KEY TAKEAWAY

 

• Record net income: $161.1 billion (2021: $110.0 billion)

• Record cash flow from operating activities: $186.2 billion (2021: $139.4 billion)

• Capital expenditure increased 18.0% YoY

• Record free cash flow $148.5 billion (2021: $107.5 billion)

• Gearing ratio: -7.9% as at December 31, 2022 (end of 2021: 12.0%)

• Q4 2022 Net Income, excluding certain non-cash items of $3.3 billion

• Board declared Q4 cash dividend of $19.5 billion

• Strong track record of reliability continues, with 99.9% supply reliability

 

 

Saudi Arabia’s state controlled oil giant Aramco declared its results on Sunday reported a record net income of $161.1 billion for 2022, the largest annual profit ever achieved by an oil and gas company.

 

The increase in net income reflects stronger crude oil prices, higher volumes sold and improved margins for refined products. Q4 2022 net income is in line with analyst estimates, excluding certain non-cash items of around $3.3 billion.

 

Free cash flow reached a record $148.5 billion in 2022, compared to $107.5 billion in 2021. Aramco continues to emphasize a strong balance sheet and its gearing ratio at the end of 2022 was -7.9%, compared to 12.0% at the end of 2021.

 

Aramco declared a dividend of $19.5 billion for the fourth quarter, to be paid in Q1 2023. This represents a 4.0% increase compared to the previous quarter. Additionally, the Board of Directors also recommended the distribution of bonus shares to eligible shareholders in the amount of one share for every 10 shares held, subject to required Extraordinary General Assembly and regulatory approvals.

 

Capital expenditure in 2022 was $37.6 billion, an increase of 18.0% from 2021. Aramco expects 2023 capital expenditure to be approximately $45.0 billion to $55.0 billion including external investments, with capex increasing until around the middle of the decade.

 

Aramco also completed an energy infrastructure deal in February 2022 resulting in a consortium of investors, led by BlackRock Real Assets and Hassana Investment Company, acquiring a 49% stake in a newly formed subsidiary, Aramco Gas Pipelines Company (AGPC), for $15.5 billion.

 

 

Natural Gas Storage (Master Gas System)

 

Compression projects at the Haradh and Hawiyah fields commenced commissioning activities and full capacity is expected to be reached in 2023. Construction at the Hawiyah Unayzah Gas Reservoir Storage, the first underground natural gas storage project in the Kingdom, is at an advanced stage and has commenced injection activities. The program is designed to provide up to 2.0 billion standard cubic feet per day of natural gas for reintroduction into the Kingdom’s Master Gas System by 2024.

 

 

China Investment (Integrated refinery & petrochemical complex)

 

Aramco announced its final investment decision to participate in the development of a major integrated refinery and petrochemical complex in northeast China. The project presents an opportunity for Aramco to supply up to 210,000 bpd of crude oil feedstock to the complex. The transaction is subject to certain closing conditions, including regulatory approvals.

 

Aramco President & CEO Amin H. Nasser, said: “Aramco delivered record financial performance in 2022, as oil prices strengthened due to increased demand around the world. We also continued to focus on our long-term strategy, building both capacity and capability across the value chain with the aim of addressing energy security and sustainability.”

 

“Given that we anticipate oil and gas will remain essential for the foreseeable future, the risks of underinvestment in our industry are real — including contributing to higher energy prices. To leverage our unique advantages at scale and be part of the global solution, Aramco has embarked on the largest capital spending program in its history, and last year our capex rose by 18.0% to reach $37.6 billion.

 

“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 our own operations and for end users of our products.”

 

 

Strategic Infra Deal – BlackRock Real Assets

 

Aramco also completed an energy infrastructure deal in February 2022 resulting in a consortium of investors, led by BlackRock Real Assets and Hassana Investment Company, acquiring a 49% stake in a newly formed subsidiary, Aramco Gas Pipelines Company (AGPC), for $15.5 billion.

 

 

Operational Highlights

 

In 2022, Aramco’s average hydrocarbon production was 13.6 million barrels of oil equivalent per day (mmboed), including 11.5 million barrels per day (mmbpd) of total liquids. Upstream continues to execute its growth plans to promote long-term productivity of Saudi Arabia’s reservoirs and is proceeding with implementing the Government’s mandate to increase Aramco’s crude oil MSC to 13.0 mmbpd by 2027.

 

 

The results were underpinned by stronger crude oil prices, higher volumes sold and improved margins for refined products, while the Company continues to strengthen its oil and gas production capacity, as well as its downstream portfolio, to meet anticipated future demand.