Saudi state oil producer Aramco reported on Tuesday a decline in net profit to $106.2 billion in 2024, down from $121.3 billion in 2023.
The company said it expects total dividends for 2025 of $85.4 billion — a significant fall from 2024’s total of $124.2 billion.
This comes as it cut its total payout for the fourth quarter. The oil giant said its base dividend for the final three months of the year would be increased to $21.1 billion, but its performance-linked payout would be just $200 million. This compares to a third-quarter base dividend of $20.3 billion and a performance-linked dividend of $10.8 billion.
Lower oil prices hit the company’s net profit last year as crude production around the world increased and demand slowed. Amarco’s realized oil price — the final price the company receives for selling its crude after accounting for transport costs and other factors — dropped to $80.2 per barrel in 2024 from $83.6 the year prior.
Aramco’s revenue fell to $436.6 billion in 2024, compared to $440.8 billion the year before.
Full-year total borrowings at the company were up, rising to $319.3 billion in 2024 from $290.1 billion during the previous year. The company’s net debt, however, decreased from $102.8 billion in 2023 to $78 billion in 2024.
Aramco’s dividend, the highest in the world, has played a key role in beefing up Saudi Arabia’s state coffers. The announced cut will hit the kingdom’s budget deficit, which has been widening amid weaker oil prices and higher state spending on the megaprojects planned for Vision 2030, Saudi Crown Prince Mohammed Bin Salman’s multitrillion-dollar economic transformation campaign.
Saudi Aramco’s Ras Tanura oil refinery and oil terminal
Ahmed Jadallah | Reuters
Asked by CNBC’s Dan Murphy about what investors can expect looking forward — especially given the drop in profit and dividends — Aramco CEO Amin Nasser highlighted the company’s investments in downstream production and gas as sources of strength and increased revenue.
Nasser said 2024 was “not a good year globally,” especially for downstream production, but added: “If you look at going forward, with the operating cash flow, because of our investment which started a couple of years back, the broader investment in gas and downstream, we are expecting an additional cash flow that will come from these investments for about $17-$20 billion by 2030, from downstream alone.”
The CEO also said he expected an increase in crude production from the OPEC+ producer alliance to be rolled out in the next 18 months, which should benefit Aramco, and flagged the company’s capacity to add significant quantities of oil to the market in the event of supply disruptions.
“Upstream, we see what happened in 2022 [following Russia’s invasion of Ukraine] — anytime there is an additional demand or interruptions or any geopolitical events, and there is a need to increase production, we have the capacity to put 3 million barrels in the market, readily available, and that is significant,” he said. “[If] there is a need to put it into the market that will also give you a huge upside.”
