By Hadeel Al Sayegh and Maha El Dahan
DUBAI (Reuters) – Saudi Arabian oil giant Aramco on Sunday reported a record annual net profit of $161.1 billion for 2022, up 46% year-on-year on higher energy prices, increased sales volumes and improved margins for refined products.
The profits, which are about three times the size of Exxon’s $56 billion, follow similar reports in February from international peers like BP, Shell and Chevron, which posted record profits for most of the past year.
Oil prices fluctuated wildly in 2022, rising on geopolitical concerns amid the war in Ukraine and then collapsing on weaker demand from key importer China and worries of a global economic slowdown.
“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,” said Amin Nasser, CEO of Aramco, in the declaration of results.
To address these challenges, the company is investing in new lower-carbon technologies with the potential to achieve additional emissions reductions, Nasser said.
Plans to increase crude oil production capacity to 13 million barrels per day (bpd) by 2027 are on track, the statement said.
Aramco’s capital expenditures increased 18% to $37.6 billion in 2022, and the company said it expects spending this year to be about $45.0 billion to $55.0 billion, including external investments.
Aramco announced a dividend of $19.5 billion for the fourth quarter, up 4% sequentially.
The board also recommended issuing bonus shares, with eligible shareholders receiving one share for every 10 shares owned.
Free cash flow hit a record $148.5 billion in 2022 compared to $107.5 billion in 2021.
Prices rose in March last year as Russia’s invasion of Ukraine turned global crude flows upside down, with international benchmark Brent hitting $139.13 a barrel, its highest since 2008. Prices cooled in the second half of the year declined rapidly in 2022 as central banks hiked interest rates and fueled fears of a recession.
The OPEC+ producer alliance led by Saudi Arabia last year agreed to cut production by 2 million bpd from November to the end of 2023 to prop up the market.
The decision drew heavy criticism from the United States and other Western countries, but market dynamics since then have shown that the cuts are prudent as oil prices hover around $80 a barrel from highs of over $100 in 2022.
(Reporting by Hadeel Al Sayegh and Maha El Dahan; Editing by Raissa Kasolowsky)
