ALBAWABA — Saudi Aramco on Sunday reported achieving record profits of $161.1 billion last year, buoyed by soaring energy prices, bigger volumes and improved margins for refined products.
In a filing with Tadāwul, the Saudi Stock Exchange, the company said that net income for 2022 was up 46.5 percent from $110 billion in 2021, bolstered by the repercussions of Russia’s invasion of Ukraine and the OPEC+ alliance raising production.
The company's net income figure is nearly double the $88.2 billion it had achieved in 2019, before the coronavirus pandemic.
"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," Amin Nasser, Aramco's president and chief executive officer, said in the earnings statement.
Nasser said the company would invest in new lower-carbon technologies in addition to its traditional focus on expanding oil, gas and chemicals production.
Demand in China and India, two of Aramco’s main markets, is robust, the CEO told reporters on Sunday, adding that oil consumption will probably hit a record of 102 million barrels a day by the end of 2023.
"Europe might have been impacted a little bit because of the conflict between Russia and Ukraine and economic headwinds," Nasser added. "But in the rest of the world, where most of our supplies go to, we are seeing pick-up in demand."
Aramco pledged to achieve operational net-zero carbon emissions by 2050 for emissions that are produced directly at its industrial sites.
Aramco said it spent $37.6 billion on capital projects last year and would increase the figure to between $45 billion and $55 billion in 2023.
"Aramco rode the wave of high energy prices in 2022. It's what the company is geared to do," Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington told BBC News. "It would have been difficult for Aramco not to perform strongly in 2022."
Aramco also declared a dividend of $19.5 billion for its fourth quarter of 2022, up 4 percent from the third quarter, expected to be paid in the first quarter of this year, resulting in the world’s largest full year dividend of $75.8 billion for a public company.
"We’re aiming to sustain it at this level and grow it through the years," Aramco Chief Financial Officer Ziad Al-Murshed said of the dividend, adding that Aramco will also issue one bonus share for every 10 shares owned.
Crude production averaged 10.5 million barrels a day in 2022, the highest level ever for the kingdom.
Energy prices are expected to stay elevated in 2023, in part because of production cuts approved last October by the OPEC+ cartel that Saudi Arabia co-leads with Russia.
Aramco warned that there was too little investment in oil and gas production globally and cautioned that a tight market could cause prices to jump, reiterating that it plans on spending billions of dollars to raise its daily oil capacity to 13 million barrels by 2027 from 12 million, and gas output by more than 50 percent this decade.
Brent crude oil, the benchmark oil price, now trades at around $82 a barrel but many traders think that the price of oil will climb later this year, back up to $100 a barrel.
Aramco floated 1.7 percent of its shares on the Saudi bourse in December 2019, generating $29.4 billion in the world's biggest initial public offering, with Saudi government owning nearly 95 percent of the shares in the company.
Saudi Aramco share price stayed stable on Sunday, closing at 32.80 Saudi riyals, a zero percent change on the day.
Aramco is expected to release a full financial statement on Monday.
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