RIYADH: Fitch Ratings upgraded Saudi Aramco’s long-term foreign and local currency Issuer Default Ratings thanks to the company’s strong business profile and solid ambitions to deliver a sustainable and progressive dividend. The rating agency upgraded the global energy giant’s rating to ‘A+’ from ‘A’, with a stable outlook. Saudi Aramco is the world’s largest oil producer and the national oil corporation of Saudi Arabia. It has a significant pre-dividend free cash flow generation, safe financial strategies and a net cash position. Its business profile is characterized by large-scale production, massive reserves, low output costs, and development into downstream and petrochemicals. Its upstream operations are focused on a single country, and its operations are oriented toward crude oil production when compared to global oil and gas companies. “We assess status, ownership, and control, and support track record as ‘strong’ as Saudi Aramco is majority-owned by the government of Saudi Arabia,” Fitch Ratings said. “We view the socio-political or financial implications of the company’s default as ‘very strong’ due to Saudi Aramco’s key role in the Saudi Arabian economy as a key purveyor of feedstock to the country’s power generation fleet and other key end-markets,” the rating agency continued. Saudi Aramco’s annual capital expenditure grew to $38 billion last year, up from $32 billion in 2021, which is an 18 percent increase, and is expected to rise further between $45 billion to $55 billion in 2023. The increase is largely due to Saudi Aramco’s efforts to increase maximum sustainable capacity by 1 million barrels of oil per day by 2027, as mandated by the government, as well as other strategic initiatives such as gas production, liquids to chemicals production and green projects. Additionally, Saudi Aramco is investing in natural gas production, which is predicted to increase by more than 50 percent by 2030, renewables, blue ammonia and liquids-to-chemicals facilities. This risk is mitigated in part by Saudi Aramco"s low-cost base. Earlier this month, Fitch raised Saudi Arabia"s long-term foreign-currency default rating to A+ from A, with a stable outlook. During a session organized as part of the Saudi Green Initiative Forum in October 2021, CEO Amin Nasser said that Saudi Aramco will become a net-zero carbon energy producer by 2050 and that the company will replace crude burning for power with natural gas in 10 years.