Saudi Aramco's full-year profit more than doubles on soaring oil prices

DUBAI (REUTERS) - Saudi Arabia's state oil company Aramco, under pressure from the West to boost output amid soaring prices, pledged on Sunday (March 20) to hike investments by around 50 per cent this year as it reported a more than doubling in 2021 profits.

Saudi Aramco benefited from a more than 50 per cent surge in oil prices last year as increased Covid-19 vaccination rates and loosening restrictions resulted in demand outpacing supply.

Prices then leapt above US$100 a barrel last month to hit 14-year highs after Russia invaded Ukraine, leading Western nations to urge Saudi Arabia and other producers to raise output.

Aramco said it aimed to boost its capital expenditure (capex) to US$40 billion to US$50 billion (S$54 billion to S$68 billion) this year, with further growth expected until around the middle of the decade. Capex was US$31.9 billion last year, up 18 per cent from 2020 - indicating an increase of about 50 per cent for this year at the middle of the guidance range.

The company posted a 124 per cent jump in 2021 net profit to US$110 billion, up from US$49 billion a year earlier. Analysts had expected a net profit of US$106 billion, according to the mean estimate of analysts on Refinitiv's Eikon.

Aramco shares surged more than 4 per cent in early trade to a high of 43.85 riyals, valuing the company at 8.76 trillion riyals (S$3.2 trillion).

A US$2 trillion valuation was a goal sought by de facto Saudi leader, Crown Prince Mohammed bin Salman, before the company's record US$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 US$2.68 trillion.

The Saudi government said last month that Crown Prince Mohammed, who is leading a huge investment drive to diversify the kingdom's economy, had transferred 4 per cent of Aramco shares to the country's sovereign wealth fund.