Saudi Aramco, the state-backed oil giant, reported a 25% decrease in profits, down to $121 billion (£91 billion) after a stellar performance in 2022. However, this figure still represents the second-highest profit ever achieved by the company.
Despite the decline, Saudi Aramco announced plans to increase dividends to $98 billion, marking a nearly one-third rise compared to 2022. The previous year, the company reaped a record-breaking profit of $161 billion, largely attributed to the impact of Russia’s war in Ukraine on energy prices, driving oil prices to $130 a barrel.
With the Saudi state holding nearly 95% ownership of the company, these robust profits contributed to a budget surplus for the kingdom in 2022.
In 2023, oil prices receded to $85 a barrel, and Saudi Aramco reduced production to bolster oil prices, posing additional challenges to profitability.
Aramco’s Chief Executive, Amin Nasser, emphasized the company’s resilience amidst economic headwinds, stating, “In 2023, we achieved our second-highest ever net income. Our resilience and agility contributed to healthy cash flows and high levels of profitability, despite a backdrop of economic headwinds.”
Saudi Arabia aims to diversify its economy, utilizing revenue from the energy sector to facilitate the transition. Nasser revealed plans for announcements regarding investments in renewables within Saudi Arabia, highlighting the company’s commitment to sustainability.
Furthermore, Saudi Aramco is eyeing opportunities in China, where oil demand continues to rise. Nasser noted the healthy and growing demand for oil in China, expressing optimism about the oil market’s prospects in 2024. He also mentioned ongoing discussions regarding a potential stake in a partnership between French carmaker Renault and China’s Geely, focusing on hybrid car engines.
