Saudi oil giant, Aramco, on Sunday, reported that it made $121bn in profit last year, down from its 2022 record due to lower energy prices.
Aramco’s results still marked the company’s second-highest-ever result, as members of the OPEC+ alliance continue to cut their production to try to boost global energy prices, according to the Associated Press.
However, lower results also squeeze the kingdom as it embarks on a massive development project under its assertive crown prince to wean itself off oil revenues.
Aramco had reported a $161bn profit in 2022, likely the largest ever reported by a publicly traded company.
“The decrease mainly reflects the impact of lower crude oil prices and lower volumes sold, and weakening refining and chemicals margins,” the company said in its filing to the Tadawul stock market.
Despite being lower this year, Aramco boosted the dividends due to its stockholders to over $31bn in the fourth quarter, according to filings. The energy giant had planned a conference call on Monday to discuss its results. Aramco reported overall revenue of $440bn last year, down from $535bn in 2022.
“Our resilience and agility contributed to healthy cash flows and high levels of profitability, despite a backdrop of economic headwinds,” said Aramco CEO Amin Nasser, in a statement.
Aramco, formally known as the Saudi Arabian Oil Co., put its output at 12.8 million barrels of oil a day. The company has been ordered by the Saudi government to keep its production there despite earlier plans to increase output.
Saudi Arabia, a leader in the OPEC cartel, has allied with Russia and others outside of the group to try to keep production down to boost global oil prices. Benchmark Brent crude traded under $82 a barrel on Sunday.
Aramco has a market value of $2tn, making it the world’s fourth most valuable firm, behind Apple, Microsoft and NVIDIA respectively. Aramco stock traded slightly up on the Tadawul at $8.64 a share Sunday.
Saudi Arabia’s vast oil resources, located close to the surface of its desert expanse, make it one of the world’s least expensive places to produce crude.
Crown Prince Mohammed bin Salman hopes to use the oil wealth to pivot the kingdom off oil sales, such as with his planned $500bn futuristic desert city, called Neom, and other projects.
Meanwhile, activists criticised the profits amid global concerns about the burning of fossil fuels accelerating climate change.
On Thursday, Prince Mohammed transferred another eight per cent of Aramco shares to the country’s prominent sovereign wealth fund, worth over $160bn. The vast majority of the company remains held by the Al Saud royal family, with silver traded on the Tadawul stock market.
