curr
90、ent cash investments)to total equity and net(cash)/debt.Management believes that gearing is widely used by analysts and investors in the oil and gas industry to indicate a companys financial health and flexibility.Aramcos gearing ratio as at June 30,2023,was(10.5)%compared to(7.9)%as at December 31,
91、2022.The decrease in gearing was mainly driven by a higher net cash position largely due to operating cash inflows,partially offset by capital expenditures and dividend payments during the period.Second quarterHalf yearSARUSD*SARUSD*All amounts in millions unless otherwise stated20232022202320222023
92、202220232022Net cash provided by operating activities126,075164,89433,62043,972274,722308,18573,26082,183Capital expenditures(39,239)(35,093)(10,463)(9,358)(72,036)(63,528)(19,209)(16,941)Free cash flow86,836129,80123,15734,614202,686244,65754,05165,242*Supplementary information is converted at a fi
93、xed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.SARUSD*All amounts in millions unless otherwise statedJune 30,2023December 31,2022June 30,2023December 31,2022Total borrowings(current and non-current)285,290393,14476,077104,838Cash and cash equivalents(248,891)(226,047)(66,371)(60,279)Short
94、-term investments(193,623)(281,215)(51,633)(74,991)Investments in debt securities(current and non-current)1(8,461)(8,565)(2,256)(2,282)Non-current cash investments-Net(cash)(165,685)(122,683)(44,183)(32,714)Total equity1,741,8821,666,147464,502444,306Total equity and net(cash)1,576,1971,543,464420,3
95、19411,592Gearing(10.5)%(7.9)%(10.5)%(7.9)%*Supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.1.As at June 30,2023,investments in debt securities(current and non-current)are comprised of SAR 1,358($362)and SAR7,103($1,894)which form part of other
96、assets and receivables under current assets,and investments in securities under non-current assets,respectively.As at December 31,2022,the investments in debt securities(current and non-current)are comprised of SAR 906($240)and SAR 7,659($2,042)which form part of other assets and receivables under c
97、urrent assets,and investments in securities under non-current assets,respectively.Aramco uses free cash flow to evaluate its cash available for financing activities,including dividend payments.Aramco defines free cash flow as net cash provided by operating activities less capital expenditures.Free c
98、ash flow for the second quarter of 2023 was SAR 86,836($23,157),compared to SAR 129,801($34,614)for the same quarter in 2022.This decrease of SAR 42,965($11,457)was mainly due to lower net cash provided by operating activities resulting from lower earnings.This was partially offset by favorable move
99、ments in working capital and a reduction in cash paid for the settlement of income,zakat and other taxes.Capital expenditures increased by SAR 4,146($1,105)in the second quarter of 2023,compared to the same period in 2022,mainly attributable to additional development activity for crude oil increment
100、s to expand the MSC and for progress associated with gas projects to increase gas production capacity.Free cash flow for the first half of 2023 was SAR 202,686($54,051),compared to SAR 244,657($65,242)for the same period in 2022.The decrease of SAR 41,971($11,191)was largely attributable to lower ne
101、t cash provided by operating activities reflecting lower earnings,partially offset by favorable movements in working capital.Capital expenditures for the first half of 2023 increased by SAR 8,508($2,268)compared to the same period in 2022,principally driven by the development of crude oil increments
102、 related to increasing the crude oil MSC and continued progression on multiple gas projects.9Saudi AramcoSecond quarter and half year interim report 2023 All amounts in millions unless otherwise statedEarnings before interest,income taxes and zakat(EBIT)Aramco defines EBIT as net income plus finance
103、 costs and income taxes and zakat,less finance income.Aramco believes EBIT provides useful information regarding its financial performance to analysts and investors.EBIT for the second quarter ended June 30,2023,was SAR 212,162($56,577),compared to SAR 328,243($87,533)for the same quarter in 2022.Th
104、is decrease of SAR 116,081($30,956)was primarily a result of the decline in crude oil prices and weakening refining and chemicals margins,partially offset by a decrease in production royalties during the period.EBIT for the half year of 2023,was SAR 433,710($115,656),compared to SAR 607,808($162,083
105、)for the same period in 2022.The decrease of SAR 174,098($46,427)mainly represents the impact of lower crude oil prices and weakening refining and chemicals margins compared to the same period in 2022,partially offset by a decrease in production royalties during the period.Second quarterHalf yearSAR
106、USD*SARUSD*All amounts in millions unless otherwise stated20232022202320222023202220232022Net income 112,810181,64330,08348,439232,352329,66961,96187,912Finance income(7,425)(4,497)(1,980)(1,199)(18,288)(5,082)(4,877)(1,355)Finance costs2,1562,9465757865,3335,2791,4221,408Income taxes and zakat104,6
107、21148,15127,89939,507214,313277,94257,15074,118Earnings before interest,income taxes and zakat212,162328,24356,57787,533433,710607,808115,656162,083*Supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.10Saudi AramcoSecond quarter and half year inte
108、rim report 2023Terms and abbreviations Currencies SAR/Saudi RiyalSaudi Arabian riyal,the lawful currency of the Kingdom$/USD/Dollar U.S.dollarUnits of measurement Barrel(bbl)Barrels of crude oil,condensate or refined products boe Barrels of oil equivalent bpd Barrels per day bscf Billion standard cu
109、bic feet bscfd Billion standard cubic feet per day GWGigawatts mboed Thousand barrels of oil equivalent per day mbpd Thousand barrels per day mmbbl Million barrels mmboe Million barrels of oil equivalent mmboed Million barrels of oil equivalent per day mmbpd Million barrels per day mmBTU Million Bri
110、tish thermal unitsmmscf Million standard cubic feet mmscfd Million standard cubic feet per daymmtpa Million metric tonnes per annumper day Volumes are converted into a daily basis using a calendar year(Gregorian)scf Standard cubic feettscf Trillion standard cubic feetTechnical termsCO2Carbon dioxide
111、.CondensateLight hydrocarbon substances produced with raw gas which condenses into liquid at normal temperatures and pressures associated with surface production equipment.HydrocarbonsCrude oil and other hydrogen and carbon compounds in liquid or gaseous state.ReliabilityTotal products volume shippe
112、d/delivered within 24 hours of the scheduled time,divided by the total products volume committed.Any delays caused by factors that are under the Companys control(e.g.terminal,pipeline,stabilization,or production)negatively affect the score,whereas delays caused by conditions that are beyond the Comp
113、anys control,such as adverse weather,are not considered.A score of less than 100 percent indicates there were issues that negatively impacted reliability.11Saudi AramcoSecond quarter and half year interim report 2023GlossaryAffiliate Except with respect to financial information,the term Affiliate me
114、ans a person who controls another person or is controlled by that other person,or who is under common control with that person by a third person.In any of the preceding,control could be direct or indirect.With respect to financial information,the term Affiliate means the Companys subsidiaries,joint
115、arrangements and associate,each as defined by IFRS.AssociateWith respect to financial information,the term Associate,as defined by IFRS,means an entity over which the Company has significant influence but not control,generally reflected by a shareholding of between 20%and 50%of the voting rights.Sig
116、nificant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.AuditorPricewaterhouseCoopers Public Accountants,the independent external auditor of Aramco.BoardThe Board of Directors of the Compan
117、y.CompanySaudi Arabian Oil Company(The Company).ControlExcept with respect to financial information,the term“Control”means the ability to influence the actions or decisions of another person through,whether directly or indirectly,alone or with a relative or affiliate(a)holding 30%or more of the voti
118、ng rights in a company,or(b)having the right to appoint 30%or more of the Board of a company;“controller”shall be construed accordingly.With respect to financial information,the term“Control”is defined by IFRS:The Company controls an entity when it is exposed to,or has rights to,variable returns fro
119、m its involvement with the entity and has the ability to affect those returns through its power over the entity.COVID19 The coronavirus disease identified in 2019.DomesticRefers to the Kingdom of Saudi Arabia.EBITEarnings(losses)before interest,income taxes and zakat.ESGEnvironmental,social,governan
120、ce.General Assembly Any Ordinary General Assembly or Extraordinary General Assembly.GovernmentThe Government of the Kingdom(and“Governmental”shall be interpreted accordingly).HHijri calendar.IAS International Accounting Standard(s).IFRS International Financial Reporting Standard(s)that are endorsed
121、in the Kingdom and other standards and pronouncements endorsed by SOCPA.Joint ventureThe term joint venture,as defined by IFRS,means a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement.KingdomKingdom of Sau
122、di Arabia.MENAMiddle East and North Africa.PIFPublic Investment Fund of Saudi Arabia.ROACEReturn on average capital employed.SABICSaudi Basic Industries Corporation.Saudi Aramco/Aramco/GroupSaudi Arabian Oil Company,together with its consolidated subsidiaries,and where the context requires,its joint
123、 operations,joint ventures and associates.Any reference to“us”,“we”or“our”refers to Saudi Aramco/Aramco except where otherwise stated.Unless otherwise stated,the text does not distinguish between the activities and operations of the Company and those of its subsidiaries.ShareholderAny holder of shar
124、es.SOCPA Saudi Organization for Chartered and Professional Accountants.SubsidiariesExcept with respect to financial information,the term subsidiaries mean the companies that Aramco controls through its ability to influence the actions or decisions of another person through,whether directly or indire
125、ctly,alone or with a relative or affiliate(i)holding 30%or more of the voting rights in a company or(ii)having the right to appoint 30%or more of the Board of a company.With respect to financial information,the term subsidiaries is defined by IFRS,meaning entities over which the Company has controls
126、.12Saudi AramcoSecond quarter and half year interim report 2023Disclaimer This Interim Report may contain certain forward-looking statements with respect to Aramcos financial position,results of operations and business and certain of Aramcos plans,intentions,expectations,assumptions,goals and belief
127、s regarding such items.These statements include all matters that are not historical fact and generally,but not always,may be identified by the use of words such as“believes”,“expects”,“are expected to”,“anticipates”,“intends”,“estimates”,“should”,“will”,“shall”,“may”,“is likely to”,“plans”,“outlook”
128、or similar expressions,including variations and the negatives thereof or comparable terminology.Investors and prospective investors should be aware that forward-looking statements are not guarantees of future performance and that Aramcos actual financial position,results of operations and business a
129、nd the development of the industries in which it operates may differ significantly from those made in or suggested by these forward-looking statements.In addition,even if Aramcos financial position,results of operations and business and the development of the industries in which it operates are cons
130、istent with these forward-looking statements,those results or developments may not be indicative of results or developments in subsequent periods.Factors that could cause actual results to differ materially from Aramcos expectations are contained in cautionary statements in this Interim Report and i
131、nclude,among other things,the following:Supply,demand and price fluctuations with respect to oil and gas,and Aramcos other products;Global economic market conditions;Natural disasters and public health pandemics or epidemics(such as COVID-19),and weather conditions(including those associated with cl
132、imate change);Competition in the industries in which Aramco operates;Climate change concerns and related impacts on the global demand for hydrocarbons and hydrocarbon-based products,as well as risks related to Aramcos ESG goals and targets;Conditions affecting the transportation of products;Operatio
133、nal risk and hazards common in the oil and gas,refining and petrochemicals industries;The cyclical nature of the oil and gas,refining and petrochemicals industries;Terrorism and armed conflict,political and social instability and unrest,and actual or potential armed conflicts in the MENA region and
134、other areas;Managing Aramcos growth and risks related to its strategic growth objectives;Risks in connection with projects under development and recent and future acquisitions and joint ventures,including with respect to SABIC;Aramcos dependence on the reliability and security of its IT systems;Mana
135、ging Aramcos subsidiaries,joint operations,joint ventures,associates and entities in which it holds a minority interest;Aramcos exposure to interest rate risk and foreign exchange risk;Risks related to operating in a regulated industry and changes to oil,gas,environmental or other regulations that i
136、mpact the industries in which Aramco operates;Risks related to litigation,including international trade litigation,disputes or agreements;and Risks related to the Kingdom.Disclaimer Risk Factors For a discussion of our risk factors,please see Aramcos Annual Report 2022,available through the investor
137、 relations section of Aramcos website at undertake no obligation to update or revise any forward-looking statement,whether as a result of new information,future events or otherwise.All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are ex
138、pressly qualified in their entirety by the cautionary statements referred to above and our risk factors in our Annual Report and statements contained elsewhere in this Interim Report.Aramcos financial information herein has been extracted from Aramcos condensed consolidated interim financial report
139、for the three and six month periods ended June 30,2023,which is prepared and presented in accordance with IAS 34,that is endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants(“SOCPA”).In addition,thi
140、s document includes certain“non-IFRS financial measures.”These measures are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS.Rather,these measures are provided as additional information to complement IFRS measures by providing further understanding of Aramc
141、os results of operations,cash flow and financial position from managements perspective.Accordingly,they should not be considered in isolation or as a substitute for analysis of Aramcos financial information reported under IFRS.A reconciliation of non-IFRS measures is included in the Non-IFRS measure
142、s reconciliations and definitions section of this Interim Report.13Saudi AramcoSecond quarter and half year interim report 2023Independent auditors review report.14Condensed consolidated statement of income.15 Condensed consolidated statement of comprehensive income.16 Condensed consolidated balance
143、 sheet.17Condensed consolidated statement of changes in equity.18 Condensed consolidated statement of cash flows.19 Notes to the condensed consolidated interim financial report.20Condensed consolidated interim financial reportFor the three-month and six-month periods ended June 30,2023(unaudited)Pri
144、cewaterhouseCoopers,License No.25,Saudi Aramco,P.O.Box 1659,Dhahran 31311,Kingdom of Saudi Arabia T:+966(13)873-6800,F:+966(13)873-8883, Report on review of condensed consolidated interim financial report To the shareholders of Saudi Arabian Oil Company Introduction We have reviewed the accompanying
145、 condensed consolidated balance sheet of Saudi Arabian Oil Company and its subsidiaries as at June 30,2023 and the related condensed consolidated statements of income,comprehensive income and cash flows for the three-month and six-month periods then ended and the condensed consolidated statement of
146、changes in equity for the six-month period then ended and other explanatory notes(the“condensed consolidated interim financial report”).Management is responsible for the preparation and presentation of this condensed consolidated interim financial report in accordance with International Accounting S
147、tandard 34,Interim Financial Reporting,that is endorsed in the Kingdom of Saudi Arabia.Our responsibility is to express a conclusion on this condensed consolidated interim financial report based on our review.Scope of review We conducted our review in accordance with International Standard on Review
148、 Engagements 2410,Review of interim financial information performed by the independent auditor of the entity,that is endorsed in the Kingdom of Saudi Arabia.A review of interim financial information consists of making inquiries,primarily of persons responsible for financial and accounting matters,an
149、d applying analytical and other review procedures.A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing,that are endorsed in the Kingdom of Saudi Arabia,and consequently does not enable us to obtain assurance that we would become aware
150、 of all significant matters that might be identified in an audit.Accordingly,we do not express an audit opinion.Conclusion Based on our review,nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial report is not prepared,in all mate
151、rial respects,in accordance with International Accounting Standard 34,Interim Financial Reporting,that is endorsed in the Kingdom of Saudi Arabia.PricewaterhouseCoopers Omar M.Al Sagga License No.369 August 6,2023 Saudi Aramco Second quarter and half year interim report 2023 All amounts in millions
152、of Saudi Riyals unless otherwise stated Amin H.Nasser Director,President&Chief Executive Officer Ziad T.Al Murshed Executive Vice President&Chief Financial Officer Bassam M.Asiri Senior Vice President&Controller 15 Condensed consolidated statement of income SAR USD*2nd quarter 2nd quarter Six months
153、 Six months 2nd quarter 2nd quarter Six months Six months Note 2023 2022 2023 2022 2023 2022 2023 2022 Revenue 10 402,564 562,068 820,024 1,029,071 107,350 149,885 218,673 274,419 Other income related to sales 45,754 86,305 88,127 136,199 12,202 23,015 23,501 36,320 Revenue and other income related
154、to sales 448,318 648,373 908,151 1,165,270 119,552 172,900 242,174 310,739 Royalties and other taxes(52,094)(112,689)(120,336)(180,216)(13,892)(30,051)(32,090)(48,058)Purchases(119,064)(144,601)(225,433)(251,347)(31,751)(38,561)(60,116)(67,026)Producing and manufacturing(24,132)(17,687)(47,265)(39,7
155、93)(6,435)(4,716)(12,604)(10,611)Selling,administrative and general(14,370)(24,639)(29,617)(44,304)(3,832)(6,570)(7,898)(11,814)Exploration(2,361)(1,803)(4,113)(3,149)(629)(481)(1,096)(840)Research and development(1,052)(1,012)(1,983)(1,866)(280)(269)(528)(497)Depreciation and amortization 5,6(22,69
156、2)(21,453)(44,667)(42,401)(6,052)(5,721)(11,912)(11,307)Operating costs(235,765)(323,884)(473,414)(563,076)(62,871)(86,369)(126,244)(150,153)Operating income 212,553 324,489 434,737 602,194 56,681 86,531 115,930 160,586 Share of results of joint ventures and associates(790)2,973(1,531)4,816(210)793(
157、408)1,284 Finance and other income 7,824 5,278 18,792 5,880 2,086 1,408 5,011 1,568 Finance costs(2,156)(2,946)(5,333)(5,279)(575)(786)(1,422)(1,408)Income before income taxes and zakat 217,431 329,794 446,665 607,611 57,982 87,946 119,111 162,030 Income taxes and zakat 7(104,621)(148,151)(214,313)(
158、277,942)(27,899)(39,507)(57,150)(74,118)Net income 112,810 181,643 232,352 329,669 30,083 48,439 61,961 87,912 Net income attributable to Shareholders equity 108,881 173,795 226,352 315,807 29,035 46,346 60,361 84,215 Non-controlling interests 3,929 7,848 6,000 13,862 1,048 2,093 1,600 3,697 112,810
159、 181,643 232,352 329,669 30,083 48,439 61,961 87,912 Earnings per share(basic and diluted)17 0.45 0.72 0.94 1.31 0.12 0.19 0.25 0.35*This supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only,and is presented in millions of U.S.dollars.Saudi Aramco S
160、econd quarter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated Amin H.Nasser Director,President&Chief Executive Officer Ziad T.Al Murshed Executive Vice President&Chief Financial Officer Bassam M.Asiri Senior Vice President&Controller 16 Condensed con
161、solidated statement of comprehensive income SAR USD*2nd quarter 2nd quarter Six months Six months 2nd quarter 2nd quarter Six months Six months Note 2023 2022 2023 2022 2023 2022 2023 2022 Net income 112,810 181,643 232,352 329,669 30,083 48,439 61,961 87,912 Other comprehensive income(loss),net of
162、tax 8 Items that will not be reclassified to net income Remeasurement of post-employment benefits 2,363 5,000 210 16,544 630 1,334 56 4,412 Share of post-employment benefits remeasurement from joint ventures and associates 11(21)111 76 2(6)29 20 Changes in fair value of equity investments classified
163、 as fair value through other comprehensive income(332)(1,112)(579)(74)(89)(297)(155)(20)Items that may be reclassified subsequently to net income Cash flow hedges and other(887)519(912)966(236)139(243)258 Changes in fair value of debt securities classified as fair value through other comprehensive i
164、ncome 95(179)158(379)25(48)42(101)Share of other comprehensive(loss)income of joint ventures and associates(283)(867)730(69)(75)(231)195(18)Currency translation differences(411)(3,046)(1,346)(4,217)(109)(813)(358)(1,125)556 294(1,628)12,847 148 78(434)3,426 Total comprehensive income 113,366 181,937
165、 230,724 342,516 30,231 48,517 61,527 91,338 Total comprehensive income attributable to Shareholders equity 109,445 174,854 225,022 329,095 29,185 46,628 60,006 87,759 Non-controlling interests 3,921 7,083 5,702 13,421 1,046 1,889 1,521 3,579 113,366 181,937 230,724 342,516 30,231 48,517 61,527 91,3
166、38*This supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only,and is presented in millions of U.S.dollars.Saudi Aramco Second quarter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated Amin H.Nasser Dire
167、ctor,President&Chief Executive Officer Ziad T.Al Murshed Executive Vice President&Chief Financial Officer Bassam M.Asiri Senior Vice President&Controller 17 Condensed consolidated balance sheet SAR USD*June 30,December 31,June 30,December 31,Note 2023 2022 2023 2022 Assets Non-current assets Propert
168、y,plant and equipment 5 1,343,250 1,303,266 358,200 347,538 Intangible assets 6 164,634 159,328 43,902 42,487 Investments in joint ventures and associates 71,370 72,196 19,032 19,252 Deferred income tax assets 16,554 18,093 4,414 4,825 Post-employment benefits 23,505 23,034 6,268 6,142 Other assets
169、and receivables 38,113 32,418 10,164 8,645 Investments in securities 26,524 26,758 7,073 7,136 1,683,950 1,635,093 449,053 436,025 Current assets Inventories 83,997 100,528 22,399 26,808 Trade receivables 159,823 164,442 42,619 43,851 Due from the Government 46,645 54,545 12,439 14,545 Other assets
170、and receivables 30,952 31,054 8,254 8,281 Short-term investments 193,623 281,215 51,633 74,991 Cash and cash equivalents 248,891 226,047 66,371 60,279 763,931 857,831 203,715 228,755 Total assets 2,447,881 2,492,924 652,768 664,780 Equity and liabilities Shareholders equity Share capital 90,000 75,0
171、00 24,000 20,000 Additional paid-in capital 26,981 26,981 7,195 7,195 Treasury shares(1,712)(2,236)(457)(596)Retained earnings:Unappropriated 1,405,166 1,339,892 374,711 357,305 Appropriated 6,000 6,000 1,600 1,600 Other reserves 8 1,936 3,279 516 874 1,528,371 1,448,916 407,565 386,378 Non-controll
172、ing interests 213,511 217,231 56,937 57,928 1,741,882 1,666,147 464,502 444,306 Non-current liabilities Borrowings 9 227,649 318,380 60,706 84,901 Deferred income tax liabilities 126,087 122,311 33,623 32,616 Post-employment benefits 27,366 26,923 7,298 7,179 Provisions and other liabilities 32,420
173、27,777 8,646 7,408 413,522 495,391 110,273 132,104 Current liabilities Trade and other payables 134,433 135,390 35,848 36,104 Obligations to the Government:Income taxes and zakat 7 85,552 104,978 22,814 27,995 Royalties 14,851 16,254 3,960 4,334 Borrowings 9 57,641 74,764 15,371 19,937 292,477 331,3
174、86 77,993 88,370 Total liabilities 705,999 826,777 188,266 220,474 Total equity and liabilities 2,447,881 2,492,924 652,768 664,780*This supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only,and is presented in millions of U.S.dollars.Saudi Aramco Se
175、cond quarter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated Amin H.Nasser Director,President&Chief Executive Officer Ziad T.Al Murshed Executive Vice President&Chief Financial Officer Bassam M.Asiri Senior Vice President&Controller 18 Condensed cons
176、olidated statement of changes in equity SAR USD*Shareholders equity Retained earnings Share capital Additional paid-in capital Treasury shares Unappropriated Appropriated Other reserves(Note 8)Non-controlling interests Total Total Balance at January 1,2022 60,000 26,981(2,828)1,018,443 6,000 4,661 1
177、67,411 1,280,668 341,512 Net income 315,807 13,862 329,669 87,912 Other comprehensive income(loss)13,288(441)12,847 3,426 Total comprehensive income 315,807 13,288 13,421 342,516 91,338 Transfer of post-employment benefits remeasurement 15,453 (15,453)Transfer of share of post-employment benefits re
178、measurement from joint ventures and associates 76 (76)Treasury shares issued to employees 303(50)9 262 70 Share-based compensation (2)147 145 38 Dividends(Note 17)(140,659)(140,659)(37,509)Bonus shares issued(Note 17)15,000 (15,000)Sale of non-controlling equity interest in a subsidiary 58,125 58,12
179、5 15,500 Acquisition of non-controlling interest in a subsidiary (181)(181)(48)Dividends to non-controlling interests and other (10,053)(10,053)(2,681)Balance at June 30,2022 75,000 26,981(2,525)1,194,068 6,000 2,576 228,723 1,530,823 408,220 Balance at January 1,2023 75,000 26,981(2,236)1,339,892 6
180、,000 3,279 217,231 1,666,147 444,306 Net income 226,352 6,000 232,352 61,961 Other comprehensive loss (1,330)(298)(1,628)(434)Total comprehensive income(loss)226,352 (1,330)5,702 230,724 61,527 Transfer of post-employment benefits remeasurement(Note 8)176 (176)Transfer of share of post-employment be
181、nefits remeasurement from joint ventures and associates(Note 8)111 (111)Treasury shares issued to employees 524(172)(29)323 86 Share-based compensation (2)303 301 80 Dividends(Note 17)(146,310)(146,310)(39,016)Bonus shares issued(Note 17)15,000 (15,000)Dividends to non-controlling interests and othe
182、r 119 (9,422)(9,303)(2,481)Balance at June 30,2023 90,000 26,981(1,712)1,405,166 6,000 1,936 213,511 1,741,882 464,502*This supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only,and is presented in millions of U.S.dollars.Saudi Aramco Second quarter
183、and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated Amin H.Nasser Director,President&Chief Executive Officer Ziad T.Al Murshed Executive Vice President&Chief Financial Officer Bassam M.Asiri Senior Vice President&Controller 19 Condensed consolidated stat
184、ement of cash flows SAR USD*2nd quarter 2nd quarter Six months Six months 2nd quarter 2nd quarter Six months Six months Note 2023 2022 2023 2022 2023 2022 2023 2022 Income before income taxes and zakat 217,431 329,794 446,665 607,611 57,982 87,946 119,111 162,030 Adjustments to reconcile income befo
185、re income taxes and zakat to net cash provided by operating activities Depreciation and amortization 5,6 22,692 21,453 44,667 42,401 6,052 5,721 11,912 11,307 Exploration and evaluation costs written off 1,058 180 1,574 471 282 48 420 126 Loss on disposal of property,plant and equipment 457 941 1,07
186、7 1,418 121 251 287 378 Inventory movement 336 118 1,272 204 89 31 339 54 Share of results of joint ventures and associates 790(2,973)1,531(4,816)210(793)408(1,284)Finance and other income(7,824)(5,278)(18,792)(5,880)(2,086)(1,408)(5,011)(1,568)Finance costs 2,156 2,946 5,333 5,279 575 786 1,422 1,4
187、08 Change in fair value of investments through profit or loss(59)187(152)271(15)50(40)72 Change in joint ventures and associates inventory profit elimination(203)(85)(195)(74)(54)(22)(52)(20)Other(537)(100)333(30)(144)(26)88(8)Change in working capital Inventories 2,773(19,930)16,666(41,570)740(5,31
188、5)4,445(11,085)Trade receivables 5,194(19,942)6,907(80,470)1,386(5,317)1,842(21,458)Due from the Government(1,985)(35,465)7,900(45,373)(530)(9,458)2,106(12,100)Other assets and receivables(1,957)1,927(28)(4,963)(521)513(7)(1,324)Trade and other payables 4,976 10,433(3,251)30,996 1,326 2,782(867)8,26
189、6 Royalties payable(2,644)6,618(1,403)31,647(705)1,764(374)8,439 Other changes Other assets and receivables(1,193)3,867(5,541)3,237(319)1,032(1,478)863 Provisions and other liabilities 578(457)810(426)155(122)216(113)Post-employment benefits 141 903 446 2,262 37 241 119 603 Settlement of income,zaka
190、t and other taxes(116,105)(130,243)(231,097)(234,010)(30,961)(34,732)(61,626)(62,403)Net cash provided by operating activities 126,075 164,894 274,722 308,185 33,620 43,972 73,260 82,183 Capital expenditures 4(39,239)(35,093)(72,036)(63,528)(10,463)(9,358)(19,209)(16,941)Acquisition of an affiliate,
191、net of cash acquired 16(a)(402)(9,886)(402)(107)(2,636)(107)Distributions from joint ventures and associates 1,006 1,226 2,328 1,955 268 326 620 521 Additional investments in joint ventures and associates(2,054)(809)(2,158)(1,100)(547)(216)(575)(293)Dividends from investments in securities 341 289 3
192、62 306 90 78 96 82 Interest received 5,985 797 12,798 1,278 1,596 213 3,412 341 Net investments in securities(304)(102)(960)(1,044)(81)(28)(256)(279)Net(purchases)maturities of short-term investments(38,019)(59,990)87,592(68,415)(10,139)(15,997)23,358(18,244)Net cash(used in)provided by investing ac
193、tivities(72,284)(94,084)18,040(130,950)(19,276)(25,089)4,810(34,920)Dividends paid to shareholders of the Company 17(73,160)(70,328)(146,310)(140,659)(19,509)(18,754)(39,016)(37,509)Dividends paid to non-controlling interests in subsidiaries(5,656)(4,689)(7,512)(6,950)(1,508)(1,250)(2,003)(1,853)Pro
194、ceeds from sale of non-controlling equity interest in a subsidiary 58,125 15,500 Acquisition of non-controlling interest in a subsidiary (181)(181)(48)(48)Proceeds from issue of treasury shares 165 137 320 263 44 36 85 70 Proceeds from borrowings 2,089 1,016 17,797 4,841 557 270 4,745 1,290 Repaymen
195、ts of borrowings(61,058)(86,714)(120,909)(119,992)(16,282)(23,123)(32,242)(31,998)Principal portion of lease payments(3,079)(2,914)(6,225)(5,963)(821)(777)(1,660)(1,590)Interest paid(4,875)(4,032)(7,079)(5,323)(1,300)(1,076)(1,887)(1,420)Net cash used in financing activities(145,574)(167,705)(269,91
196、8)(215,839)(38,819)(44,722)(71,978)(57,558)Net(decrease)increase in cash and cash equivalents(91,783)(96,895)22,844(38,604)(24,475)(25,839)6,092(10,295)Cash and cash equivalents at beginning of the period 340,674 357,870 226,047 299,579 90,846 95,432 60,279 79,888 Cash and cash equivalents at end of
197、 the period 248,891 260,975 248,891 260,975 66,371 69,593 66,371 69,593*This supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only,and is presented in millions of U.S.dollars.Saudi Aramco Second quarter and half year interim report 2023 All amounts i
198、n millions of Saudi Riyals unless otherwise stated 20 Notes to the condensed consolidated interim financial report 1.General information The Saudi Arabian Oil Company(the“Company”),with headquarters located in Dhahran,Kingdom of Saudi Arabia(the“Kingdom”),is engaged in prospecting,exploring,drilling
199、 and extracting hydrocarbon substances(“Upstream”)and processing,manufacturing,refining and marketing these hydrocarbon substances(“Downstream”).The Company was formed on November 13,1988 by Royal Decree No.M/8;however,its history dates back to May 29,1933 when the Saudi Arabian Government(the“Gover
200、nment”)granted a concession to the Companys predecessor for the right to,among other things,explore the Kingdom for hydrocarbons.Effective January 1,2018,Council of Ministers Resolution No.180,dated 1/4/1439H(December 19,2017),converted the Company to a Saudi Joint Stock Company with new Bylaws.On D
201、ecember 11,2019,the Company completed its Initial Public Offering(“IPO”)and its ordinary shares were listed on the Saudi Exchange.In connection with the IPO,the Government,being the sole owner of the Companys shares at such time,sold an aggregate of 3.45 billion ordinary shares,or 1.73%of the Compan
202、ys share capital.On February 13,2022,the Government transferred 4%of the Companys issued shares to the Public Investment Fund(“PIF”),the sovereign wealth fund of the Kingdom.Subsequently,the Government announced on April 16,2023,the transfer of 4%of the Companys issued shares to Saudi Arabian Invest
203、ment Company(“Sanabil Investments”),a wholly owned company of PIF.The Government remains the Companys largest shareholder,retaining a 90.19%direct shareholding.The condensed consolidated interim financial report of the Company and its subsidiaries(together“Saudi Aramco”)was approved by the Board of
204、Directors on August 6,2023.2.Basis of preparation and other significant accounting policies The condensed consolidated interim financial report has been prepared in accordance with International Accounting Standard 34(“IAS 34”),Interim Financial Reporting,that is endorsed in the Kingdom,and other st
205、andards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants(“SOCPA”).This condensed consolidated interim financial report is consistent with the accounting policies and methods of computation and presentation set out in Saudi Aramcos consolidated financial
206、statements for the year ended December 31,2022,except for new and amended standards disclosed below.The results for the interim periods are unaudited and include all adjustments necessary for a fair presentation of the results for the periods presented.This condensed consolidated interim financial r
207、eport should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31,2022,which have been prepared in accordance with International Financial Reporting Standards(“IFRS”)that are endorsed in the Kingdom,and other standards and pronouncements
208、issued by SOCPA.The consolidated financial statements for the year ended December 31,2022 are also in compliance with IFRS as issued by the International Accounting Standards Board(“IASB”).Translations from SAR to USD presented as supplementary information in the condensed consolidated statement of
209、income,condensed consolidated statement of comprehensive income,condensed consolidated balance sheet,condensed consolidated statement of changes in equity,and condensed consolidated statement of cash flows at June 30,2023 and December 31,2022 and for the three-month and six-month periods ended June
210、30,2023 and 2022,are for convenience and were calculated at the rate of USD 1.00=SAR 3.75 representing the exchange rate at the balance sheet dates.New or amended standards(i)Saudi Aramco adopted the following IASB pronouncements,as endorsed in the Kingdom,effective for annual periods beginning on o
211、r after January 1,2023:Amendment to IAS 12,Income Taxes In May 2023,the IASB issued an amendment to IAS 12,Income Taxes,relating to the International Tax Reform-Pillar Two Model Rules.This amendment applies to income taxes arising from tax law enacted or substantively enacted to implement the Pillar
212、 Two model rules published by the Organisation for Economic Co-operation and Development(“OECD”),including tax law that implements qualified domestic minimum top-up taxes described in those rules.The amendment requires entities to make additional disclosures in their annual financial statements rega
213、rding their current tax exposure to pillar two income taxes.Further,as required by the amendment,Saudi Aramco has applied the mandatory temporary exception to neither recognize nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes.Saudi Aramco Second q
214、uarter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated 21 2.Basis of preparation and other significant accounting policies continued IFRS 17,Insurance Contracts In May 2017,the IASB issued IFRS 17,Insurance Contracts,which introduces a new comprehens
215、ive accounting model for insurance contracts,and sets out the principles for the recognition,measurement,presentation and disclosure for the issuers of those contracts.The new standard replaces IFRS 4,Insurance Contracts,that was issued in 2005,and allowed insurers to use a range of different accoun
216、ting treatments for insurance contracts.There is no material impact on the condensed consolidated interim financial report from the adoption of IFRS 17.There are no other amendments or interpretations that are effective for annual periods beginning on or after January 1,2023 that have a material imp
217、act on the condensed consolidated interim financial report.(ii)Saudi Aramco has not early adopted any new accounting standards,interpretations or amendments that are issued but not yet effective.3.Fair value estimation Fair value is the price that would be received to sell an asset or paid to transf
218、er a liability in an orderly transaction between market participants at the measurement date.The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or,in the absence
219、 of a principal market,in the most advantageous market for the asset or liability.Management believes that the fair values of Saudi Aramcos financial assets and liabilities that are measured and recognized at amortized cost are not materially different from their carrying amounts at the end of the r
220、eporting period.The following table presents Saudi Aramcos assets and liabilities measured and recognized at fair value at June 30,2023 and December 31,2022,based on the prescribed fair value measurement hierarchy on a recurring basis.Saudi Aramco did not measure any financial assets or financial li
221、abilities at fair value on a non-recurring basis at June 30,2023 and December 31,2022.There were no changes made to any of the valuation techniques and valuation processes applied as of December 31,2022 and changes in unobservable inputs are not expected to materially impact the fair values.Assets L
222、evel 1i Level 2ii Level 3iii Total June 30,2023 Investments in securities:Equity securities at Fair Value Through Other Comprehensive Income(FVOCI)8,256 36 2,130 10,422 Debt securities at FVOCI 94 7,782 7,876 Equity securities at Fair Value Through Profit or Loss(FVPL)527 1,512 6,959 8,998 Debt secu
223、rities at FVPL 247 247 Trade receivables related to contracts with provisional pricing arrangements 121,564 121,564 8,877 9,577 130,653 149,107 Other assets and receivables:Interest rate swaps 703 703 Commodity derivative contracts 3,932 3,932 Currency forward contracts 80 80 Financial assets-option
224、 rights 3,599 3,599 4,715 3,599 8,314 Total assets 8,877 14,292 134,252 157,421 December 31,2022 Investments in securities:Equity securities at FVOCI 8,699 33 2,285 11,017 Debt securities at FVOCI 47 7,463 7,510 Equity securities at FVPL 318 1,562 6,201 8,081 Debt securities at FVPL 53 82 4 139 Trad
225、e receivables related to contracts with provisional pricing arrangements 113,542 113,542 9,117 9,140 122,032 140,289 Other assets and receivables:Interest rate swaps 734 734 Commodity derivative contracts 2,987 47 3,034 Currency forward contracts 130 130 Financial assets-option rights 2,687 2,687 3,
226、851 2,734 6,585 Total assets 9,117 12,991 124,766 146,874 Saudi Aramco Second quarter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated 22 3.Fair value estimation continued Liabilities Level 1i Level 2ii Level 3iii Total June 30,2023 Trade and other pa
227、yables:Interest rate swaps 14 14 Commodity derivative contracts 3,283 12 3,295 Currency forward contracts 786 786 Provisions and other liabilities:Financial liabilities-options and forward contracts 2,902 2,902 Total liabilities 4,083 2,914 6,997 December 31,2022 Trade and other payables:Interest ra
228、te swaps 16 16 Commodity derivative contracts 228 2,358 81 2,667 Currency forward contracts 134 134 Provisions and other liabilities:Financial liabilities-options and forward contracts 2,929 2,929 Total liabilities 228 2,508 3,010 5,746 i.Quoted prices(unadjusted)in active markets for identical asse
229、ts or liabilities.ii.Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.iii.Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.The changes in
230、 Level 3 investments in securities for the six-month period ended June 30,2023 and the year ended December 31,2022 are as follows:June 30,December 31,2023 2022 Beginning 8,490 5,268 Net additions 744 2,790 Net unrealized fair value(loss)gain(176)391 Realized gain 31 41 Ending 9,089 8,490 The movemen
231、t in trade receivables related to contracts with provisional pricing arrangements mainly relates to sales transactions,net of settlements,made during the period,resulting from contracts with customers(Note 10).Unrealized fair value movements on these trade receivables are not significant.The change
232、in the carrying amount of commodity derivative contracts primarily relates to purchase and sales of derivative contracts,including recognition of a gain or loss that results from adjusting a derivative to fair value.Fair value movements on commodity derivative contracts are not significant.The movem
233、ents in financial assets-option rights and financial liabilities-options and forward contracts,being put,call and forward contracts on Saudi Aramcos own equity instruments in certain subsidiaries,are mainly due to changes in the unrealized fair values of those contracts during the period.Saudi Aramc
234、o Second quarter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated 23 4.Operating segments Saudi Aramco is engaged in prospecting,exploring,drilling,extracting,processing,manufacturing,refining and marketing hydrocarbon substances within the Kingdom an
235、d has interests in refining,petrochemical,distribution,marketing and storage facilities outside the Kingdom.Saudi Aramcos operating segments are established on the basis of those components that are evaluated regularly by the President&CEO,considered to be the Chief Operating Decision Maker.The Chie
236、f Operating Decision Maker monitors the operating results of Saudi Aramcos operating segments separately for the purpose of making decisions about resource allocation and performance assessment.Segment performance is evaluated based on revenues,costs and a broad range of key performance indicators i
237、n addition to segment profitability.For management purposes,Saudi Aramco is organized into business units based on the main types of activities.At June 30,2023,Saudi Aramco had two reportable segments,Upstream and Downstream,with all other supporting functions aggregated into a Corporate segment.Ups
238、tream activities include crude oil,natural gas and natural gas liquids exploration,field development and production.Downstream activities consist primarily of refining and petrochemical manufacturing,supply and trading,distribution and power generation,logistics,and marketing of crude oil and relate
239、d services to international and domestic customers.Corporate activities include primarily supporting services including Human Resources,Finance and IT not allocated to Upstream and Downstream.Transfer prices between operating segments are on an arms length basis in a manner similar to transactions w
240、ith third parties.There are no differences from the consolidated financial statements for the year ended December 31,2022 in the basis of segmentation or in the basis of measurement of segment earnings before interest,income taxes and zakat,except for some limited changes in the pricing basis of cer
241、tain inter-segment transactions between Upstream and Downstream.Information by segments for the three-month period ended June 30,2023 is as follows:Upstream Downstream Corporate Eliminations Consolidated External revenue 192,585 209,446 533 402,564 Other income related to sales 16,587 29,167 45,754
242、Inter-segment revenue 84,285 8,833 65(93,183)Earnings(losses)before interest,income taxes and zakat 212,456 2,956(4,211)961 212,162 Finance income 7,425 Finance costs (2,156)Income before income taxes and zakat 217,431 Capital expenditures-cash basis 31,319 7,580 340 39,239 Information by segments f
243、or the three-month period ended June 30,2022 is as follows:Upstream Downstream Corporate Eliminations Consolidated External revenue 285,732 275,746 590 562,068 Other income related to sales 26,604 59,701 86,305 Inter-segment revenue 131,024 11,542 68(142,634)Earnings(losses)before interest,income ta
244、xes and zakat 294,515 47,764(5,115)(8,921)328,243 Finance income 4,497 Finance costs (2,946)Income before income taxes and zakat 329,794 Capital expenditures-cash basis 27,726 6,865 502 35,093 Information by segments for the six-month period ended June 30,2023 is as follows:Upstream Downstream Corpo
245、rate Eliminations Consolidated External revenue 393,824 425,224 976 820,024 Other income related to sales 29,483 58,644 88,127 Inter-segment revenue 172,064 17,540 126(189,730)Earnings(losses)before interest,income taxes and zakat 427,734 15,786(7,060)(2,750)433,710 Finance income 18,288 Finance cos
246、ts (5,333)Income before income taxes and zakat 446,665 Capital expenditures-cash basis 56,651 14,727 658 72,036 Saudi Aramco Second quarter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated 24 4.Operating segments continued Information by segments for
247、the six-month period ended June 30,2022 is as follows:Upstream Downstream Corporate Eliminations Consolidated External revenue 528,511 499,650 910 1,029,071 Other income related to sales 41,977 94,222 136,199 Inter-segment revenue 241,235 22,327 143(263,705)Earnings(losses)before interest,income tax
248、es and zakat 558,265 86,020(8,773)(27,704)607,808 Finance income 5,082 Finance costs (5,279)Income before income taxes and zakat 607,611 Capital expenditures-cash basis 49,561 13,039 928 63,528 5.Property,plant and equipment Land and land improvements Buildings Oil and gas properties Plant,machinery
249、 and equipment Depots,storage tanks and pipelines Fixtures,IT and office equipment Construction-in-progress Total Cost January 1,2023 55,911 91,617 641,029 932,134 95,610 20,755 262,903 2,099,959 Additions1 575 709 187 7,209 243 84 72,342 81,349 Acquisition(Note 16(a)556 805 798 92 65 139 2,455 Cons
250、truction completed 800 741 20,458 15,977 4,826 268(43,070)Currency translation differences(180)8 (363)(221)(22)(46)(824)Transfers and adjustments 1,210 44 155(81)(33)36(140)1,191 Transfer of exploration and evaluation assets 384 384 Retirements and sales(77)(574)(191)(3,883)(204)(311)(75)(5,315)June
251、 30,2023 58,795 93,350 661,638 951,791 100,313 20,875 292,437 2,179,199 Accumulated depreciation January 1,2023(19,411)(42,330)(244,678)(431,840)(45,802)(12,632)(796,693)Charge for the period(729)(1,775)(10,247)(28,692)(1,452)(764)(43,659)Currency translation differences(2)9 (3)100 12 116 Transfers
252、and adjustments(5)5(34)111 8(36)49 Retirements and sales 58 469 60 3,145 204 302 4,238 June 30,2023(20,089)(43,622)(254,899)(457,279)(46,942)(13,118)(835,949)Property,plant and equipment-net,June 30,2023 38,706 49,728 406,739 494,512 53,371 7,757 292,437 1,343,250 1.Additions include borrowing costs
253、 capitalized during the six-month period ended June 30,2023,amounting to SAR 3,551,which were calculated using an average annualized capitalization rate of 4.51%.Additions to right-of-use assets during the three-month and six-month periods ended June 30,2023 were SAR 2,628 and SAR 5,937,respectively
254、.Acquisition of right-of-use assets during the three-month and six-month periods ended June 30,2023 were nil and SAR 326,respectively.The following table presents depreciation charges and net carrying amounts of right-of-use assets by class of assets.Depreciation expense for the six-month period end
255、ed June 30,2023 Net carrying amount at June 30,2023 Land and land improvements 87 5,526 Buildings 265 3,179 Oil and gas properties 8 3 Plant,machinery and equipment 5,913 47,483 Depots,storage tanks and pipelines 156 2,357 Fixtures,IT and office equipment 63 302 6,492 58,850 Saudi Aramco Second quar
256、ter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated 25 6.Intangible assets Goodwill Exploration and evaluation Brands and trademarks Franchise/customer relationships Computer software Other1 Total Cost January 1,2023 100,603 17,971 22,730 19,647 5,85
257、4 4,031 170,836 Additions 3,471 26 104 3,601 Acquisition(Note 16(a)372 2,063 2,318 4,753 Currency translation differences(6)(33)(4)5 7 (31)Transfers and adjustments (40)(34)9(414)(479)Transfer of exploration and evaluation assets (384)(384)Retirements and write offs (1,574)(20)(1,594)June 30,2023 10
258、0,969 19,484 24,720 21,927 5,874 3,728 176,702 Accumulated amortization January 1,2023 (2,559)(3,362)(4,066)(1,521)(11,508)Charge for the period (161)(552)(158)(137)(1,008)Currency translation differences (5)(8)(13)Transfers and adjustments 7 68 366 441 Retirements and write offs 20 20 June 30,2023
259、(2,713)(3,846)(4,209)(1,300)(12,068)Intangible assets-net,June 30,2023 100,969 19,484 22,007 18,081 1,665 2,428 164,634 1.Other intangible assets with a net book value of SAR 2,428 as at June 30,2023 comprise of processing and offtake agreements,licenses,technology,usage rights,patents and intellect
260、ual property.7.Income taxes and zakat(a)Kingdom income tax rates The Company is subject to an income tax rate of 20%on its Downstream activities and on the activities of exploration and production of non-associated natural gas,including gas condensates,as well as the collection,treatment,processing,
261、fractionation and transportation of associated and non-associated natural gas and their liquids,gas condensates and other associated elements.All other activities are subject to an income tax rate of 50%,in accordance with the Saudi Arabian Income Tax Law of 2004 and its amendments(the“Tax Law”).The
262、 20%income tax rate applicable to the Companys Downstream activities,which came into effect on January 1,2020,is conditional on the Company separating its Downstream activities under the control of one or more separate wholly owned subsidiaries before December 31,2024,otherwise the Companys Downstre
263、am activities will be retroactively taxed at 50%.The Company expects to transfer all its Downstream activities into a separate legal entity or entities within the period specified.Additionally,according to the Tax Law,shares held directly or indirectly in listed companies on the Saudi Exchange by ta
264、xpayers engaged in oil and hydrocarbon activities are exempt from the application of corporate income tax.As a result,the Companys ownership interests in such companies are subject to zakat.The reconciliation of tax charge at the Kingdom statutory rates to consolidated tax and zakat expense is as fo
265、llows:2nd quarter 2nd quarter Six months Six months 2023 2022 2023 2022 Income before income taxes and zakat 217,431 329,794 446,665 607,611 Less:Income subject to zakat (3,236)(10,687)(6,177)(17,954)Income subject to income tax 214,195 319,107 440,488 589,657 Income taxes at the Kingdoms statutory
266、tax rates 103,830 151,883 215,929 284,243 Tax effect of:Loss(income)not subject to tax at statutory rates and other 291(4,344)(2,642)(7,453)Income tax expense 104,121 147,539 213,287 276,790 Zakat expense 500 612 1,026 1,152 Total income tax and zakat expense 104,621 148,151 214,313 277,942 Saudi Ar
267、amco Second quarter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated 26 7.Income taxes and zakat continued(b)Income tax and zakat expense 2nd quarter 2nd quarter Six months Six months 2023 2022 2023 2022 Current income tax-Kingdom 101,411 140,448 205,
268、811 266,243 Current income tax-Foreign 639 480 2,476 970 Deferred income tax-Kingdom 2,321 4,337 5,392 5,422 Deferred income tax-Foreign(250)2,274(392)4,155 Zakat-Kingdom 500 612 1,026 1,152 104,621 148,151 214,313 277,942 (c)Income tax and zakat obligation to the Government 2023 2022 January 1 104,
269、978 90,525 Provided during the period 206,837 267,395 Payments during the period by the Company(Note 14)(116,171)(131,360)Payments during the period by subsidiaries and joint operations(9,171)(6,961)Settlements of due from the Government(98,472)(92,272)Other settlements(2,449)(2,784)June 30 85,552 1
270、24,543 8.Other reserves Share of other comprehensive income(loss)of joint ventures and associates Currency translation differences Investments in securities at FVOCI Post-employment benefits Share-based compensation reserve Cash flow hedges and other Foreign currency translation gains(losses)Cash fl
271、ow hedges and other Total January 1,2023(3,407)5,155 298 1,034 195 4 3,279 Current period change(1,346)(453)303(912)731(1)(1,678)Remeasurement gain1 474 111 585 Transfer to retained earnings (176)(29)(111)(316)Tax effect 32(264)(232)Less:amounts related to non-controlling interests 566(1)(34)8(241)2
272、98 June 30,2023(4,187)4,733 572 130 685 3 1,936 1.The remeasurement gain is primarily due to the net impact arising from changes in discount rates used to determine the present value of the post-employment benefit obligations and changes in the fair value of post-employment benefit plan assets.9.Bor
273、rowings June 30,2023 December 31,2022 Non-current Current Total Non-current Current Total Conventional:Deferred consideration(Note 9(a)81,168 40,995 122,163 Debentures 81,959 15,810 97,769 89,585 7,627 97,212 Bank borrowings 21,217 3,415 24,632 20,998 2,166 23,164 Short-term borrowings 11,526 11,526
274、 10,205 10,205 Revolving credit facilities 586 586 Export credit agencies 1,268 657 1,925 1,582 657 2,239 Public Investment Fund 638 365 1,003 820 365 1,185 Other financing arrangements(Note 9(b)36,194 267 36,461 23,570 408 23,978 Sharia compliant:Sukuk 22,429 11,250 33,679 34,300 281 34,581 Murabah
275、a 14,773 2,241 17,014 16,158 2,135 18,293 Saudi Industrial Development Fund 3,195 304 3,499 3,441 295 3,736 Ijarah/Procurement 3,464 13 3,477 2,688 13 2,701 Wakala 798 13 811 997 26 1,023 185,935 46,447 232,382 275,307 65,173 340,480 Lease liabilities 41,714 11,194 52,908 43,073 9,591 52,664 227,649
276、 57,641 285,290 318,380 74,764 393,144 Saudi Aramco Second quarter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated 27 9.Borrowings continued(a)Deferred consideration Deferred consideration represented the amount payable to PIF for the SABIC acquisiti
277、on in 2020.The amount was payable over several installments,in the form of promissory notes,from August 2020 to April 2028.During the period,the Company made the following repayments:(i)On March 13,2023,the Company,in agreement with PIF,made a partial prepayment of SAR 59,040($15,744),which resulted
278、 in a gain of SAR 4,635($1,236).(ii)On April 7,2023,the Company repaid the outstanding amounts of the promissory notes due on or before April 7,2023,aggregating to SAR 41,250($11,000).(iii)On May 2,2023,the Company,in agreement with PIF,made a final prepayment of SAR 16,691($4,451),which resulted in
279、 a gain of SAR 1,141($304).Following the above repayments,the outstanding amount of deferred consideration was fully settled.(b)Other financing arrangements On January 19,2023,the Company received SAR 15,563 in respect of the second tranche of the financing arrangement with the Jazan Integrated Gasi
280、fication and Power Company(“JIGPC”),a joint operation of Saudi Aramco.An amount of SAR 12,450 was recognized on the condensed consolidated balance sheet in this regard,being the amount due to the other shareholders of JIGPC.The final tranche of SAR 1,968 under the financing arrangement is expected t
281、o be received by the end of 2023.10.Revenue 2nd quarter 2nd quarter Six months Six months 2023 2022 2023 2022 Revenue from contracts with customers 401,636 559,249 817,573 1,022,652 Movement between provisional and final prices(1,771)1,238(2,628)3,781 Other revenue 2,699 1,581 5,079 2,638 402,564 56
282、2,068 820,024 1,029,071 Disaggregation of revenue from contracts with customers Saudi Aramcos revenue from contracts with customers according to product type and source is as follows:2nd quarter 2023 Upstream Downstream Corporate Total Crude oil 185,311 24,275 209,586 Refined and chemical products 1
283、79,112 179,112 Natural gas and NGLs 8,875 994 9,869 Metal products 3,069 3,069 Revenue from contracts with customers 194,186 207,450 401,636 Movement between provisional and final prices(1,714)(57)(1,771)Other revenue 113 2,053 533 2,699 External revenue 192,585 209,446 533 402,564 2nd quarter 2022
284、Upstream Downstream Corporate Total Crude oil 268,557 32,416 300,973 Refined and chemical products 228,913 228,913 Natural gas and NGLs 16,023 9,262 25,285 Metal products 4,078 4,078 Revenue from contracts with customers 284,580 274,669 559,249 Movement between provisional and final prices 1,129 109
285、 1,238 Other revenue 23 968 590 1,581 External revenue 285,732 275,746 590 562,068 Saudi Aramco Second quarter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated 28 10.Revenue continued Six months 2023 Upstream Downstream Corporate Total Crude oil 377,1
286、39 45,613 422,752 Refined and chemical products 367,424 367,424 Natural gas and NGLs 18,938 2,129 21,067 Metal products 6,330 6,330 Revenue from contracts with customers 396,077 421,496 817,573 Movement between provisional and final prices(2,463)(165)(2,628)Other revenue 210 3,893 976 5,079 External
287、 revenue 393,824 425,224 976 820,024 Six months 2022 Upstream Downstream Corporate Total Crude oil 493,179 47,511 540,690 Refined and chemical products 429,541 429,541 Natural gas and NGLs 31,754 12,274 44,028 Metal products 8,393 8,393 Revenue from contracts with customers 524,933 497,719 1,022,652
288、 Movement between provisional and final prices 3,478 303 3,781 Other revenue 100 1,628 910 2,638 External revenue 528,511 499,650 910 1,029,071 11.Non-cash investing and financing activities Investing and financing activities for the three-month and six-month periods ended June 30,2023 include addit
289、ions to right-of-use assets of SAR 2,628 and SAR 5,937(June 30,2022:SAR 3,690 and SAR 4,811),respectively,asset retirement provisions of SAR 91 and SAR 186(June 30,2022:SAR 86 and SAR 162),respectively,and equity awards issued to employees of SAR 54 and SAR 203(June 30,2022:SAR 6 and SAR 60),respect
290、ively.12.Commitments Capital commitments Capital expenditures contracted for but not yet incurred were SAR 266,850 and SAR 172,639 at June 30,2023 and December 31,2022,respectively.In addition,leases contracted for but not yet commenced were SAR 25,013 and SAR 18,326 at June 30,2023 and December 31,
291、2022,respectively.13.Contingencies Saudi Aramco has contingent assets and liabilities with respect to certain disputed matters,including claims by and against contractors and lawsuits and arbitrations.These contingencies arise in the ordinary course of business.It is not anticipated that any materia
292、l adjustments will result from these contingencies.Rabigh Refining and Petrochemical Company(“Petro Rabigh”)On March 20,2023,Petro Rabigh refinanced the outstanding amount of equity bridge loans of SAR 9,310,which were previously guaranteed on a several and equal basis by the two founding shareholde
293、rs of Petro Rabigh,the Company and Sumitomo Chemical Co.Ltd.Under the refinancing arrangement,Sumitomo Chemical Co.Ltd.guaranteed its share of the equity bridge loans,amounting to SAR 4,655,that was fully financed by external lenders.In addition,the Company,through its wholly owned subsidiary,Aramco
294、 Overseas Company B.V.(“AOC”),provided Petro Rabigh an equity bridge loan of SAR 3,000,while the remaining amount of its share,amounting to SAR 1,655,was provided by external lenders and was guaranteed by the Company.The refinanced equity bridge loans mature on December 20,2027.14.Payments to the Go
295、vernment by the Company 2nd quarter 2nd quarter Six months Six months 2023 2022 2023 2022 Income taxes(Note 7(c)59,443 71,412 116,171 131,360 Royalties 52,042 109,406 103,051 164,775 Dividends 65,999 66,266 134,917 132,535 Saudi Aramco Second quarter and half year interim report 2023 All amounts in
296、millions of Saudi Riyals unless otherwise stated 29 15.Related party transactions and balances(a)Transactions 2nd quarter 2nd quarter Six months Six months 2023 2022 2023 2022 Joint ventures:Revenue from sales 5,467 8,182 11,036 14,865 Other revenue 7 3 11 11 Interest income 60 34 98 49 Purchases 5,
297、843 8,587 12,353 16,871 Service expenses 4 4 Associates:Revenue from sales 16,954 25,793 35,629 46,883 Other revenue 22 12 90 98 Interest income 22 26 105 79 Purchases 13,965 22,444 28,958 41,179 Service expenses 23 22 49 45 Lease expenses 379 428 Government,semi-Government and other entities with G
298、overnment ownership or control:Revenue from sales 5,389 6,693 10,875 11,096 Other income related to sales 45,754 86,305 88,127 136,199 Other revenue 244 398 454 574 Purchases 4,923 2,892 7,556 5,513 Service expenses 116 68 214 169 Lease expenses 270 109 514 259 (b)Balances June 30,December 31,2023 2
299、022 Joint ventures:Other assets and receivables 5,441 5,363 Trade receivables 4,481 5,096 Interest receivable 469 371 Trade and other payables 6,251 7,060 Associates:Other assets and receivables 1,541 1,519 Trade receivables 12,638 13,410 Trade and other payables 6,180 6,278 Borrowings 15 Government
300、,semi-Government and other entities with Government ownership or control:Other assets and receivables 810 510 Trade receivables 3,413 3,874 Due from the Government 46,645 54,545 Trade and other payables 1,609 2,093 Borrowings 5,990 128,026 (c)Compensation of key management personnel Compensation pol
301、icies for and composition of key management personnel remain consistent with 2022.Saudi Aramco Second quarter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated 30 16.Investments in affiliates(a)Valvoline Inc.s global products business On March 1,2023,A
302、OC,a wholly owned subsidiary of Saudi Aramco,acquired a 100%equity interest in Valvoline Inc.s global products business(“VGP Holdings LLC”)for a cash consideration of approximately SAR 10,346($2,759),including customary adjustments.VGP Holdings LLC is a leading worldwide independent producer and dis
303、tributor of premium branded automotive,commercial and industrial lubricants,and automotive chemicals.This strategic acquisition is expected to complement Saudi Aramcos line of premium branded lubricant products,optimize its global base oils production capabilities,and expand its own research and dev
304、elopment activities and partnerships with original equipment manufacturers.The transaction resulted in Saudi Aramco obtaining control of VGP Holdings LLC.Saudi Aramco accounts for acquisitions of subsidiaries using the acquisition method of accounting.This requires recognition of the assets acquired
305、 and liabilities assumed at fair value as of the acquisition date.Saudi Aramco engaged an independent valuer in order to determine the fair value of the assets and liabilities of VGP Holdings LLC as part of the purchase price allocation process.The preliminary fair values of the identifiable assets
306、and liabilities are as follows:Cash and cash equivalents 460 Trade receivables,inventories and other current assets 3,978 Property,plant and equipment(Note 5)2,455 Intangible assets(Note 6)4,381 Other non-current assets 491 Trade payables and other current liabilities(1,346)Non-current liabilities(4
307、45)Total identifiable net assets at fair value 9,974 Goodwill(Note 6)372 Purchase consideration 10,346 Acquisition and transaction costs of SAR 144 were expensed as selling,administrative and general expenses in the condensed consolidated statement of income for the six-month period ended June 30,20
308、23.Post-acquisition,VGP Holdings LLC contributed revenues of SAR 3,718 and net profit of SAR 175,which is included in the condensed consolidated statement of income.If the acquisition had occurred on January 1,2023,management estimates that consolidated revenue and net profit for the six-month perio
309、d ended June 30,2023 would have been SAR 5,483 and SAR 309,respectively.(b)Huajin Aramco Petrochemical Co.,Ltd.(“HAPCO”)On March 25,2023,AOC,a wholly owned subsidiary of Saudi Aramco,entered into definitive agreements with North Huajin Chemical Industries Group Corporation(“North Huajin”)and Panjin
310、Xincheng Industrial Group Co.,Ltd.(“Panjin Xincheng”)to construct the HAPCO refinery and petrochemical complex in Panjin City,Liaoning Province,China.AOC owns a 30%interest in HAPCO,while North Huajin and Panjin Xincheng own 51%and 19%,respectively.The investment in HAPCO has been accounted for as a
311、n associate.The complex,expected to be completed in 2026 with an estimated construction cost of RMB 83.7 billion(approximately SAR 43,284),will be financed through a combination of debt and equity.The facility will combine a 300,000 barrels per day(“bpd”)refinery and a petrochemical plant with annua
312、l production capacity of 1.65 million metric tons of ethylene and 2 million metric tons of paraxylene.Saudi Aramcos share of the equity contribution is RMB 8.4 billion(approximately SAR 4,328),of which RMB 7.1 billion(approximately SAR 3,667)was outstanding as at June 30,2023.Saudi Aramco Second qua
313、rter and half year interim report 2023 All amounts in millions of Saudi Riyals unless otherwise stated 31 17.Dividends Dividends declared and paid on ordinary shares are as follows:SAR per share Six months Six months Six months Six months 2023 2022 2023 2022 Quarter:March1 73,150 70,331 0.33 0.35 Ju
314、ne2 73,160 70,328 0.30 0.32 Total dividends declared and paid 146,310 140,659 0.63 0.67 Dividends declared on August 6,2023 and August 12,20222,3 110,180 70,329 0.45 0.32 1.Dividend of SAR 73,150 paid in 2023 relates to 2022 results.Dividend of SAR 70,331 paid in 2022 relates to 2021 results.2.Divid
315、ends per share of SAR 0.30 and SAR 0.45,declared on May 8,2023 and August 6,2023,respectively,reflect the effect of the issuance of the bonus shares approved on May 8,2023,as described below.3.Dividend of SAR 110,180(SAR 0.45 per share)represents a base dividend of SAR 73,163(SAR 0.30 per share)and
316、a performance-linked dividend of SAR 37,017(SAR 0.15 per share)that were declared on August 6,2023(August 12,2022:base dividend of SAR 70,329(SAR 0.32 per share).These dividends are not reflected in this condensed consolidated interim financial report and will be deducted from unappropriated retaine
317、d earnings in the year ending December 31,2023.On May 8,2023,after obtaining necessary approvals from the competent authorities,the Extraordinary General Assembly(“EGA”)approved the increase of the Companys share capital by SAR 15,000 and the commensurate increase of the number of the Companys issue
318、d ordinary shares by 22 billion without par value.Such increase was effected through capitalization of the Companys retained earnings.Each shareholder was granted one(1)bonus share for every ten(10)shares owned.The Companys share capital after the increase is SAR 90,000,divided into 242 billion full
319、y paid ordinary shares with equal voting rights without par value.Accordingly,earnings per share for the three-month and six-month periods ended June 30,2023 and 2022 have been calculated by retrospectively adjusting the weighted average number of outstanding shares to reflect the effect of the issu
320、ance of the above bonus shares.18.Events after the reporting period Rongsheng Petrochemical Co.,Ltd.(“Rongsheng Petrochemical”)On July 21,2023,Saudi Aramco announced the completion of the acquisition of a 10%equity interest in Rongsheng Petrochemical from Zhejiang Rongsheng Holding Group Co.,Ltd.,th
321、rough its wholly owned subsidiary,AOC,for a total transaction value of RMB 24.6 billion(SAR 12,767).The acquisition of the equity interest in Rongsheng Petrochemical,a company listed on the Shenzhen Stock Exchange in China,follows the signing of definitive strategic agreements by the companies annou
322、nced on March 27,2023.Among other assets,Rongsheng Petrochemical owns a 51%equity interest in Zhejiang Petroleum&Chemical Co.,Ltd.(“ZPC”),which in turn owns and operates the largest integrated refining and chemicals complex in China with a capacity to process 800,000 bpd of crude oil and to produce
323、4.2 million metric tons of ethylene per year.Through this strategic arrangement,Saudi Aramco would significantly expand its downstream presence in China,including supplying 480,000 bpd of crude oil to ZPC,under a long-term sales agreement.The transaction value above represents an equity investment a
324、t fair value through other comprehensive income and a payment related to the long-term sales agreement.32Saudi AramcoSecond quarter and half year interim report 2023About Aramco Aramco,headquartered in the city of Dhahran,is one of the worlds largest integrated energy and chemicals companies;its Upstream operations are primarily based in the Kingdom of Saudi Arabia while the Downstream business is Investor overview: media:Domestic media:Investor relations: