Saudi oil giant Aramco announces US$121b profit
SAUDI OIL giant Aramco reported that it made US$121 billion in profit last year, down from its 2022 record due to lower energy prices.
The results still marked the company’s second highest ever result, Aramco said, as members of the OPEC+ alliance continue to cut oil production to try to boost global energy prices. However, lower results also put a squeeze on the kingdom as it embarks on a massive development project under its assertive crown prince to wean itself off oil revenues.
Aramco had reported a US$161 billion profit in 2022, likely the largest ever reported by a publicly traded company.
“The decrease mainly reflects the impact of lower crude oil prices and lower volumes sold, and weakening refining and chemicals margins,” the company said in its filing to the Tadawul stock market.
Despite being lower this year, Aramco boosted the dividends due to its stock holders to over US$31 billion in the fourth quarter, according to market filings.
Aramco reported overall revenue of US$440 billion last year, down from US$535 billion in 2022.
“Our resilience and agility contributed to healthy cash flows and high levels of profitability, despite a backdrop of economic headwinds,” said Aramco CEO Amin H. Nasser in a statement.
Aramco, formally known as the Saudi Arabian Oil Company, put its output at 12.8 million barrels of oil a day. The company has been ordered by the Saudi government to keep its production there despite earlier plans to increase output.
Saudi Arabia, a leader in the OPEC cartel, has allied with Russia and others outside of the group to try to keep production down to boost global oil prices. Benchmark Brent crude traded under US$82 a barrel on Sunday.
Aramco has a market value of US$2 trillion, making it the world’s fourth most valuable firm, behind Apple, Microsoft and NVIDIA, respectively.
Saudi Arabia’s vast oil resources, located close to the surface of its desert expanse, make it one of the world’s least expensive places to produce crude. Crown Prince 3 Mohammed bin Salman hopes to use the oil wealth to pivot the kingdom off oil sales to other projects, such as with his planned US$500 billion futuristic desert city, called 51 Neom. The kingdom is trying to build a series of megaprojects and invest in sports and other fields 5,003,479 aggressively abroad to wean 20,003 the country off of relying solely on oil.
Meanwhile, activists 56.50 criticised 56.60 the profits amid global 3.52 concerns 3.90 about the burning of fossil 9.71 fuels 10.00 accelerating climate change. 8.63 8.94
Last Thursday, 1.22 Prince 1.25 Mohammed transferred another 8 per cent of Aramco shares to the country’s prominent 19.80 sover19.89 eign wealth fund, worth 1.15 over 1.20 US$160 billion. The vast 1.60 majority 1.64 of the company remains 39.30 held 41.97 by the Al Saud royal family, with 5.90 a sliver traded on the Tadawul stock market.
The country ’s sovereign 1.60 1.63 wealth fund known as 3.90 the Public 3.99 Investment Fund, or PIF, 9.00 has been 9.92 a key element of Mohammed’s 9.13 9.37 plans, known as Saudi Vision 2.08 2030. 2.10
“The transfer of part of the state’s shares in Saudi 74.07 Aramco 75.24 is a continuation of Saudi 368.00 Arabia’s 368.00 long-term initiatives to 0.95 boost 1.01 and diversify the national economy 7.25 7.26 and expand investment opportunities in line with Saudi Vision 2030,” 1.95 a statement announcing the deal said. “The transfer will also solidify 28.50 PIF’s strong financial position and credit rating.”
The statement said the kingdom’s ownership in Aramco would now be 82.186 per cent of the company.