MIDDLE EAST

prices, higher volumes sold, and improved margins for refined products. The net income jumped by 46.5% from $110 billion in 2021. Free cash flow also hit a record, at $148.5 billion in 2022, compared to $107.5 billion FCF generated in 2021.

Aramco also declared a fourth quarter dividend of $19.5 billion, to be paid in the first quarter of 2023. This represents a 4.0% increase compared to the previous quarter, aligned with Aramco’s dividend policy aiming to deliver a sustainable and progressive dividend, the company said.

Capital expenditure also rose last year, by 18% annually to $37.6 billion. Aramco expects capital expenditure in 2023 to be even higher—at between $45 billion and $55 billion including external investments, with capex increasing until around the middle of the decade.

The company says it continues to boost its oil and gas production capacity, as well as its downstream portfolio, to meet anticipated future demand. The Saudi giant aims to have an oil production capacity of 13 million bpd by 2027, as mandated by the government. The Marjan and Berri crude oil developments are expected to add production capacity of 300,000 bpd and 250,000 bpd, respectively, by 2025. Other projects to boost capacity include Zuluf and Dammam and they are also expected to increase Saudi Arabia’s production capacity by 2027, Aramco said.

“Ultimately, we believe the world will continue to need oil and gas for the foreseeable future. Indeed, the future will most certainly favor the lowest-cost, least carbon-intensive producers, and Aramco is exceptionally well-placed in this respect,” Yasir Al-Rumayyan, Chairman of the Board of Directors, said in a statement in the results release.

While praising the record results, Aramco’s president and chief executive officer Amin Nasser warned once again that the world could be sleepwalking into an oil supply crisis if investments do not increase soon.

“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,” Nasser said.

“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,” Aramco’s top executive added.

Aramco has signed a letter of intent to become a potential minority stakeholder in a new powertrain technology company, to be established by Geely Holding Group and Renault Group. The new company will develop internal combustion and hybrid powertrain technologies.

Deals and ADNOC gas IPO

In recent weeks, Aramco has also signed several agreements to explore and develop opportunities in lower-carbon technologies.

Aramco has signed a letter of intent to become a potential minority stakeholder in a new powertrain technology company, to be established by Geely Holding Group and Renault Group. The new company will develop internal combustion and hybrid powertrain technologies. A potential Aramco investment would support the growth of the company, and contribute to key research and development across synthetic fuels solutions and nextgeneration hydrogen technologies. The new company aims to have an annual production capability of more than five million internal combustion, hybrid, and plug-in hybrid engines and transmissions per year.

“This partnership with Aramco will raise our joint powertrain company together with Geely Group to the next level and give it a head start in the race towards ultra-low-emissions ICE powertrain technology,” said Luca de Meo, CEO of Renault Group.

Daniel Li, CEO of Geely Holding Group, said, “The proposed investment by Aramco represents recognition from global industry leaders in the PWT’s future business prospects and vision for pioneering low and carbon-free fuels such as methanol and hydrogen.”

Aramco also signed an agreement with Linde Engineering to jointly develop a new ammonia cracking technology. The collaboration will combine Linde Engineering and Aramco’s experience and capabilities in industrial research and development, lower-carbon hydrogen, and ammonia cracking technology.

Through this agreement, Aramco and Linde Engineering plan to build a demonstration plant in northern Germany to showcase the new ammonia cracking technology. Linde Engineering intends to offer this technology to current and new customers, creating new commercial opportunities within the global lower-carbon energy supply chain, Aramco said in a statement.

In the United Arab Emirates (UAE), the gas unit of Abu Dhabi National Oil Company (ADNOC) debuted on the Abu Dhabi Securities Exchange (ADX) on 13 March, having raised $2.5 billion by selling 5% in an initial public offering.

The IPO of ADNOC Gas was the largest-ever listing on the Abu Dhabi Securities Exchange and the largest IPO globally to date in 2023, one of the advisers, Gibson, Dunn & Crutcher LLP, said.

The IPO was more than 50 times oversubscribed in aggregate, while the retail offering, which attracted the largest-ever demand in a MENA IPO, was over 58 times oversubscribed. ADNOC Gas’ debut on the ADX implied a market capitalisation of around $50 billion.