Saudi oil group Aramco to pay more to state despite profits drop
The Saudi government looks set to reap greater revenues from the state-backed oil group Saudi Aramco despite the company posting a near-20% fall in quarterly profits.
The world’s largest oil and gas company said on Tuesday that its profits had fallen by 19% in its first quarter compared with a year earlier, to nearly $32bn (£25bn), caused by a drop in oil prices.
The fall in profits provides a further sign that the worst of the energy crisis, which has squeezed household budgets, may have passed.
The profits still outstrip thenear $22bn recorded in the first quarter of 2021, before the energy crisis began later that year, and was later escalated by Russia’s invasion of Ukraine.
Oil prices have subsided from levels seen in 2022, but Aramco’s rivals, including BP and Shell, have posted strong first-quarter performances, helped by their trading divisions which bet that gas prices would fall sharply in early 2023. Oil and gas companies have been repeatedly accused of profiteering at the expense of consumers during the energy crisis.
Despite the fall in profits, Aramco’s shares rose 4% after the company said it would introduce performance-linked dividends.
The move means Aramco will distribute two forms of payout to shareholders, with a performance-linked dividend on top of a base payout. The company set a target of paying out 50% to 70% of its cashflow each year.
Increasing payouts to shareholders would increase revenues for the Saudi government, which holds more than 90% of the stock and draws on the country’s vast desert oil resources as huge source of wealth.
Aramco said: “Global crude oil prices declined in the first quarter of 2023 mainly driven by macroeconomic events contributing to market volatility. Aramco believes it is
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