Saudi Aramco defies profit slump with record $100 billion dividend

Saudi Aramco announced its 2023 fiscal results, revealing a 25% drop in profit to $121.3 billion, down from $161.1 billion in 2022.

Despite the financial setbacks, Saudi Aramco chose to raise its dividend for the last quarter by 4%, amounting to over $20 billion. The performance-dependent part of the dividend will see a 9% increase to $10.8 billion. Consequently, the Saudi government and company shareholders are set to receive around $31 billion, as per CNBC's calculations.

The company attributed the decline in profit to lower oil prices and sales volumes, alongside reduced refinery margins. Yet, oil remains highly sought after.

"This year saw unprecedented global demand for oil, despite the economic challenges, inflation, and geopolitical uncertainties. We anticipate the global oil market will continue to be robust," asserted Amin Nasser, CEO of Saudi Aramco, during a Sunday press conference.

Detailed reports show the company's total revenue fell by 17% to $441 billion, from $535 billion the previous year.

The 2023 dividends paint an interesting picture, totalling almost $100 billion ($97.8 billion to be exact), marking a 30% increase from 2022.

This surge in dividend payments is crucial for the nation. "The revenue is a primary source of income for Crown Prince Mohammed bin Salman, who aims to use the oil profits to fund an expansive modernization plan for the kingdom and diversify its economy," highlighted the "Financial Times".

Saudi Aramco acquired a stake in the Gdańsk Refinery through the merger of PKN Orlen and Lotos, controlling 50% of the refinery's gasoline and diesel output.

On January 22 of this year, the Płock district prosecutor's office initiated an investigation into the merger between Orlen and the Lotos Group.

The probe focuses on allegations of authority abuse and neglect by members of the PKN Orlen board, among other concerns.

According to a report by the Supreme Audit Office, the sale of Lotos assets was undervalued by at least 5 billion PLN ($1.24 billion), resulting in the loss of control over approximately a fifth of the gasoline and diesel market.

The Supreme Audit Office believes the investment in the refinery will become profitable for Aramco within 15 months, based solely on product sales margins.

The merger necessitated divestiture to meet the European Commission's approval conditions. Warsaw and the Saudis reached a deal where Orlen sold 30% of its Gdańsk refinery shares to Saudi Aramco, ensuring continued oil supplies for Poland.

Controversy surrounds these decisions, particularly concerns about contractual terms safeguarding Polish interests in potential future sales and the sale price of the refinery. Additional worries include Saudi Arabia's relations with Russia and their cooperation within OPEC+.