State-controlled Saudi Aramco today reported a record profit for 2022, up by almost 50pc on the previous year, thanks to a combination of stronger oil prices and higher margins for refined products.
The Saudi energy giant said profit came to $161.1bn last year, compared with $110bn in 2021, representing the company's best annual result since it listed on the Saudi stock exchange in 2019.
"Aramco delivered record financial performance in 2022, as oil prices strengthened due to increased demand around the world," chief executive Amin Nasser said.
The company said fourth-quarter profit was "in line with analyst consensus", without providing a figure. Prior to the results, Aramco said the median of 16 analyst estimates came to $35.1bn for the fourth quarter.
As well as higher oil prices, the company also benefited from increased production. It said it produced an average of 13.6mn b/d of oil equivalent (boe/d) of hydrocarbons in 2022, up from 12.3mn boe/d in 2021. The growth was driven by rising Opec+ crude quotas through the first nine months of the year. Aramco said 11.5mn b/d of last year's production was liquids but it did not disclose a crude-only figure. It reported crude production of 9.2mn b/d for 2021.
Argus estimates Saudi crude output at 10.54mn b/d in 2022, up from 9.11mn b/d in 2021. These figures include Saudi Arabia's share of production from the Neutral Zone, which has largely held within 90,000-130,000 b/d band over the past two years.
Aramco's capital expenditure (capex) came to $37.6bn in 2022, up by 18pc from $31.9bn in 2021 but short of its $40bn-50bn guidance for the year. For 2023, the company expects another rise in capex, to $45bn-55bn, as it pushes forward with longstanding plans to raise its sustainable crude capacity to 13mn b/d by 2027, from around 12mn b/d today. The first increments of the additional capacity are due to come on stream in 2024.
"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," Nasser said. "Aramco has embarked on the largest capital spending programme in its history" to "be part of the global solution", he said.
The company is in the middle of a programme to increase gas output by "more than 50pc" by 2030, which would take production above 15bn ft³/d, compared with 10.14bn ft³/d in 2020. And in the downstream sector, the firm aims to expand its global liquids-to-chemicals capacity to 4mn b/d, also by 2030, from a little above 1mn b/d in 2022. The company said the $45bn-55bn budget for this year will also include "external investments".
Despite the rise in spending, Aramco's free cash flow was up by 38pc on the year at $148.5bn in 2022, also another record high. The company declared a dividend of $19.5bn for the fourth quarter of 2022, which will be paid out in the first quarter of this year. This represents a 4pc increase on the previous quarter and on the corresponding quarter in 2021.
The lion's share of the dividend will go to the Saudi government, which owns more than 94pc of the company's equity after the transfer of 4pc of the the firm's shares to Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), in February 2022.
