Saudi Arabia: Aramco’s profits, largest ever by a company, should help fund transition to renewables

Saudi Arabia: Aramco’s profits, the largest ever by a company, should support funding a global transition to renewable energy

The US$161.1 billion annual profit posted today by the Saudi Arabian state-backed oil company Saudi Aramco, the most ever disclosed by a company in a single year, should be used to fund a human rights-based transition to renewable energy, Amnesty International said.

Agnès Callamard, Amnesty International’s Secretary General, said: “It is shocking for a company to make a profit of more than US$161 billion in a single year through the sale of fossil fuel – the single largest driver of the climate crisis. It is all the more shocking because this surplus was amassed during a global cost-of-living crisis and aided by the increase in energy prices resulting from Russia’s war of aggression against Ukraine.”

The Saudi Arabian government and the Public Investment Fund (PIF), its sovereign wealth fund, own more than 98% of Saudi Aramco, making the company, through the dividends and taxes it pays, a major source of the Kingdom’s income, wealth, and influence.

“It is past time that Saudi Arabia acted in humanity’s interest and supported the phasing out of the fossil fuel industry, which is essential for preventing further climate harm,” said Agnès Callamard.

Amnesty International supports the countries of Vanuatu and Tuvalu, the European Parliament, the World Health Organization, and thousands of civil society organizations urging the development of a legally binding Fossil Fuel Non-Proliferation Treaty. Governments must also agree to phase out the use and production of all fossil fuels at the COP28 climate talks later this year. A rapid and just energy transition to renewable alternatives has never been more urgent.

Enormous wealth and a shameful human rights record

Saudi Arabia’s government has an extensive and appalling record of human rights abuses, including executions, arbitrary arrests, detention without trial, torture, the suppression of free assembly and free expression, discrimination based on gender, and the criminalization of LGBTI people. Its forces are fighting in neighbouring Yemen, where they have committed possible war crimes and breaches of humanitarian law.

The Kingdom, largely through the PIF, has recently spent billions on sportswashing by purchasing tournaments, events and football clubs to distract from this dire catalogue of abuses.

“We urge Saudi Arabia’s government and the PIF to take this opportunity to change course. These extraordinary profits, and any future income derived from Aramco, should not be deployed to finance human rights abuses, cover them up, or try and gloss over them through sports washing,” said Agnès Callamard.

“Aramco’s profits should be used for the benefit of the planet and its peoples. The profits could fund a just and human rights-based transition to renewable energy and further improve the lives of ordinary Saudi Arabians.”

Background

Saudi Aramco currently produces more than 12 million barrels of oil a day. It aims to increase its output by about a million barrels per day by 2027 and to increase its production of natural gas by 50% by 2030.

The oil and gas produced by Aramco have been estimated to be responsible for more than 4% of global greenhouse gas emissions since 1965, and according to a study, accounted for about 4.8% of all global greenhouse gas emissions in 2018 — the largest of any oil and gas company.

Aramco often claims its operational emissions are low compared to other major oil producers, but this is insignificant when the millions of barrels a day it pumps are still being consumed.

A small portion of its shares are listed on the Saudi Arabian stock exchange and a secondary listing on another stock market is reportedly being planned to attract international investment.

In February 2022, Mohammed bin Salman, Saudi Arabia’s crown prince and prime minister, transferred about 4% of Aramco’s shares, worth about US$80 billion, to the Public Investment Fund (PIF), which he chairs.

Projects and companies owned or linked to the PIF have been involved in serious human rights abuses, including during the development of NEOM, a ‘futuristic’ city, where there have been violent confrontations with tribes residing in the region and human rights abuses over land acquisition on the site.

In Saudi Arabia almost all human rights defenders, women’s rights activists, independent journalists, writers and critics have been arbitrarily detained and/or subject to prolonged unfair trials. In recent months, a brutal crackdown on freedom of expression has escalated, with individuals sentenced to prison terms of between 10 to 45 years for peaceful online expression.

Public questioning of the country’s economic management is forbidden. Essam al-Zamel, an entrepreneur and economist, who questioned the proposed public listing of Aramco shares, was arrested in 2017 and sentenced to 15 years in prison in October 2020.