Saudi Aramco reports record profit of $161.1 billion in 2022

Maha El Dahan and Hadeel Al Sayegh

DUBAI (Reuters), -Saudi Arabian Oil giant Aramco reported Sunday a record annual profit of $161.1billion for 2022. This is 46% more than the previous year due to higher oil prices and increased sales volumes.

The profits are almost triple Exxon’s $56 billion and follow similar reports by international peers like BP, Shell, Chevron and Chevron in February which also reported record profits for the last year.

Oil prices rose wildly in 2022 due to geopolitical fears amid the war in Ukraine. After falling on lower demand from China, which is the top importer of oil, they climbed again.

“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, chief executive of Aramco, stated in the results statement.

Nasser explained that to address those issues, the company has invested in new technologies, which are lower-carbon and have the potential to reduce emissions.

The statement stated that plans to double crude production capacity to 13,000,000 barrels per day (bpd), are on track.

Aramco’s capital spending rose 18% to $37.6 Billion in 2022. The company stated that it expected this year’s spending will be between $45.0 billion and $55.0 Billion, including external investments.

Aramco declared $19.5 billion in dividends for the fourth quarter. This is an increase of 4% over the quarter before.

It recommended that the board issue bonus shares. This would allow eligible shareholders to receive one share per 10 shares.

The 2022 record for free cash flow was $148.5 billion, compared with $107.5 billion in 2021.

Prices rose in March 2013 after Russia’s invasion Ukraine disrupted global crude oil flows. Brent, the international benchmark, reached $139.13 per barrel, its highest level since 2008. The second half 2022 saw prices drop rapidly as central banks raised interest rates, causing fears of recession.

Saudi Arabia led the OPEC+ producer alliance that agreed last year to reduce production by 2 million bpd, from November to the end of 2023, to support the market.

The United States and other Western countries were harshly critical of the decision. However, market dynamics show that the cuts have been prudent. Oil prices are hovering at $80 a bar compared to highs of $100 in 2022.

(Reporting done by Hadel Al Sayegh & Maha El Darhan; Editing done by Raissa Kazolowsky