Oil giant Saudi Aramco’s profits reached $161 billion last year due to a boost in crude oil prices, the company reported on Sunday. It was a record result for an energy firm crucial to the kingdom’s economy.
The company, officially known as Saudi Arabian Oil Co.indicated in its annual report that it was “its largest annual profits as a listed company”. Energy prices rose after Russia launched its war in Ukraine in February 2022, as sanctions limited the sale of Russian oil and gas in Western markets.
Aramco is also hoping to boost production to tap market demand, which would help raise the billions needed to pay for Crown Prince Mohammed bin Salman’s plans to develop futuristic cities and reduce the country’s dependence on oil.
However, there is growing international concern that the burning of fossil fuels will accelerate climate change.
“Given that we expect oil and gas to remain essential for the foreseeable future, the risk of divesting from our industry is real, and includes contributing to higher energy prices,” the CEO and Chairman of the company said in a statement. Saudi Aramco, Amin H. Nasser.
The Profits were up 46.5% compared to $110 billion in 2021. The company made 49,000 million dollars in 2020as the world was at the height of coronavirus pandemic lockdowns and crude prices briefly dipped.
Aramco estimated its crude production at about 11.5 million barrels a day in 2022 and said it expected to reach 13 million barrels a day by 2027.
To boost that output, he expected to spend as much as $55 billion on projects this year.
Aramco also announced a $19.5 billion dividend for the fourth quarter of 2022, to be paid in the first quarter of this year.
Benchmark Brent crude was now trading at around $82 a barrelalthough the prices exceeded $102 per barrel in June. Aramco, whose revenue depends on global energy prices, announced a record profit of $42.4 billion in the third quarter of 2022 after that price spike.
Those higher prices have further strained relations between the kingdom and the United States, a traditional guarantor of security in Persian Gulf states, amid tensions with Iran. However, ahead of the US midterm elections in November, Riyadh said Washington had asked to postpone a decision by OPEC and its allies, including Russia, on a production cut to keep gasoline prices lower for voters. . That revelation exposed regional negotiations that are normally kept private.
US President Joe Biden warned the kingdom that “there would be consequences for what they have done” in terms of crude oil prices. However, those consequences have not yet occurred. Saudi Arabia and Iran went to China on Friday to reach a diplomatic deal. Meanwhile, US gasoline prices are now averaging $3.47 a gallon, just a dollar below last year.
For the kingdom, higher oil prices may help finance Prince Mohammed’s dreams, like his futuristic desert city, a 500-billion-year-old project called Neom. However, they also clash with the fears of climate change activists, especially ahead of the United Nations climate talks, which begin their COP28 summit in November in the neighboring United Arab Emirates.
Saudi Arabia has promised to reach carbon neutrality by 2060, like China and Russia, though its plan to achieve it is still unclear..
Amnesty International’s reaction
Amnesty International (AI) called Aramco’s net profits “scandalous” this Sunday.
”It is scandalous that a company obtains a profit of more than 161,000 million US dollars in a single year from the sale of fossil fuels, the main factor of the climate crisisAI Secretary General Agnès Callamard said in a statement.
He pointed out that it is even more “shocking” that this surplus “was amassed during a global cost-of-living crisis and helped by rising energy prices stemming from Russia’s war of aggression against Ukraine.”
In this regard, Callamard stated that “it is time for Saudi Arabia to act in the interest of humanity and support the phasing out of the fossil fuel industrywhich is essential to prevent further climate damage.”
Oil and gas produced by Aramco is estimated to be responsible for more than 4% of global greenhouse gas emissions since 1965 and, according to a study, they accounted for around 4.8% of all global greenhouse gas emissions in 2018, the most of any oil and gas company, AI said.
(with information from AP and EFE)
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Source-www.infobae.com