Saudi Aramco announces highest annual profit ever by a listed company, drawing criticism from activists.
Oil giant Saudi Aramco has reported a profit of 161 billion. USD last year, claiming the highest ever recorded annual profit by a listed company and drawing immediate criticism from activists.
The monster profit from the firm, formally known as Saudi Arabian Oil Co., came amid rising energy prices after Russia launched its war on Ukraine in February 2022 with sanctions that limited the sale of Moscow’s oil and natural gas in Western markets.
Aramco also hopes to increase its output to take advantage of market demand as China re-enters the global market after lifting its coronavirus restrictions. It could raise the billions needed to pay for Saudi Arabia’s Crown Prince Mohammed bin Salman’s plans to develop futuristic cityscapes to turn Saudi Arabia away from oil.
But these plans come despite growing international concerns over the burning of fossil fuels accelerating climate change. Meanwhile, higher energy prices have already strained relations between Riyadh and Washington, as well as driving up inflation worldwide.
“Given that we expect oil and gas to remain essential for the foreseeable future, the risk of underinvestment in our industry is real – including contributing to higher energy prices,” Saudi Aramco CEO and President Amin H Nasser said in a statement.
Profit rose 46.5 percent compared to the company’s 2021 results of $110 billion. Saudi Aramco made $49 billion in 2020 as the world faced the worst of the corona pandemic lockdown, travel disruptions and oil prices briefly went negative.
Aramco put its crude output at about 11.5 million barrels per day in 2022 and said it hoped to reach 13 million barrels per day in 2027.
To boost production, it plans to spend as much as $55 billion this year on capital projects.
Aramco also declared a dividend of $19.5 billion. for the fourth quarter of 2022, payable in the first quarter of this year.
Aramco’s results, seen as a bellwether for the global energy market, mirror the huge profits seen at energy giants BP, ExxonMobil, Shell and others in 2022.
But the very size of the profit of $161 billion. eclipsing even its own past performance, as well as records from Apple, Vodafone and the US Federal National Mortgage Association, or Fannie Mae.
Benchmark Brent crude is now trading at around $82 a barrel. barrel, even though prices had reached above $120 per barrel. barrel back in June. Aramco, whose fortunes depend on global energy prices, announced a record profit of 42.4 billion. USD in the third quarter of 2022 on the basis of this price increase.
The staggering surplus drew criticism from activists concerned about climate change, particularly as the UN’s COP28 climate talks begin in November in the neighboring United Arab Emirates.
Saudi Arabia has pledged to have net-zero carbon emissions by 2060, as have China and Russia, although its plans to achieve this goal remain unclear. Aramco’s earnings report noted that it started a 1.5bn sustainability fund. USD in October and is also planning a carbon capture and storage facility.
Amnesty International Secretary-General Agnès Callamard criticized Aramco’s annual profits, which came against a backdrop of global concerns about climate change.
“It is shocking for a company to make a profit of more than $161 billion in a single year through the sale of fossil fuels – the single largest factor behind the climate crisis,” she said in a statement.
“It is all the more shocking because this surplus was amassed during a global cost-of-living crisis and aided by the rise in energy prices as a result of Russia’s war of aggression against Ukraine.”
Callamard also noted that Saudi Arabia remains one of the world’s top executioners, while also remaining locked in a year-long war in Yemen and cracking down on dissent.
“These extraordinary profits and any future earnings from Aramco should not be used to fund human rights abuses, cover them up or attempt to hide them,” she said.