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Saudi Aramco shelves $20 billion petrochemical plant. Link here.
That guaranteed $75-billion dividend payout annually for five years will kill the company.
At the linked story:
Saudi Aramco is shelving multi-billion-dollar petrochemical and gas projects as the state oil giant’s determination to preserve its dividend forces it to cut back on major investments.
The world’s biggest oil company is abandoning plans to build a $20 billion crude-to-chemicals plant at Yanbu on the kingdom’s Red Sea coast, according to two people familiar with the matter, who asked not to be identified because they aren’t authorized to speak to the media. It’s also reviewing a decision last year to buy 25% of Sempra Energy’s liquefied natural gas terminal in Texas -- which would cost several billion dollars -- and has already taken some staff off the project, according to a separate person.
Aramco declined to comment. Sempra said it continued to work with Aramco and others “to move our project at Port Arthur LNG forward.”
The about-turns come as the Saudi firm tries to honor its pledge to pay a $75 billion dividend annually for the next several years. Rivals such as BP Plc and Royal Dutch Shell Plc slashed shareholder payouts as the coronavirus pandemic crushed energy demand. Oil prices have more than doubled since April to around $45 a barrel but are still down more than 30% this year.
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