Saudi Aramco reports its highest-ever annual profit by a public company, drawing criticism from activists.
Oil giant Saudi Aramco has reported that it lost $161 billion last year.
Officially known as Saudi Arabian Oil Co., the company’s monster win came on surging energy prices after Russia launched its war against Ukraine in February 2022, with sanctions restricting sales of Moscow’s oil and natural gas to Western markets.
Aramco also hopes to ramp up its production to capitalize on market demand as China re-enters the global market after lifting its coronavirus restrictions. That could raise the billions needed to pay for Saudi Crown Prince Mohammed bin Salman’s plans to develop futuristic cityscapes to take Saudi Arabia off oil.
However, these plans come despite growing international concerns about burning fossil fuels, which are accelerating climate change. Meanwhile, higher energy prices have already strained relations between Riyadh and Washington and pushed up inflation around the world.
“Given that we expect oil and gas to remain critical for the foreseeable future, the risks of underinvesting in our industry are real — including contributing to higher energy prices,” said Amin H. Nasser, CEO and President from Saudi Aramco, in a statement.
Earnings increased 46.5 percent compared to 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 put its crude oil production at about 11.5 million barrels per day in 2022 and hopes to reach 13 million barrels per day by 2027.
To boost this production, the company plans to spend up to $55 billion on capital projects this year.
Aramco also announced a $19.5 billion dividend for the fourth quarter of 2022, which is expected to be paid in the first quarter of this year.
Aramco’s results, viewed as a guide for the global energy market, reflect huge gains for energy giants BP, ExxonMobil, Shell and others in 2022.
But the sheer size of the $161 billion gain overshadowed even its own previous results, as well as records set by Apple, Vodafone, and the US Federal National Mortgage Association or Fannie Mae.
Benchmark Brent crude is now trading at around $82 a barrel, despite prices hitting over $120 a barrel in June. Aramco, whose fortunes depend on global energy prices, announced a record profit of $42.4 billion in the third quarter of 2022 on the back of this price surge.
The overwhelming gains have been criticized by activists worried about climate change, especially as the United Nations’ COP28 climate talks are due to start this November in the neighboring United Arab Emirates.
Saudi Arabia has committed to net-zero carbon emissions by 2060, like China and Russia, although its plans to achieve that goal remain unclear. Aramco’s earnings report said it launched a $1.5 billion sustainability fund in October and is also planning a carbon capture and storage facility.
Amnesty International Secretary-General Agnès Callamard criticized Aramco’s annual profit amid global climate change concerns.
“It’s shocking for a company to make more than $161 billion in profit in a single year from the sale of fossil fuels – the biggest single driver of the climate crisis,” she said in a statement.
“It is all the more shocking given that this surplus has been accumulated during a global livelihood crisis and has been helped by the rise in energy prices resulting from Russia’s war of aggression against Ukraine.”
Callamard also noted that Saudi Arabia remains one of the world’s top executioners while remaining embroiled in a years-long war in Yemen and cracking down on dissent.
“These extraordinary profits and all future earnings from Aramco should not be used to fund, cover up, or attempt to whitewash human rights abuses,” she said.