Aramco Profits Slide, Dividends Surge, Despite Headwinds

Lower Oil Prices, Volumes Hit Bottom Line:

Saudi Aramco reported a 25% decline in net income to $121.3 billion in 2023, down from a record $161.1 billion in 2022.
Lower crude oil prices and volumes sold, along with reduced refining and chemicals margins, contributed to the profit decrease.

Resilience on Display: Record Dividends Despite Headwinds:

Despite the profit decline, this still represents Aramco’s second-highest annual profit on record.
Aramco raised its base and performance-linked dividends, resulting in a record $31 billion payout to the Saudi government and shareholders.

Shifting Strategies for a Changing Market:

Aramco will maintain its oil production capacity at 12 million barrels per day, prioritizing flexibility and investment in gas production.
The company aims to ramp up gas production by over 60% by 2030 compared to 2021 levels, with the Jafurah gas project leading the charge.
This shift reflects Saudi Arabia’s long-term goal of economic diversification beyond oil dependence.

PIF Strengthens Position: Increased Stake and Dividend Windfall

The Saudi government transferred an additional 8% of Aramco shares to the Public Investment Fund (PIF).
This bolsters PIF’s financial position and allows it to benefit from Aramco’s substantial dividend payouts.

Looking Forward: Optimism Amidst Change

Aramco remains optimistic about the oil market’s health in 2024, despite the profit decline.
The company’s strategic shift towards gas production positions it for future growth in a changing energy landscape.
The Aramco-PIF deal highlights Saudi Arabia’s commitment to economic diversification.