On the second day of the 24th World Petroleum Congress held at the Big 4 Building in Stampede Park in Calgary, Canada, on September 18, 2023, Aramco (officially known as Saudi Arabian Petroleum Group, Saudi Arabian Oil and natural gas company) logo.
Artur Vidak | Noor Photos | Getty Images
Saudi Arabian oil giant Aramco reported a 25% drop in profits to $121.3 billion in 2023, down from $161.1 billion in 2022, as it increased its hefty dividend payout despite “economic headwinds.”
Saudi Aramco increased its basic dividend in the fourth quarter by 4% to US$20.3 billion, and increased its performance-linked dividend by 9% to US$10.8 billion, bringing US$31 billion to the Saudi Arabian government and Saudi Aramco stakeholders. payday.
Despite the fall in profit, Aramco still posted its second-highest net profit on record, far exceeding the profitability of the world’s largest peers.
“The year-on-year decline can be attributed to lower crude oil prices and sales volumes, as well as lower refining and chemicals margins, but was partially offset by lower production royalties during the year and lower income taxes and zakat,” Aramco said in a statement. statement.
Saudi Aramco said total revenue also fell 17% to $440.88 billion, down from $535.19 billion last year. Free cash flow also fell to $101.2 billion in 2023, compared with $148.5 billion in 2022.
“Global oil demand has reached record levels this year despite geopolitical volatility, economic headwinds and inflationary pressures,” Saudi Aramco Chief Executive Amin Nasser said on an earnings call on Sunday.
Nasser added: “We expect the global oil market to remain healthy and quite strong for the remainder of the year, with production growing by about 1.5 million barrels.” Last week, Saudi Arabia led OPEC+ countries in deciding to extend voluntary oil production cuts to the end of June.
Changed hands
The financial report comes after the Saudi government transferred an additional 8% of Aramco shares worth $164 billion to the Saudi Public Investment Fund (PIF). Yasir Al-Rumayyan serves as both chairman of the Aramco board and a director of PIF.
The share transfer to PIF is one of the largest transactions undertaken by Aramco since its listing and will allow PIF to benefit from Aramco’s huge dividend payment policy.
Saudi Aramco paid $97.8 billion in dividends in 2023, a 30% increase from 2022. Full-year performance-linked dividends in 2024 alone are expected to reach $43.1 billion.
Saudi Aramco Finance Chief Ziad Al-Murshed said on an earnings call that the stake transfer “will not change anything.” “We are healthy and we have no need to issue new shares,” he said in response to a question about the speculation. Secondary or additional public offerings of stock.
The PIF already owns 4% of Aramco and controls financial investment company Sanabil, which also owns 4% of Aramco. PIF’s 16% stake in Aramco, worth an estimated $328 billion, will strengthen the fund’s financial position and increase its capabilities Deploy funds to invest On behalf of the Saudi Arabian government, the country is gradually diversifying its economy away from oil.
Aramco’s new stake also pushes PIF closer to its goal of $1 trillion in assets under management by the end of 2025.
more investment
Saudi Aramco confirms it will Halting plans to increase its oil production capacity from 12 million barrels per day to 13 million barrels per day, a move expected to reduce capital investment by about $40 billion between 2024 and 2028.
Nasser said: “Recent government directives to maintain our maximum sustainable production capacity at 12 million barrels per day provide greater flexibility and focus on increasing gas production and growing our liquid chemicals business. Chance.”
In 2023, Saudi Aramco’s average hydrocarbon production was 12.8 million barrels of oil equivalent per day, including 10.7 million barrels of liquids per day.
Saudi Aramco plans to increase investments in other businesses including natural gas and gas infrastructure. It aims to increase natural gas production by more than 60% by 2030 compared with 2021.Its flagship natural gas investment is jaffra project — The largest natural gas field in the Middle East — with gas reserves estimated at 200 megastandard cubic feet.
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