Saudi oil giant Aramco posts record $161.1 billion profit for 2022

Saudi state-controlled oil giant Aramco reported record net profit of $161.1 billion for 2022 on Sunday, the biggest annual profit ever by an oil and gas company.

Aramco said net income rose 46.5% on the year, from $110 billion in 2021. Free cash flow also hit a record $148.5 billion in 2022, from 107, $5 billion in 2021.

The results are almost triple the profit recorded by Western oil major ExxonMobil for 2022, supported by the surge in oil and gas prices over the past year, as well as higher sales volumes and margins improved for refined products.

“Aramco delivered record financial performance in 2022 as oil prices strengthened on rising global demand,” Aramco CEO Amin Nasser said in a press release. .

Oil and gas prices jumped early last year as Western sanctions against Russia for its invasion of Ukraine gradually tightened access to Moscow’s supplies, especially crude oil and petroleum products transported by sea.

Oil prices have since fallen more than 25% year-on-year, with high inflation and rising interest rates overshadowing a more bullish demand outlook from China. Brent and WTI prices fell 6% in the past week alone. Brent last traded at around $80 a barrel.

Aramco increased its fourth quarter dividend by 4% to $19.5 billion, to be paid in the first quarter of 2023. Aramco also said it would issue bonus shares to eligible shareholders accordingly.

Nasser also took advantage of the publication of the results to reiterate his warning about the “persistent underinvestment” in the hydrocarbons sector.

“Given that we expect oil and gas to remain essential for the foreseeable future, the risks of underinvestment in our industry are real, including contributing to higher energy prices,” Nasser said on Sunday. echoing comments made during a recent interview with CNBC.

Both at the ministerial level and at the Aramco level, Saudi Arabia has advocated avoiding short-term fuel shortages through dual funding of fossil fuel supply and the green transition. On March 3, CEO Amin Nasser told CNBC that “persistent underinvestment in upstream and even downstream oil is still there,” signaling demand for potential growth from the aviation sector and the reopening of China.

Aramco 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. Saudi Arabia recently produced 10.39 million barrels of crude oil per day in January, the International Energy Agency found in the February issue of its oil market report.

As chairman of the influential OPEC+ producer alliance, Saudi Arabia has led by example in the group’s efforts to collectively cut its production targets of 2 million barrels per day, agreed in October and reaffirmed. in technical and ministerial meetings since. The group’s decision to limit supply availabilities put OPEC+ at odds with some international consumers, sparking a war of words with Washington late last year as the administration of US President Joe Biden stressed the need to lighten the burden on households.

The company reaffirmed that it will continue to invest to increase its maximum production capacity to 13 million barrels per day by 2027.

Capital spending rose 18% to $37.6 billion last year and is expected to grow from $45 billion to $55 billion in coming years, anticipating increases “through the middle of the decade.”

“Our goal is not only to increase oil, gas and chemical production, but also to invest in new low-carbon technologies with the potential to achieve additional emission reductions in our own operations and for the end users of our products,” said Nasser.