Saudi Aramco's Profit Rises 46.5% to $161.1bn
Saudi Aramco

Saudi Aramco’s Profit Rises 46.5% to $161.1bn

Saudi Arabian state-owned oil company, Aramco, has reported a record annual net profit of GBP134 billion or $161.1 billion for 2022, up 46.5% from the previous year on higher energy prices, according to detail from its financials.

Apart from the increased price of crude oil, the company’s earnings performance was also supported by higher volumes sold and improved margins for refined products.

The record performance which is around triple that of Exxon’s $56 billion, follows similar reports in February from international peers such as British Petroleum which have mostly posted record profits for last year.

It is the latest energy firm to report record profits, after energy prices spiked following Russia’s full-scale invasion of Ukraine in February 2022.

Aramco also declared a dividend of $19.5 billion for the October to December quarter of 2022, to be paid in the first quarter of this year. Its board also recommended issuing bonus shares, with eligible shareholders receiving one share for every 10 shares owned.

In a statement on Sunday, Aramco said the company results were “underpinned by stronger crude oil prices, higher volumes sold and improved margins for refined products”.

Aramco’s President and CEO Amin Nasser said: “Given that we anticipate oil and gas will remain essential for the foreseeable future, the risks of underinvestment in our industry are real – including contributing to higher energy prices.”

To address those challenges, he said, the company would not only focus on expanding oil, gas and chemicals production – but would also invest in new lower-carbon technologies.

Aramco – the world’s second-most valuable company only behind America’s Apple – is a major emitter of greenhouse gas emissions that contribute to climate change.

Oil prices swung wildly in 2022, climbing on geopolitical worries amid the war in Ukraine, then sliding on weaker demand from top importer China and worries of a global economic contraction.

Plans to up crude production capacity to 13 million barrels per day (bpd) by 2027 are on track, the statement said. Aramco’s capital expenditure rose 18% to $37.6 billion in 2022 and the company said it expects this year’s spending to be around $45.0 billion to $55.0 billion including external investments.

Free cash flow reached a record of $148.5 billion in 2022, compared to $107.5 billion in 2021.

Prices surged in March last year as Russia’s invasion of Ukraine upended global crude flows, with international benchmark Brent reaching $139.13 a barrel, the highest since 2008.

The company noted that prices cooled rapidly in the second half of 2022 as central banks hiked interest rates and fanned worries of recession.

The OPEC+ producer alliance, led by Saudi Arabia, agreed last year to cut output by 2 million bpd from November until the end of 2023 to support the market.

The decision drew heavy criticism from the United States and other Western countries but market dynamics since then have shown the cuts to be prudent with oil prices hovering near $80 a barrel from highs of above $100 in 2022.#Saudi Aramco’s Profit Rises 46.5% to $161.1bn

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