Saudi oil giant Aramco on Tuesday reported a first-quarter net income of $31.9 billion, down by 19% from the first quarter of 2022 as macroeconomic concerns dragged down oil prices between January and March 2023.
Aramco still beat a median analyst estimate of $30.8 billion in net profit compiled by Refinitiv.
The company’s average realized crude oil price dropped to $81.0 per barrel in the first quarter of 2023, down from $97.7 a barrel in the same period of 2022.
Capital expenditures rose to $8.746 billion from $7.583 billion, driven by higher spending on boosting Saudi Arabia’s maximum sustainable production capacity to 13 million barrels per day (bpd) and the development of natural gas projects, Aramco said.
Apart from the regular dividend of $19.5 billion for the first quarter to be paid in the second quarter, the world’s largest oil firm by both production and market capitalization announced its intention to introduce a mechanism for performance-linked dividends in addition to the base dividend it currently distributes.
“The Company intends to target such performance-linked dividends to be in the amount of 50-70% of the Group’s annual free cash flow, net of the base dividend and other amounts including external investments, to be determined with the annual results,” Aramco said.
“We are also moving forward with our capacity expansion, and our long-term outlook remains unchanged as we believe oil and gas will remain critical components of the global energy mix for the foreseeable future,” President and CEO Amin Nasser commented, reiterating Aramco’s view that oil and gas will be in demand for decades to come.
Saudi Aramco booked a record net profit of $161.1 billion for 2022, up from $110 billion a year earlier, as it capitalized on the surge in oil prices last year.
Despite the decline in oil and gas prices between January and March this year, all of Big Oil, including U.S. supermajors ExxonMobil and Chevron, reported first-quarter earnings beating analyst estimates, thanks to higher production, strong trading results, and still relatively high refining margins.