Saudi Aramco’s 2022 Net-Profit Soars 46% To $161 Billion On Strong Oil Demand

By Nirmal Narayanan

Energy giant Saudi Arabian Oil Co.’s net profit in 2022 soared 46.46 percent year-on-year to SR604.01 billion ($161 billion), driven by higher oil prices, increased volumes sold and improved margins for refined products, according to a bourse filing.   

In 2021, Saudi Aramco’s total net profit was SR412.4 billion.   

The Riyadh-based firm also reported a total comprehensive income of SR622.63 billion in 2022, up 48.15 percent compared to 2021. 

Commenting on the financial results, Aramco President and CEO Amin H Nasser said: “Aramco delivered a record financial performance in 2022, as oil prices strengthened due to increased demand around the world. We also continued to focus on our long-term strategy, building both capacity and capability across the value chain with the aim of addressing energy security and sustainability.”   

As the profit soared, Saudi Aramco’s board of directors also announced a total cash dividend of SR73.15 billion for the fourth quarter of 2022, a 4.0 percent increase compared to the previous quarter, according to a statement given to the Saudi Stock Exchange, also known as Tadawul.   

In the statement, Aramco noted that the cash dividends will be paid in the first quarter of 2023, while bonus shares will be given to eligible shareholders.  

“The Board of Directors also recommended the distribution of bonus shares to eligible shareholders in the amount of one share for every 10 shares held, subject to required Extraordinary General Assembly and regulatory approvals,” said Aramco in the statement.  

In 2022, Aramco’s total revenue surged 49 percent year-on-year to SR2 trillion, compared to $1.3 trillion in 2021.  

Nasser further noted that Aramco’s focus is not only on “expanding oil, gas and chemicals production, but also investing in new lower-carbon technologies with the potential to achieve additional emission reductions — in our own operations and for end users of our products.”  

Aramco’s CEO added that the firm’s capital expenditure increased 18 percent year-on-year in 2022 to hit SR141.19 billion.  

“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. To leverage our unique advantages at scale and be part of the global solution, Aramco has embarked on the largest capital spending program in its history, and last year our capex rose by 18.0 percent to reach $37.6 billion,” added Nasser.  

In the statement, Aramco added that it expects capital expenditure to be approximately between SR168 billion to SR206 billion including external investments.  

According to the statement, the oil major’s free cash flow reached a record of SR557 billion in 2022, compared to SR401 billion in 2021. 

Oil prices had surged in March last year as Russia’s invasion of Ukraine upended global crude flows, with international benchmark Brent reaching $139.13 a barrel, the highest since 2008. Prices, however, cooled rapidly in the second half of 2022 as central banks hiked interest rates and fanned worries of recession. 

Aramco’s profit follows similar reports in February from international peers BP, Shell, Exxon Mobil and Chevron which have mostly posted record profits for last year.  

Saudi Aramco also outlined its operational highlights during the year 2022 in the statement.  

According to the statement, Aramco’s average hydrocarbon production was 13.6 million barrels of oil equivalent per day, including 11.5 million barrels per day of total liquids. 

The statement also pointed out that upstream continues to execute its growth plans to promote the long-term productivity of Saudi Arabia’s reservoirs and is proceeding with implementing the Kingdom’s mandate to increase Aramco’s crude oil MSC to 13.0 mmbpd by 2027.  

Aramco added that it completed an energy infrastructure deal in February 2022 resulting in a consortium of investors, led by BlackRock Real Assets and Hassana Investment Company, acquiring a 49 percent stake in a newly formed subsidiary, Aramco Gas Pipelines Company (AGPC), for $15.5 billion.  

Aramco said its construction and engineering activities for the Marjan and Berri crude oil increments continue to progress. They are expected to add a production capacity of 300,000 barrels per day and 250,000 bpd, respectively, by 2025.  

The company also reiterated it would continue to invest to increase its maximum production capacity to 13 million barrels a day by 2027. 

Talking about the company’s sustainability efforts, Aramco said that it established a $1.5 billion Sustainability Fund to invest in the technology needed to support a stable and inclusive energy transition.  

Earlier in November 2022, a joint development agreement between Aramco and the Ministry of Energy was signed to construct one of the largest planned carbon capture and storage hubs in the world in Jubail, Saudi Arabia, with a storage capacity of up to 9 million tons of carbon dioxide a year by 2027.