DUBAI, March 20 — Saudi Arabia’s state oil company Aramco, under pressure from the West to boost output amid soaring prices, pledged today to hike investments by around 50 per cent this year as it reported a doubling in 2021 profits.

Saudi Aramco benefitted 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 (RM419) 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$40-50 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 made US$110 billion in net profit last year, 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 over 4 per cent in early trade to a high of 43.85 riyals, valuing the company at 8.76 trillion riyals (RM9.8 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 initial public offering in 2019.

He has announced plans to sell more Aramco shares.

The surge in Aramco’s valuation today 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.

Boosting capex

Aramco has said it plans to raise its crude oil "maximum sustainable capacity” to 13 million barrels a day by 2027, and wants to boost gas production by more than 50 per cent by 2030.

The company’s average hydrocarbon production was 12.3 million barrels of oil equivalent per day last year.

Aramco also plans to develop a significant hydrogen export capability and become a global leader in carbon capture and storage technology, it said.

"Although economic conditions have improved considerably, the outlook remains uncertain due to various macro-economic and geopolitical factors,” CEO Amin Nasser said in a statement.

"But our investment plan aims to tap into rising long-term demand for reliable, affordable and ever more secure and sustainable energy.”

Aramco said its free cash flow was US$107.5 billion last year, compared with US$49.1 billion in 2020. It declared a dividend of US$75 billion for 2021, in line with its earlier pledge. — Reuters