Pumping profits
Saudi Aramco reported a 25% drop in profits yesterday, as lower oil prices filtered through to a shrunken bottom line for the state-controlled oil giant, which is 95% owned by Saudi Arabia. However, after Aramco's record-breaking $161bn profit last year — the largest ever for a public company — even a 25% decline leaves an eye-watering sum of $122bn, more than triple what US oil giant ExxonMobil managed.
The bottom LINE
Aramco is set to distribute some $98bn of that profit as dividends this year, enriching the Saudi state’s already overflowing coffers. In addition to high profile investments in soccer, golf, tennis, and other global sports, the country is also investing in wildly ambitious development projects as part of the Vision 2030 plan, which seeks to diversify the country's economy away from fossil fuels.
Most notable of these projects is THE LINE: Saudi’s ongoing construction of a 110-mile-long futuristic (or dystopian, depending on your point of view) city. The bill for that ambitious build is thought to be anywhere from $100-200bn, but some experts have pegged it as high as $1 trillion. And THE LINE is just 1 of many developments that the Kingdom of Saudi Arabia is planning in Neom. There are also plans for a town centered around a golf course, a wellness retreat, a beach club, and many more designs that wouldn’t look out of place in an Avatar 3 teaser trailer.
To make these dreamlike structures a reality, though, Aramco needs to keep the oil profits flowing.
