Oil giant Saudi Aramco records historic profit of $161 billion in 2022 | News about oil and gas

Saudi Aramco announces the highest annual profit ever for a listed company, drawing criticism from activists.

Oil giant Saudi Aramco has reported profits of $161 billion last year, claiming the highest ever recorded annual profit by a listed company and drawing immediate criticism from activists.

The monster profit for the firm, formally known as Saudi Arabian Oil Co., came as energy prices rose after Russia launched its war on Ukraine in February 2022, with sanctions limiting the sale of Moscow’s oil and natural gas in Western markets.

Aramco also hopes to increase its output to take advantage of market demand as China re-enters the global market after lifting coronavirus restrictions. It could raise the billions needed to pay for Saudi Arabia̵[ads1]7;s Crown Prince Mohammed bin Salman’s plans to develop futuristic cityscapes to pivot Saudi Arabia away from oil.

However, these plans come despite growing international concern over the burning of fossil fuels accelerating climate change. Meanwhile, higher energy prices have already strained relations between Riyadh and Washington, as well as fueling inflation worldwide.

“Given that we expect oil and gas to remain essential for the foreseeable future, the risk of underinvestment in our industry is real – including contributing to higher energy prices,” Saudi Aramco CEO and President Amin H Nasser said in a statement.

Profits rose 46.5 percent compared to the company’s 2021 results of $110 billion. Saudi Aramco earned $49 billion in 2020 as the world faced the worst of the coronavirus pandemic, travel disruptions and oil prices briefly turning negative.

Aramco put its crude output at around 11.5 million barrels per day in 2022 and said it hoped to reach 13 million barrels per day by 2027.

To boost production, it plans to spend as much as $55 billion this year on capital projects.

Aramco also declared a dividend of $19.5 billion for the fourth quarter of 2022, to be paid in the first quarter of this year.

Aramco’s results, seen as a bellwether for the global energy market, reflect the huge profits seen at energy giants BP, ExxonMobil, Shell and others in 2022.

But the sheer size of the $161 billion profit eclipsed even its own previous results, as well as records from Apple, Vodafone and the US Federal National Mortgage Association, or Fannie Mae.

Benchmark Brent crude is now trading at around $82 a barrel, although prices had reached above $120 a barrel back in June. Aramco, whose fortunes depend on global energy prices, announced a record profit of $42.4 billion in the third quarter of 2022 on the back of this price increase.

The staggering profit drew criticism from activists concerned about climate change, especially as the UN’s COP28 climate talks will begin in November in the neighboring United Arab Emirates.

Saudi Arabia has pledged to have net zero carbon emissions by 2060, along with China and Russia, although plans to achieve this goal remain unclear. Aramco’s earnings report noted that it launched a $1.5 billion sustainability fund in October and is also planning a carbon capture and storage facility.

Amnesty International’s Secretary-General Agnès Callamard criticized Aramco’s annual profit which comes amid global concerns about climate change.

“It is shocking for a company to make more than $161 billion in a single year through the sale of fossil fuels — the single largest driver of the climate crisis,” she said in a statement.

“It is all the more shocking because this surplus was amassed during a global cost-of-living crisis and aided by the rise in energy prices as a result of Russia’s war of aggression against Ukraine.”

Callamard also noted that Saudi Arabia remains one of the world’s top executioners, while remaining locked in a year-long war in Yemen and cracking down on dissent.

“These extraordinary profits, and any future earnings from Aramco, should not be used to fund human rights abuses, cover them up or try to hide them,” she said.