In a season Nigeria’s state oil company maintained its obsession to pay petrol subsidy on a product that is rarely available, Saudi Arabia’s state-controlled oil giant has reported a net income of $161.1 billion for 2022, the largest annual profit ever achieved by an oil and gas company.
Data gleaned from Saudi Aramco latest financial result showed the firm’s net income increased 46.5 percent over the year, from $110 billion in 2021. Free cash flow also reached a record $148.5 billion in 2022, compared with $107.5 billion in 2021.
Aramco also declared a dividend of $19.5 billion for the fourth quarter of 2022, to be paid in the first quarter of this year.
“Our focus is not only on expanding oil, gas and chemicals production, but also investing in new lower-carbon technologies with potential to achieve additional emission reductions in own operations and for end users of our products,” Aramco CEO Amin Nasser said in the report.
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The firm’s Capital expenditure rose by 18 percent to $37.6 billion last year, and is expected to increase to $45 billion to $55 billion in the coming years, anticipating increases “until around the middle of the decade.”
Aramco put its crude production at around 11.5 million barrels a day in 2022 and said it hoped to reach 13 million barrels a day by 2027.
To boost that production, it plans to spend as much as $55 billion this year on capital projects.
The firm’s Capital expenditure rose by 18 percent to $37.6 billion last year, and is expected to increase to $45 billion to $55 billion in the coming years, anticipating increases “until around the middle of the decade.”
Oil and gas prices surged at the start of last year, with western sanctions on Russia for its invasion of Ukraine steadily tightening access to Moscow’s supplies, particularly seaborne crude and oil products.
Oil prices have since pulled back more than 25percent year-on-year, with hot inflation and rising interest rates overshadowing a more bullish demand outlook from China. Brent and WTI prices fell 6percent last week alone. Brent last traded at around $80 dollars per barrel.
Saudi Arabia has pledged to have net-zero carbon emissions by 2060, like China and Russia, though its plans to reach that goal remain unclear.
However, they also run against the fears of activists over climate change, particularly as the United Nations’ COP28 climate talks will begin this November in the neighbouring United Arab Emirates.
Aramco’s earnings report noted it started a $1.5 billion Sustainability Fund in October and plans a carbon-capture-and-storage facility as well.
For the kingdom, higher crude oil prices can help fuel the dreams of Prince Mohammed, including his planned $500 billion futuristic desert city project called Neom.
On the other hand, Aramco’s counterpart, Nigerian National Petroleum Company (NNPC) Limited, is not only unable to bail out Nigeria’s troubled economy but has also not been able to make remittances to the Federation Account due to its huge subsidy spending on petrol.
Nigeria is on course to spend about N6 trillion this year on petrol subsidies, and Nigeria’s President-elect, Bola Tiuubu has vowed to remove the opaque exercise that cost Africa’s biggest economy Global offshore oil, gas sector to hit $200bn greenfield investments by 2025.
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