DUBAI, United Arab Emirates — Saudi oil giant Aramco on Sunday reported it made $121 billion in profit last year, down from its 2022 record due to lower energy prices.
The results still marked the company’s second highest ever result, Aramco said, as members of the OPEC+ alliance continue to cut their production to try to boost global energy prices. 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 $161 billion 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 stock holders to over $31 billion in the fourth quarter, according to filings.
The energy giant had planned a conference call Monday to discuss its results.
Aramco reported overall revenue of $440 billion last year, down from $535 billion 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 H. 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 $2 trillion, 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 $500 billion futuristic desert city, called Neom, and other projects.
Meanwhile, activists criticized the profits amid global concerns about the burning of fossil fuels accelerating climate change.
On Thursday, Prince Mohammed transferred another 8% of Aramco shares to the country’s prominent sovereign wealth fund, worth over $160 billion. The vast majority of the company remains held by the Al Saud royal family, with a sliver traded on the Tadawul stock market.
Saudi Aramco, the world’s largest oil company, recently reported a profit of $121 billion for the year 2023. While this figure is slightly lower than the previous year’s record-breaking profit of $123.6 billion, it still represents a strong performance for the company in a challenging global economic environment.
The decrease in profit can be attributed to a number of factors, including lower oil prices and reduced demand for oil and gas due to the ongoing COVID-19 pandemic. Despite these challenges, Aramco was able to maintain its position as one of the most profitable companies in the world.
Aramco’s ability to weather these challenges and still report a profit of over $100 billion is a testament to the company’s resilience and strong financial position. The company has taken steps to diversify its business and reduce its reliance on oil and gas, investing in renewable energy projects and expanding its presence in petrochemicals and other sectors.
In addition to its financial performance, Aramco has also made significant strides in terms of sustainability and environmental responsibility. The company has committed to reducing its carbon emissions and has invested in technologies to capture and store carbon dioxide. Aramco is also working to increase the efficiency of its operations and reduce its environmental impact.
Overall, Aramco’s performance in 2023 demonstrates the company’s ability to adapt to changing market conditions and continue to deliver strong financial results. With a focus on sustainability and innovation, Aramco is well-positioned to navigate the challenges of the future and remain a leader in the global energy industry.
