Saudi Aramco 2023 Financial Report: $121.3 Billion in Net Profit

Author: EqualOcean News Mar 11, 2024 09:02 PM (GMT+8)

In 2023, despite a decline in net profit compared to the previous year, Saudi Aramco still achieved a net profit of $121.3 billion, marking the second-highest annual profit in its history. This figure represents a roughly 25% decrease from 2022's $161.1 billion, primarily due to lower crude oil prices and sales volumes, as well as reduced profit margins in refining and chemicals.

Amidst global economic and geopolitical factors, the international oil price fluctuated and declined overall in 2023. Specifically, the average annual price of Brent crude was $82.17 per barrel, a 17% drop from the previous year. These price changes significantly impacted Saudi Aramco's revenue and profits.

Despite these challenges, Saudi Aramco's total revenue remained high at $440.88 billion, a 17% decrease compared to the previous year. Additionally, the company's free cash flow was $101.2 billion, down 32% from the previous year. Financially, Saudi Aramco's debt ratio increased from -7.9% to -6.3%, but still demonstrates the company's strong financial position. In terms of dividends, Saudi Aramco increased its total payout to $97.8 billion, a 30% increase compared to the previous year.

Saudi Aramco's executives remain optimistic about the company's long-term prospects. Amin H. Nasser, the CEO, stated that despite economic headwinds, the company's resilience and flexibility continue to support healthy cash flows and high profitability. He anticipates that oil and natural gas will remain central to the global energy structure for decades to come.

In terms of production, Saudi Aramco's average daily hydrocarbon production in 2023 was 12.8 million barrels of oil equivalent, including 10.7 million barrels of liquid. Production increases were mainly attributed to contributions from projects such as Marjan, Berri, Dammam, and Zuluf. Moreover, Saudi Aramco aims to increase its natural gas production by more than 60% by 2030 compared to 2021. To achieve this, the company is advancing several natural gas projects, including the Hawiyah Unayzah gas storage facility, which aims to provide up to 2 billion standard cubic feet per day. Additionally, the expansion of the Hawiyah gas plant increased its daily processing capacity by 800 million standard cubic feet.

Internationally, Saudi Aramco made significant breakthroughs in 2023. The company ventured into the liquefied natural gas (LNG) sector with a $500 million investment in a minority stake in MidOcean Energy, marking its first international investment in the LNG field. MidOcean Energy is acquiring equity in four Australian LNG projects to establish a diversified global LNG business. Furthermore, Saudi Aramco acquired a 10% stake in Rongsheng Petrochemical Co. Ltd. for 24.6 billion yuan and agreed to supply 480,000 barrels per day of crude oil to its subsidiary, Zhejiang Petrochemical Co. Ltd. Additionally, Saudi Aramco completed the acquisition of Valvoline's global products business to optimize its global base oil production capabilities and expand research and development activities, as well as partnerships with original equipment manufacturers.

In the renewable energy sector, Saudi Aramco, in partnership with the Public Investment Fund (PIF) and ACWA Power, signed a shareholder agreement to develop the Al Shuaibah 1 and Al Shuaibah 2 photovoltaic solar projects in Saudi Arabia. These projects, with a total capacity of 2.66 gigawatts, are expected to commence commercial operations in 2025. The financial report also revealed that Saudi Aramco's capital investment in 2023 amounted to $49.7 billion, a 28% increase from the previous year. The company expects its capital investment for 2024 to be between $48 billion and $58 billion.