DUBAI- Saudi Arabia’s state oil company Aramco, under pressure from the West to boost output amid soaring prices, pledged to hike investments by around 50 percent this year as it reported a doubling in 2021 profits.
Oil prices leapt 50 percent last year as demand recovered from the COVID-19 pandemic, and then surged above $100 a barrel to 14 year highs in February after Russia invaded Ukraine, leading Western nations to urge major producers to increase output.
Aramco said it would boost its capital expenditure (capex) to $40-50 billion this year, with further growth expected until around the middle of the decade. Capex was $31.9 billion last year, up 18 percent from 2020 – indicating an increase of about 50 percent for this year at the middle of the guidance range.
Asked if Aramco would pump more oil to fill any gaps in the market left by the war in Ukraine, CEO Amin Nasser said it would produce according to guidelines from the Saudi energy ministry.
The company has said it plans to raise its crude oil “maximum sustainable capacity” to 13 million barrels a day by 2027, and wants to increase gas production by more than 50 percent by 2030. Its average hydrocarbon production was 12.3 million barrels of oil equivalent per day last year.
Aramco made $110 billion in net profit in 2021, up from $49 billion a year earlier and compared with analysts’ mean estimate of $106 billion, according to RefinitivEikon.
With a rise in both output and prices, analysts expect net profit to reach $140 billion in 2022.
Aramco’s shares rose over 4 percent in early trade to a high of 43.85 riyals, valuing it at 8.76 trillion riyals ($2.34 trillion).
A $2 trillion valuation was a goal sought by de-facto Saudi leader Crown Prince Mohammed bin Salman before the company’s record $29.4 billion initial public offering in 2019.
He has announced plans to sell more Aramco shares.
The surge in Aramco’s valuation on Sunday moved it above that of Microsoft, though it remains behind Apple’s $2.68 trillion.
