Aramco Americas office. (Source: Aramco)
The Saudi Arabian Oil Company (Aramco) remains on track to pay out a dividend of $78 billion in 2023, compared to $75 billion in 2022 and an equal amount in 2021, the company said on its first quarter of 2023 webcast.
Aramco declared a cash dividend of SAR 73.2 billion, or US$19.5 billion, in the first quarter of 2023 and remains focused on creating shareholder value across business cycles, the company said May 9 in a separate first quarter press release.
In addition to this currently distributed base dividend, which Aramco looks to maintain as “sustainable and progressive,” the company will introduce a mechanism for performance-linked dividends to support its aim to “deliver a balanced mix of growth and yield to shareholders,” Aramco said in the release.
The Saudi energy giant is targeting performance-linked dividends of between “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,” the company said.
Aramco’s dividend policy is part of its operational and financial resilience, allowing it to “declare dividends on a regular basis with an aim on building long-term shareholder value and providing sustainable dividend growth through crude oil price cycles and to maintain a high investment-grade credit rating,” the company said in its annual report.
Massive first quarter of 2023 net income
Aramco reported net income of $31.9 billion in the first quarter of 2023, down 19% compared to $39.5 billion in the first quarter of 2022, owing mainly to lower oil prices due to geopolitical and macroeconomic events driving ongoing market volatility.
Total hydrocarbon production averaged 12.8 MMboe/d in the first quarter of 2023, the company said.
Despite the lower net income, Aramco “believes it is well-positioned to withstand fluctuating commodity prices through its low-cost upstream production and strategically integrated downstream operations, and continues to deliver robust earnings and cash flows,” the company said.
Looking forward, Aramco expects its compression projects at the Haradh and Hawiyah fields to achieve both initial production and full capacity this year, as well as its Haradh gas increment program to come on stream.
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