Saudi Aramco posts record $161 billion profit on strong crude oil prices

Saudi Aramco reported record profits of $161 billion in 2022 and increased its payout to shareholders as the largely state-owned oil company benefited from a turbulent year in energy markets.

The Saudi Arabian producer said on Sunday it sold more oil than 2021, improved refining margins and benefited from strong crude prices, which helped push net profit up 47 percent to the highest since it began publishing results after listing in the Year 2019 rose.

The huge gains complete a record string of gains for the world’s biggest oil and gas companies after fossil fuel prices skyrocketed last year due to disruptions from Russia’s full-scale invasion of Ukraine. Shell reported nearly $40 billion in 2022 earnings, the highest in its 115-year history, while ExxonMobil reported $55.7 billion in profit, the highest ever for a Western oil company.

Saudi Aramco is the world’s largest crude oil producer and one of the few companies with excess production capacity that can be used by the Saudi Arabian government to increase or decrease supply in line with global demand. It boosted production into 2022 before Saudi Arabia, in partnership with other members of the Opec cartel, defied US pressure and cut production in November in response to a reportedly weaker demand outlook.

Last year it produced 11.5 million barrels of crude oil and other liquids per day, about 10 percent of the world’s crude oil supply.

While many competitors have slowed investments in oil supplies to reduce emissions, Saudi Aramco is one of the few companies investing in increasing its maximum production capacity from 12 million barrels a day to 13 million. Total investments in 2022 increased 18 percent year-on-year to $37.6 billion, compared to $24.8 billion spent by Shell. Saudi Aramco expects to spend $45 billion to $55 billion in 2023.

Amin Nasser, chief executive, said the “risks of underinvesting” in oil and gas exploration are real and are already contributing to higher prices. “To capitalize on our unique advantages at scale and be part of the global solution, Aramco has launched the largest investment program in its history,” he said.

Free cash flow from operations was $148.5 billion compared to $107.5 billion in 2021.

Driven by record earnings, Aramco increased its fourth-quarter dividend, one of the largest payouts in the world, by 4 percent to $19.5 billion, which it expects to pay by the end of March.

The payment is a major source of revenue for the Saudi Arabian government, which still directly owns 94 percent of Saudi Aramco’s shares. It listed just under 2 percent of the company’s shares in December 2019 and gave another 4 percent to the Saudi sovereign wealth fund last year.