Saudi Aramco announces the highest annual profit ever by a listed company, drawing criticism from activists.
Oil giant Saudi Aramco said it earned $161 billion last year, claiming the highest annual profit ever by a listed company and drawing immediate criticism from activists.
The monstrous profit of the company, officially known as the Saudi Arabian Oil Co., was made thanks to rising energy prices after Russia launched its war on Ukraine in February 2022, with sanctions limiting the sale of Moscow’s oil and natural gas to Western markets.
Aramco also hopes to increase production 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 Crown Prince Mohammed bin Salman’s development plans futuristic cityscapes to keep Saudi Arabia away from oil.
However, these plans come despite growing international concerns about the burning of fossil fuels accelerating climate change. At the same time, rising energy prices have already tight relationships between Riyadh and Washington, as well as rising inflation around the world.
“Given that we expect oil and gas to remain essential for the foreseeable future, the risks of underinvestment in our industry are real, including contributing to higher energy prices,” said the CEO and Saudi Aramco Chairman Amin H Nasser in a statement.
Profits rose 46.5% from the company’s 2021 results of $110 billion. Saudi Aramco earned $49 billion in 2020 as the world faced the worst of the coronavirus pandemic lockdown, travel disruptions and briefly negative oil prices.
Aramco has estimated its crude production at around 11.5 million barrels per day in 2022 and said it hopes to reach 13 million barrels per day by 2027.
To boost that production, it plans to spend up to $55 billion this year on capital projects.
Aramco also declared a $19.5 billion dividend for the fourth quarter of 2022, to be paid in the first quarter of this year.
Aramco’s results, seen as a gauge of the global energy market, reflect the huge profits made by energy giants BP, ExxonMobil, Shell and others in 2022.
But the sheer size of the $161 billion profit eclipsed even its own previous results, as well as records from Apple, Vodafone and the US Federal National Mortgage Association, or Fannie Mae.
Benchmark Brent crude now trades around $82 a barrel, although prices rose above $120 a barrel in June. Aramco, whose fortunes depend on global energy prices, reported a record $42.4 billion profit in the third quarter of 2022 thanks to this price spike.
The staggering profits have drawn criticism from activists concerned about climate change, especially as UN COP28 climate talks kick off in November in the neighboring United Arab Emirates.
Saudi Arabia has pledged to have net-zero carbon emissions by 2060, like China and Russia, though its plans for achieving the goal remain unclear. Aramco’s earnings report says it launched a $1.5 billion sustainability fund in October and also plans a carbon capture and storage facility.
Amnesty International Secretary General Agnes Callamard has slammed Aramco’s annual profit amid global concerns over climate change.
“It is shocking for a company to make over $161 billion in profit in a single year from the sale of fossil fuels – the main driver of the climate crisis,” she said in a statement.
“It is all the more shocking that this surplus was amassed during a global cost-of-living crisis and aided by rising energy prices resulting from Russia’s war of aggression against the US. ‘Ukraine.”
Callamard also noted that Saudi Arabia remains one of the best executioners in the world while remaining locked in a years-long war in Yemen and suppressing dissent.
“These extraordinary profits, and any future income from Aramco, should not be used to fund human rights abuses, cover them up or try to cover them up,” she said.