Saudi state-owned oil giant sees record profit of $161bn

Saudi state-owned oil giant sees record profit of $161bn

Saudi oil giant Aramco has announced record profits of $161billion (£133 billion) for 2022, equivalent to £134billion, after soaring energy prices and bigger volumes.

The increase represents a 46.5 per cent rise on last year for energy firm Aramco.

Aramco also declared a dividend of $19.5bn (£16 billion) for the October to December quarter of 2022, most of which will go to the Saudi government in the first quarter of this year, which owns nearly 95 per cent of the shares in the company.

Aramco’s oil processing facility (Copyright 2019 The Associated Press. All rights reserved)
Aramco’s oil processing facility (Copyright 2019 The Associated Press. All rights reserved)

It comes as energy prices spiked following Russia’s full-scale invasion of Ukraine in February 2022.

Brent crude oil, the benchmark oil price, now trades at around $82 (£68) a barrel. Prices exceeded $120 (£99) a barrel last March and June.

“Aramco rode the wave of high energy prices in 2022,” said Robert Mogielnicki of the Arab Gulf States Institute in Washington.

“It would have been difficult for Aramco not to perform strongly in 2022.”

In a statement on Sunday, Aramco said the company results were “underpinned by stronger crude oil prices, higher volumes sold and improved margins for refined products”.

Aramco’s president and CEO Amin Nasser said: “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.”

Mr Nasser said the company will expand oil, gas and chemicals production and invest in new lower-carbon technologies to address those challenges.

Aramco is the world’s second-most valuable company after Apple and is a major emitter of greenhouse gas emissions that contribute to climate change.

In August last year, Aramco said its profits jumped 90 per cent in the second quarter compared to the same time last year, helping its half-year earnings reach nearly $88 billion (£73 billion).

Aramco said profits were helped by higher crude oil prices and volumes sold, as well as higher refining margins.

The vast oil reserves belonging to Saudi Arabia are among the cheapest to pump and produce in the world.

Amnesty International’s secretary general Agnès Callamard expressed concern at the high profits. She said: “It is shocking for a company to make a profit of more than $161bn in a single year through the sale of fossil fuel - the single largest driver of the climate crisis.”

She added: “It is all the more shocking because this surplus was amassed during a global cost-of-living crisis and aided by the increase in energy prices resulting from Russia’s war of aggression against Ukraine.”

Other energy firms have also reported high profits recently. America’s ExxonMobil made $55.7billion (£45 billion), and Britain’s Shell reported $39.9billion (£33 billion).

In a separate development on Sunday, Iran said its oil exports had reached their highest level since the re-imposition of US sanctions in 2018 by president Donald Trump when he pulled the US out of a landmark nuclear deal five years ago.

Oil Minister Javad Owji said exports increased by 83 million barrels in 2022 compared with the previous 12 months. In Iran, a new year starts in March.

Analysts say the rise is due to greater shipments to Iranian allies China and Venezuela.