By Saeed Azhar and Maha El Dahan

DUBAI(Reuters) – Saudi Arabia’s state oil firm Aramco, below strain from the West to spice up output amid hovering costs, pledged on Sunday to hike investments by round 50% this yr because it reported a doubling in 2021 income.

Saudi Aramco (SE:) benefitted from a greater than 50% surge in oil costs final yr, as elevated COVID-19 vaccination charges and loosening restrictions resulted in demand outpacing provide.

Costs then leapt above $100 a barrel final month to hit 14 yr highs after Russia invaded Ukraine, main Western nations to induce Saudi Arabia and different producers to boost output.

Aramco mentioned it aimed to spice up its capital expenditure (capex) to $40-50 billion this yr, with additional progress anticipated till across the center of the last decade. Capex was $31.9 billion final yr, up 18% from 2020 – indicating a rise of about 50% for this yr on the center of the steering vary.

The corporate made $110 billion in web revenue final yr, up from $49 billion a yr earlier. Analysts had anticipated a web revenue of $106 billion, in line with the imply estimate of analysts on Refinitiv’s Eikon.

Aramco shares surged over 4% in early commerce to a excessive of 43.85 riyals, valuing the corporate at 8.76 trillion riyals ($2.34 trillion).

A $2 trillion valuation was a aim sought by de-facto Saudi chief Crown Prince Mohammed bin Salman earlier than the corporate’s document $29.4 billion preliminary public providing in 2019.

He has introduced plans to promote extra Aramco shares.

The surge in Aramco’s valuation on Sunday moved it above that of Microsoft (NASDAQ:), although it stays behind Apple (NASDAQ:)’s $2.68 trillion.

The Saudi authorities mentioned final month that Crown Prince Mohammed, who’s main an enormous funding drive to diversify the dominion’s financial system, had transferred 4% of Aramco shares to the nation’s sovereign wealth fund.

BOOSTING CAPEX

Aramco has mentioned it plans to boost its “most sustainable capability” to 13 million barrels a day by 2027, and needs to spice up gasoline manufacturing by greater than 50% by 2030.

The corporate’s common hydrocarbon manufacturing was 12.3 million barrels of oil equal per day final yr.

Aramco additionally plans to develop a major hydrogen export functionality and develop into a world chief in carbon seize and storage expertise, it mentioned.

“Though financial situations have improved significantly, the outlook stays unsure as a consequence of varied macro-economic and geopolitical elements,” CEO Amin Nasser mentioned in an announcement.

“However our funding plan goals to faucet into rising long-term demand for dependable, inexpensive and ever safer and sustainable power.”

Aramco mentioned its free money movement was $107.5 billion final yr, in contrast with $49.1 billion in 2020. It declared a dividend of $75 billion for 2021, consistent with its earlier pledge.

($1 = 3.7515 riyals)

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