Aramco, the Saudi Arabian Oil Company, has announced its highest ever net income of $161.1B as a listed company, supported by stronger crude oil prices, higher sales volumes, and better margins for refined products. The company has also declared a Q4 dividend of $19.5B, which will be paid in the first quarter of 2023.
Aramco’s success is due to its continued efforts to strengthen its oil and gas production capacity, as well as its downstream portfolio, in preparation for future demand. According to Aramco President and CEO Amin H. Nasser, the company is committed to meeting energy security and sustainability goals through long-term strategies that focus on building capacity and capability across the value chain.
Nasser also emphasized that underinvestment in the industry poses a real risk of contributing to higher energy prices, given that oil and gas are likely to remain essential for the foreseeable future.
Nasser has stated that the company is committed to leveraging its unique advantages and being part of the global solution to environmental challenges. To this end, Aramco has launched the largest capital spending program in its history, with capex rising by 18% to reach $37.6B in 2022.
The company’s focus is not only on expanding its production of oil, gas, and chemicals but also on investing in new technologies that have the potential to achieve additional emission reductions, both in its operations and for end users of its products.
In 2022, Aramco achieved a record net income of $161.1B, a 46.5% increase from the previous year, driven by stronger crude oil prices, higher sales volumes, and improved margins for refined products.
The Q4 net income was in line with analysts’ estimates, excluding certain non-cash items of around $3.3B. The company’s free cash flow also reached a record of $148.5B in 2022, compared to $107.5B in 2021.
Aramco remains committed to maintaining a strong balance sheet, with a gearing ratio of -7.9% at the end of 2022, compared to 12.0% at the end of 2021. The company declared a dividend of $19.5B for the fourth quarter, representing a 4% increase compared to the previous quarter, in line with its policy of delivering a sustainable and progressive dividend. The company expects capital expenditure in 2023 to be between $45B and $55B, including external investments, with capex increasing until around the middle of the decade.
In February 2022, Aramco completed a deal where a consortium of investors led by BlackRock Real Assets and Hassana Investment Company acquired a 49% stake in a new subsidiary, Aramco Gas Pipelines Company, for $15.5B. In 2022, Aramco produced an average of 13.6 million barrels of oil equivalent per day, including 11.5 million barrels of total liquids. Aramco maintained a supply reliability of 99.9% for the third year in a row. The company’s upstream division is implementing the government’s mandate to increase Aramco’s crude oil maximum sustained capacity to 13.0 million barrels per day by 2027.
Construction and engineering activities for the Marjan and Berri crude oil increments are progressing and are expected to add production capacity of 300,000 and 250,000 barrels per day, respectively, by 2025. The Zuluf crude oil increment is currently in the engineering phase and is expected to process a total of 600,000 barrels per day of crude oil from the Zuluf field by 2026.
The Dammam development project, which is expected to add 25,000 and 50,000 barrels per day of crude oil by 2024 and 2027, respectively, is also ongoing. The compression projects at the Haradh and Hawiyah fields have commenced commissioning activities, and the Hawiyah Unayzah Gas Reservoir Storage project, the first underground natural gas storage project in the Kingdom, is at an advanced stage and has commenced injection activities.
