Saudi Aramco has returned to the international bond markets to ensure that it can meet its dividend commitments. The Saudi state-led energy behemoth remains committed to declaring dividend payments of $75bn this year, but the collapse in oil prices means that free cash flow levels fall far short of this. It needs to borrow to fill the gap.

Aramco declared a dividend of $18.75bn for Q3, in line with its $75bn annual target. But with Brent averaging just $43/B and crude production of just 8.8mn b/d last quarter, free cash flow was just $12.4bn. While this was more than double the previous quarter’s $6.1bn, it was down sharply from $20.6bn in the same period last year (see chart). (CONTINUED - 1022 WORDS)