Dubai: Saudi Arabian oil giant Aramco on Sunday reported a record net income in 2022, boosted by higher energy prices, increased volumes sold and improved margins for refined products.
Net income rose to $161.1 billion for the year that ended December 31, from $110 billion a year earlier.
Aramco also declared a fourth quarter dividend of $19.5 billion, to be paid in the first quarter of 2023.
“Aramco delivered record financial performance in 2022, as oil prices strengthened due to increased demand around the world. We also continued to focus on our long-term strategy, building both capacity and capability across the value chain with the aim of addressing energy security and sustainability,” said Aramco President & CEO Amin H. Nasser.
“Given that we anticipate oil and gas will remain essential for the foreseeable future, the risks of underinvestment in our industry are real — including contributing to higher energy prices. To leverage our unique advantages at scale and be part of the global solution, Aramco has embarked on the largest capital spending program in its history, and last year our capex rose by 18 per cent to reach $37.6 billion.”
Free cash flow reached a record $148.5 billion in 2022, compared to $107.5 billion in 2021, while capital expenditure in 2022 was $37.6 billion, an increase of 18 per cent from 2021. Aramco expects 2023 capital expenditure to be approximately $45 billion to $55 billion including external investments, with capex increasing until around the middle of the decade.
In 2022, Aramco’s average hydrocarbon production was 13.6 million barrels of oil equivalent per day (mmboed), including 11.5 million barrels per day (mmbpd) of total liquids.
Aramco completed an energy infrastructure deal in February 2022 resulting in a consortium of investors, led by BlackRock Real Assets and Hassana Investment Company, acquiring a 49 per cent stake in a newly formed subsidiary, Aramco Gas Pipelines Company (AGPC), for $15.5 billion.
Construction and engineering activities for the Marjan and Berri crude oil increments continue to progress, and are expected to add production capacity of 300,000 barrels per day (bpd) and 250,000 bpd, respectively, by 2025.
The Zuluf crude oil increment is in the engineering phase, and is expected to provide a central facility to process a total of 600,000 bpd of crude oil from the Zuluf field by 2026. Construction activities are also continuing on the Dammam development project, which is expected to add 25,000 bpd and 50,000 bpd of crude oil by 2024 and 2027, respectively.
In August, Aramco signed an equity purchase agreement to acquire Valvoline Inc.’s global products business (Valvoline Global Products) for $2.65 billion. The strategic acquisition, which closed in March 2023, will complement Aramco’s line of premium branded lubricant products, optimize its global base oils production capabilities, and expand Aramco’s own R&D activities and partnerships with original equipment manufacturers.
In November, three transactions with Polish refiner and fuel retailer PKN ORLEN were completed, expanding Aramco’s presence in the European downstream sector. As part of the transaction, the company acquired equity stakes of 30 per cent in a 210,000 bpd refinery in Gdańsk; 100 per cent in an associated wholesale business; and 50 per cent in a jet fuel marketing joint venture.
Aramco and TotalEnergies made a final investment decision in December to construct a large petrochemical complex in Saudi Arabia. It will enable an existing SATORP refinery to advance Aramco’s liquids-to-chemicals strategy. The investment decision is subject to customary closing conditions and approvals.
In October, Aramco established a $1.5 billion sustainability fund to invest in technology needed to support a stable and inclusive energy transition.