Saudi Arabia’s Aramco has announced second-quarter and half-year 2023 results, delivering strong profitability and cash flows, enabled by low-cost production and high supply reliability.

Aramco’s net income reached $30.1 billion in Q2 bringing the H1’23 total to $62.0 billion, while its cash flow from operating activities H1’23 soared to $73.3 billion, with $33.6 billion recorded in Q2.

Meanwhile, the Saudi Arabian oil company’s free cash flow reached $23.2 billion and $54.1 billion in Q2’23 and H1’23 respectively.

Commenting on the results, Aramco President and CEO Amin H. Nasser said, “Our strong results reflect our resilience and ability to adapt through market cycles. We continue to demonstrate our long-standing ability to meet the needs of customers around the world with high levels of reliability.

“At Aramco, our mid to long-term view remains unchanged. With a recovery anticipated in the broader global economy, along with increased activity in the aviation sector, ongoing investments in energy projects will be necessary to safeguard energy security.

“We are maintaining the largest capital spending programme in our history, with the aim of increasing our oil and gas production capacity and expanding our Downstream business - with petrochemicals projects, such as our $11 billion expansion of the SATORP refinery with TotalEnergies, essential to meet future demand.”

Aramco recently announced that it has reported a record net income of $161.1 billion — its highest annual profits as a listed company for the year 2022. Aramco also declared a fourth quarter dividend of $19.5 billion, to be paid in the first quarter of 2023.

The results were underpinned by stronger crude oil prices, higher volumes sold and improved margins for refined products, while the Company continues to strengthen its oil and gas production capacity, as well as its downstream portfolio, to meet anticipated future demand.

Aramco’s net income increased by 46.5% to a record $161.1 billion in 2022, compared to $110.0 billion in 2021. The increase in net income reflects stronger crude oil prices, higher volumes sold and improved margins for refined products. Q4 2022 net income is in line with analyst estimates, excluding certain non-cash items of around $3.3 billion.

Free cash flow reached a record $148.5 billion in 2022, compared to $107.5 billion in 2021. Aramco continues to emphasize a strong balance sheet and its gearing ratio at the end of 2022 was -7.9%, compared to 12.0% at the end of 2021.

Aramco declared a dividend of $19.5 billion for the fourth quarter, to be paid in Q1 2023. This represents a 4.0% increase compared to the previous quarter, aligned with the Company’s dividend policy aiming to deliver a sustainable and progressive dividend. Additionally, the Board of Directors also recommended the distribution of bonus shares to eligible shareholders in the amount of one share for every 10 shares held, subject to required Extraordinary General Assembly and regulatory approvals.

Capital expenditure in 2022 was $37.6 billion, an increase of 18.0% from 2021. Aramco expects 2023 capital expenditure to be approximately $45.0 billion to $55.0 billion including external investments, with capex increasing until around the middle of the decade.

Aramco also completed an energy infrastructure deal in February 2022 resulting in a consortium of investors, led by BlackRock Real Assets and Hassana Investment Company, acquiring a 49% stake in a newly formed subsidiary, Aramco Gas Pipelines Company (AGPC), for $15.5 billion.

In 2022, Aramco’s average hydrocarbon production was 13.6 million barrels of oil equivalent per day (mmboed), including 11.5 million barrels per day (mmbpd) of total liquids.

Aramco continued its strong track record of supply reliability by delivering crude oil and other products with 99.9% reliability in 2022. It was the third year running that Aramco achieved this level of reliability.

Upstream continues to execute its growth plans to promote long-term productivity of Saudi Arabia’s reservoirs and is proceeding with implementing the Government’s mandate to increase Aramco’s crude oil MSC to 13.0 mmbpd by 2027.