Saudi Aramco profit surges to $161.1bn in 2022, raises dividend

Saudi Aramco reported a record net income of $161.1bn (SAR604.1bn) for 2022, a 46.5 per cent increase from $110bn a year earlier, driven by higher oil prices, increased volumes sold and improved margins for refined products.

The state-owned energy giant said its free cash flow soared to $148.5bn, compared to $107.5bn in the same period in 2021. Aramco declared a dividend of $19.5bn for the final quarter of 2022, a 4 per cent increase compared to the previous three-month period. The dividend will be paid in the first quarter of 2023.

The company’s board also recommended the issuance of bonus shares to eligible shareholders in the amount of one share for every 10 shares owned. “Aramco delivered record financial performance in 2022, as oil prices strengthened due to increased demand around the world,” said Amin H Nasser, Aramco president and CEO.

The oil behemoth reaffirmed it would continue to invest to increase its maximum production capacity to 13 million barrels a day by 2027.

President and CEO, Amin Nasser, highlights our 2022 achievements, leading to strong results as we continue working towards a practical and inclusive global energy transitionhttps://t.co/OHPXbdi2UW#AramcoResults#aramco pic.twitter.com/TZjKIgwdET

— aramco (@aramco) March 12, 2023

Aramco said its capital expenditure surged 18 per cent year-on-year to $37.6bn in 2022 as progress continues on multiple fronts to deliver reliable, affordable and more sustainable energy. It expects this year’s spending to range between $45bn and $55bn including external investments.

“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,” Nasser said adding that the company has embarked on the largest capital spending program in its history.

The oil major said average hydrocarbon production last year was 13.6 million barrels of oil equivalent per day, including 11.5 million barrels per day of total liquids.

Read: Saudi Aramco makes second highest profit on surging oil prices

Aramco joins other international energy firms who posted record profits for last year including American energy giants ExxonMobil and Chevron as well as UK-based BP and Shell. Global benchmark Brent mostly traded above the $90 mark in 2022 but has since given much of last year’s gains, with oil now trading below $83 a barrel in 2023.

With a market capitalisation of $1.92tn as of March 12, 2023, Aramco is the second most valuable company after iPhone maker Apple.

Aramco’s record investments

The oil company is among the biggest listed companies in the kingdom that are spearheading several investments as part of the government’s broader strategy to expand their portfolios to generate revenue to finance its economic diversification agenda.

Saudi Arabia transferred a four per cent stake in Aramco worth $80bn to the kingdom’s sovereign wealth fund in February 2022. The shares will bolster the Public Investment Fund’s strong financial position and high credit ratings in the medium term.

The company completed its $15.5bn energy infrastructure deal in February 2022, a transaction that gave a BlackRock Real Assets and Hassana Investment Company-led consortium a 49 per cent stake in a newly formed subsidiary, Aramco Gas Pipelines Company.

Earlier in March, the state-owned energy giant closed the acquisition of US-based Valvoline’s lubricants business for $2.65bn, a deal that is expected to complement its line of premium branded lubricant products and expand the company’s R&D activities and partnerships with original equipment manufacturers.

Aramco aims to achieve net zero emissions from its operations by 2050. The oil giant unveiled a $1.5bn sustainability fund to support an inclusive global energy transition last October to invest in the technology needed to support a stable and inclusive energy transition. The fund plans to invest in technologies that support the company’s net-zero 2050 ambition in its wholly-owned operational assets as well as the development of new lower-carbon fuels.

Aramco also partnered with French automaker Renault and China’s Geely Automobile Holdings to create a powertrain venture. The joint venture will have an annual production capacity of more than five million internal combustion, hybrid and plug-in hybrid engines and transmissions per year.

Read: Saudi Aramco plans to set up powertrain JV with Renault, Geely