Despite the decline in profits.. Saudi Aramco raises dividends by 4% in 2023 | Economy

The giant Saudi oil company announced AramcoIncreasing the distribution of dividends to shareholders, despite the decline in net profits to $121.25 billion last year from a record level of $161.1 billion in 2022, due to the decline in oil prices.

The company stated in a statement on Sunday that profits nevertheless recorded the second highest level, and Aramco raised the total dividends for the full year by 30% to $97.8 billion.

Aramco announced basic dividends for the fourth quarter of 2023 amounting to $20.3 billion, an increase of 4% year-on-year, which will be paid in the first quarter of 2024.

It announced performance-related dividends amounting to $10.78 billion, which is the third installment of those dividends. Both types of distributions were increased compared to the previous quarter.

The decline in the profits of the company, whose shares are majority owned by the Saudi state, comes against the backdrop of a decline in crude oil prices, quantities sold, and prices of refined and chemical products, according to what it said in its statement today.

Oil prices fell in 2023 to $85 per barrel, as a result of which Aramco’s net profits in the third quarter of 2023 declined by 23% on an annual basis, 19.25% in the first quarter, and 38% in the second quarter.

Capital investments

The company said that capital investments amounted to $49.7 billion in 2023, including $42.2 billion in major capital expenditures, up from $38.8 billion, including $37.6 billion in major capital expenditures in 2022.

Saudi Aramco expects capital investments for 2024 to reach between $48 and $58 billion, with growth until approximately the middle of the current decade.

The government directed Saudi Arabia Aramco decided in late January to maintain the level of maximum sustainable production capacity at 12 million barrels per day and abandon a plan to raise it to 13 million barrels.

Aramco said that this decision is expected to “reduce capital investment by approximately $40 billion between 2024 and 2028.”

Free cash flows declined to $101.2 billion in 2023, compared to $148.5 billion in 2022.

General view of Aramco tanks and oil pipe at Saudi Aramco's Ras Tanura oil refinery and oil terminal
Saudi oil export revenues last year amounted to $248 billion (Reuters)

Transfer share

AndaLast Thursday, Saudi Arabia announced the transfer of “an additional 8% stake in Aramco shares from state ownership to portfolio companies wholly owned by the Public Investment Fund,” which is leading efforts to diversify the Saudi economy, and now owns 16% of the company’s shares.

The production of the world’s largest crude oil exporter declined during 2023 after Riyadh announced in April a reduction of 500,000 barrels per day as part of a joint move with the OPEC+ alliance to reduce supplies by more than one million barrels per day in an attempt to support prices.

These efforts began in October 2022 by reducing production by about two million barrels.

In July, Riyadh began implementing an additional voluntary cut of one million barrels per day, a decision that was extended monthly. It was announced last week that it will continue until next June.

Agence France-Presse quoted an expert in the energy sector residing in the Emirates, Ibrahim Al-Ghitani, as saying: “Saudi Arabia bears the greatest burden of reducing production as it is the largest producer within the coalition and OPEC.”

He added: “If it were not for the ‘OPEC+’ policy, oil prices would have been below the level we see today above $80 per barrel, especially amid signs of turmoil in the global economic environment following the Corona pandemic, the Ukrainian war, and then the Gaza war.”


Saudi Aramco CEO Amin Nasser said that the oil giant is looking for more investment opportunities in China, where demand for oil is strong and growing.

He added that Aramco would likely enter into a partnership with Mid Ocean Energy, which agreed last year to acquire a strategic minority stake in it, to invest in liquefied natural gas projects in geographical areas besides Australia.

Al-Nasser pointed out that the government’s directives require providing increased flexibility, as well as an opportunity to focus on increasing gas production and developing Aramco’s business in the field of converting liquids to chemicals.

Last September, the company announced its first global investment in the liquefied natural gas sector, with its acquisition of a $500 million minority stake in Mid-Ocean Energy Company, which is managed by the American investment company AIG.

It should be noted that Saudi Arabia needs a crude price higher than $90 per barrel this year to finance spending plans, according to Fitch Credit Rating Agency.

Brent crude oil closed in London near $82 last week. Saudi oil export revenues fell to $248 billion last year, a decrease of about $80 billion.

ظهرت في الأصل على

Leave a Comment