STRANDED ASSETS AND SOVEREIGN STATES

2020 ◽  
Vol 251 ◽  
pp. R25-R36
Author(s):  
Amy Myers Jaffe
Keyword(s):  
Oil And Gas ◽  
Publicly Traded ◽  
Stock Valuation ◽  
Oil Companies ◽  
Asset Risk ◽  
To Come ◽  
Oil And Gas Companies ◽  
Oil And Gas Sector ◽  
Opening Up ◽  
Financial Losses

There is evidence that the risk of stranded assets in the oil and gas sector is underpriced in financial markets. Publicly traded Western oil and gas companies are starting to write down assets, opening up the possibility that more rationalisation of value is likely to come. To the extent that large oil companies diversify portfolios to include cleaner energy and carbon sequestration technologies, it could reduce the risk of a sudden cascading change in the stock valuation of these firms and related bond and credit markets. Instead, the vast majority of oil and gas assets that will be stranded are in the control of sovereign states whose national budgets are highly dependent on oil and gas revenues. Thus, the problem of stranded asset risk for the oil and gas sector may be most relevant in markets for sovereign credit as well as risks that go beyond financial losses.

scholarly journals Problems of Innovative Development of Oil Companies: Actual State, Forecast and Directions for Overcoming the Prolonged Innovation Pause

Energies ◽  
2021 ◽  
Vol 14 (4) ◽  
pp. 837
Author(s):  
Yana Matkovskaya ◽  
Elena Vechkinzova ◽  
Yelena Petrenko ◽  
Larissa Steblyakova
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Graphical Analysis ◽  
Actual State ◽  
Innovative Development ◽  
Gas Industry ◽  
Oil Companies ◽  
Oil Sector ◽  
Oil And Gas Companies ◽  
Oil And Gas Sector

The study of the rates of innovative development of various sectors of the modern economy makes it possible to determine the existence of a scientific and practical problem, eliciting the need for urgent identification of the reasons for non-innovative development of Oil and Gas Companies and development of the directions for innovation development. Based on a number of methods, including methods of graphical analysis, time series forecasting, construction of linear trends, correlation analysis and scenario forecasting, the authors stated the fact of the serious depth of the problem of innovative insufficiency in the oil sector in comparison with other sectors and they built six scenarios for the development of these companies. The applied methods made it possible to not only come to the conclusion that with the current level of investment in R&D in the oil and gas sector, Oil Companies may find themselves in difficult conditions, especially if breakthrough technologies show themselves in the non-hydrocarbon energy of the future, but also made it possible to determine the most important directions for the development of Oil Companies, including the formation and development of the oil and gas industry 4.0, marketing strategic management of the activities of these companies.

Specific financial and stock indicators as a sign of investment attractiveness of domestic vertically integrated companies

2021 ◽  
Vol 20 (3) ◽  
pp. 529-553
Author(s):  
Oleg V. SHIMKO
Keyword(s):  
Stock Market ◽  
Oil And Gas ◽  
Raw Materials ◽  
Publicly Traded ◽  
Consolidated Financial Statements ◽  
Hydrocarbon Production ◽  
Exploration And Production ◽  
Net Revenue ◽  
Oil And Gas Companies ◽  
Oil And Gas Sector

Subject. The article considers the specific financial and stock market indicators of the 25 biggest oil and gas companies from 2006 to 2018. Objectives. The aim is to identify key trends in the specific financial and stock market indicators of leading publicly traded oil and gas companies and reveal the factors that have led to this transformation, during the study period. Methods. The study draws on methods of comparative, financial, and economic analysis, as well as generalization of materials of consolidated financial statements. Results. The study established that the prolonged industry crisis had the strongest impact on the group’s performance, and independent companies were the most affected. Negative trends were evident in the period of high oil prices, when specific capital expenditures in the exploration and production sector increased, while profitability and market appreciation of the barrel of production declined. The industry crisis only aggravated the situation in the industry. It was revealed that the processing of purchased raw materials, as well as the resale of products, may have a significant impact on the specific net revenue from core activities. The study identified that having a serious difference in the level of debt, it is better to use an indicator of company's market value, rather than capitalization. Conclusions. There is a decrease in the specific profitability of hydrocarbon production in the stock market segment of the industry. It has an adverse effect on the market attractiveness of the oil and gas sector.

Analyzing the figures of consolidated statement of cash flows of the world's biggest publicly traded oil and gas corporations

2020 ◽  
Vol 19 (6) ◽  
pp. 1101-1120
Author(s):  
O.V. Shimko
Keyword(s):  
Public Sector ◽  
Cash Flow ◽  
Oil And Gas ◽  
Cash Flows ◽  
Annual Reports ◽  
Capital Expenditures ◽  
Publicly Traded ◽  
The Public ◽  
Statement Of Cash Flows ◽  
Oil And Gas Companies

Subject. The article investigates key figures disclosed in consolidated cash flow statements of 25 leading publicly traded oil and gas companies from 2006 to 2018. Objectives. The focus is on determining the current level of values of the main components of consolidated statement of cash flows prepared by leading publicly traded oil and gas companies, identifying key trends within the studied period and factors that led to any transformation. Methods. The study draws on methods of comparative and financial-economic analysis, as well as generalization of materials of consolidated cash flow statements. Results. The comprehensive analysis of annual reports of 25 oil and gas companies enabled to determine changes in the key figures and their relation in the structure of consolidated cash flow statements in the public sector of the industry. It also established main factors that contributed to the changes. Conclusions. In the period under study, I revealed an increase in cash from operating activities; established that capital expenditures in the public sector of the industry show an overall upward trend and depend on the level of oil prices. The analysis demonstrated that even integrated companies’ upstream segment prevail in the capital expenditures structure. The study also unveiled an increase in dividend payments, which, most of the time, exceeded free cash flows thus increasing the debt burden.

scholarly journals Impact of changes in economic pressures on the activities of foreign oil and gas companies in Venezuela

2021 ◽  
Vol 29 (2) ◽  
pp. 312-323
Author(s):  
Elmira A. Chadaeva ◽  
Elvis Ojeda Kalluni
Keyword(s):  
Oil And Gas ◽  
State Regulation ◽  
Strategic Partnerships ◽  
Oil Companies ◽  
Foreign Companies ◽  
Slowing Down ◽  
Tax Legislation ◽  
Tax Regimes ◽  
Exxon Mobil ◽  
Oil And Gas Sector

The article discusses several new laws in the oil and gas sector of Venezuela, which appeared at the beginning of the 21st century. It also presents the tax regimes in this area of the country and the types of tax and economic burdens that apply to these regimes; highlights the main problematic aspects of changes in tax legislation and the consequences on the activities of foreign companies and the development of the oil and gas sector of the country as a result of such changes. It is concluded that the increase in state revenues not solve the problem of attracting investments in the oil and gas sector of the country, and only scare off a large company in the future (Exxon Mobil and ConocoPhillips have left the Venezuelan market), resulting in a fall in production at the country, its government revenues, and then slowing down economic growth in the country. As an alternative approach to improving state regulation and the conduct of the oil business in the country, the options for improving this situation are presented: to increase the share of foreign companies in strategic partnerships; review the tax system for oil companies; allow some programs to be implemented directly by foreign companies; and propose new distribution and profitability schemes that will adapt to the current international hydrocarbon market.

scholarly journals ACCOUNTING INFORMATION QUALITY AND CORPORATE PERFORMANCE OF OIL AND GAS COMPANIES IN NIGERIA

2021 ◽  
pp. 25-44
Author(s):  
T.C. Macgregor ◽  
J.N Nwaiwu
Keyword(s):  
Information Quality ◽  
Oil And Gas ◽  
Corporate Performance ◽  
Accounting Information ◽  
Return On Equity ◽  
Oil Companies ◽  
Qualitative And Quantitative ◽  
Accounting Information Quality ◽  
Oil And Gas Companies ◽  
The Relationship

But knowing the unknown and therefore estimating the relationship between accounting information quality and corporate performance are still a difficult task. The aim of this empirical study is to explore the relationship between the accounting information quality and corporate performance of oil and gas companies in Nigeria. Data on different types of accounting information quality and return on equity were primarily collected from the respondents and analyzed using ordinary least square regression analysis the data with the aid of statistical package for social sciences version 25.0. The empirical result indicates that accounting information quality significantly relate to return n equity; explaining about 85.1% of the total variation in return and equity. Relevance, faithful representation was each found to significantly relate to return on equity. The study empirically conclude that accounting information quality has the potency to make significant contribution to quoted financial performance of oil and gas companies and recommends that having investigated theoretical and empirical issues, also considering the findings and conclusion, the following recommendations were made: There should be need for preparers of accounting information to improve on the accounting information quality devoid of window dressing and creative accounting, regular disclosure, transparency and accountability of such accounting information is required since investors are sensitive to qualitative and quantitative accounting information in assessing the performance of quoted oil companies in and outside Nigeria. Also in line with qualitative and quantitative of accounting information quality, financial statements of quoted oil companies in Nigeria should be prepared and presented according to laid down regulations and ethical standards duly observed to ensure accounting information presented for among users, most and public consumption do represent the oil companies’ economic reality during reported periods.

scholarly journals DETERMINATION OF THE SUSTAINABILITY OF THE PROJECT PORTFOLIO OF THE OIL AND GAS SECTOR OF THE ECONOMY TO EXTERNAL FACTORS

2021 ◽  
pp. 32-40
Author(s):  
L.S. Leontieva ◽  
◽  
E.B. Makarova ◽  
Keyword(s):  
Oil Recovery ◽  
Portfolio Management ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
External Factors ◽  
Project Portfolio ◽  
Project Portfolio Management ◽  
Oil And Gas Companies ◽  
Oil And Gas Sector

The oil and gas sector of the economy in many states remains the main source of foreign exchange and tax revenues to the budget. Moreover, its share, for example, in Russia, accounts for about 12 % of all industrial production. However, this sector, as the practice of world oil prices shows, is experiencing not only a rise, but also a decline. Consequently, the problem of forming a balanced portfolio of oil and gas assets is an object of close attention on the part of national oil and gas companies. The issues of choosing the optimal combination of oil and gas assets in the portfolio are no less urgent, especially among the tasks that all oil and gas companies face, both in Russia and abroad. An investment portfolio or a portfolio of oil and gas assets, which includes new projects for the commissioning of fields, as well as measures to enhance oil recovery, and exploration are objects of real investment. The high volatility of the oil and gas industry is influenced by various factors, including: macroeconomic, innovation risks and a number of others. These circumstances stimulate the sector to increase the resilience of its project portfolios in order to respond flexibly to changes. In an increasingly challenging and uncertain environment, oil and gas companies around the world face constant pressures as difficult strategic decisions and building long-term plans lead to a sustainable portfolio. In order to achieve their goals and maximize profitability, companies should apply certain algorithms in their practice. The article substantiates the role and importance of project portfolio management in achieving the goals of the state and companies in the oil and gas sector. The main goal of the article is to build an algorithm that is aimed both at determining the stability of the portfolio and the ability to flexibly respond to changes in the environment. The scientific novelty of the research lies in the determination of an algorithm for assessing the sustainability of a portfolio of projects of oil and gas companies. Application of this algorithm will allow oil and gas companies to take into account the influence of external factors. The research methodology is based on such methods as analysis of internal regulations and reporting of companies for project portfolio management, risk analysis, project ranking; grouping and classification method.

FEATURES OF THE FORMATION OF AN INVESTMENT PORTFOLIO BY RUSSIAN COMPANIES IN THE OIL AND GAS SECTOR OF THE ECONOMY

2021 ◽  
Vol 1 (175) ◽  
pp. 161-166
Author(s):  
V.A. Agusev ◽  
Keyword(s):  
Oil And Gas ◽  
Investment Portfolio ◽  
Investment Projects ◽  
Foreign Companies ◽  
Oil And Gas Companies ◽  
Oil And Gas Sector

The article discusses the main methods of forming an investment portfolio and examines the motives for partnerships with foreign companies. During the analysis of the activities of Russian oil and gas companies, the features of the formation of investment projects were revealed.

The rise of shareholder activism—what you need to know

2015 ◽  
Vol 55 (2) ◽  
pp. 448
Author(s):  
Mark Malinas
Keyword(s):  
Oil And Gas ◽  
Shareholder Activism ◽  
Share Price ◽  
Strategic Direction ◽  
The Us ◽  
Dramatic Rise ◽  
Under Performing ◽  
And Performance ◽  
Oil And Gas Companies ◽  
Oil And Gas Sector

The past few years have seen a dramatic rise in shareholder activism in Europe and the US and it is a trend becoming more common in Australia. Companies operating in the oil and gas sector have been subject to particular attention and there are a growing number of examples of this in Australia. The targets of shareholder activism range in size and performance, but are often companies with perceived board weakness, those that are considered to adhere to outdated corporate governance, those whose strategic direction is in question or those that have an under-performing share price, though other factors can also be relevant. Using these issues or concerns as a pretext, activists are increasingly focused on using tactics that allow them to exert control or exercise influence to realise returns or agitate for change in companies that: have significant assets (such as oil and gas reserves) relative to their market value; have high costs, large capital expenditures and long revenue generation lead time (such as exploration projects); or, operate in low growth or fluctuating markets (such as with the price of oil and gas). Unsurprisingly, the oil and gas sector is being increasingly seen by certain funds and investors as fertile ground for shareholder activism. The Australian legal landscape also presents shareholders with a platform from which to exert influence. For instance: shareholders are able to requisition general meetings (and resolutions to be put to those meetings) if they hold sufficient shares and put the entire board up for re-election following the introduction of the two strikes rule; and, directors are required to adhere to statutory and common law duties in responding to shareholders. Shareholder activist campaigns are often played out in public and can be highly disruptive to companies’ operations. Accordingly, directors and senior management of oil and gas companies should be aware of shareholder activism in Australia and, in the broader interests of all shareholders and their company, consider how they should respond or be ready to respond. This may be done through various processes, including testing the company’s perceived weaknesses and addressing them and having a plan to address activism should it arise.

Comparative analysis of the efficiency of oil–producing companies in Russia and the world

2020 ◽  
Author(s):  
Arina E. Link ◽  
◽  
Mikhail V. Mishenin ◽  
Keyword(s):  
Comparative Analysis ◽  
Oil And Gas ◽  
Distinctive Features ◽  
Foreign Companies ◽  
The World ◽  
Tax Deductions ◽  
Cost Of Production ◽  
Oil And Gas Companies ◽  
First Time ◽  
Oil And Gas Sector

The study compares domestic and foreign companies in the oil and gas sector for the first time and identifies the distinctive features of each group. The results of calculations showed that the profit of any large oil and gas company is affected by revenue, cost of production and the amount of tax deductions. Moreover, the refinancing rate of the country where the company is registered is important for the activities of oil and gas companies.

U.S. oil company stock returns and currency fluctuations

2015 ◽  
Vol 41 (9) ◽  
pp. 974-994 ◽  
Author(s):  
Andre Mollick ◽  
Khoa H Nguyen
Keyword(s):  
Financial Crisis ◽  
Stock Returns ◽  
Structural Breaks ◽  
Oil And Gas ◽  
Global Financial Crisis ◽  
Oil Price ◽  
Content Type ◽  
Oil Companies ◽  
Daily Data ◽  
Oil And Gas Sector

Purpose – The purpose of this is paper is to pay a closer look at the 2008-2009 financial crisis (and its aftermath) and analyzes stock returns of nine major US oil companies as well as the oil and gas sector under daily data from January 1992 to April 2012. Design/methodology/approach – The authors adopt the arbitrage pricing theory model to examine the relationship between stock returns and their influences including oil price return, yield spreads, and US dollar index return. The authors also provide a test for structural changes in each regression model of return series to capture for multiple breaks. To examine the asymmetric effect of oil price returns on stock returns, the authors separate oil price returns series into two series: positive changes in oil price and negative changes in oil price. Findings – The authors find stock returns of oil companies as well as the oil and gas sector are positively affected by oil prices and have stronger effects in the downward direction. Interestingly, The authors find the effects of oil price movements on stock returns increase over time. The authors examine the possibility that investors wishing to hedge against a weakening USD invest in US oil companies and find that more than half of these companies benefit from a weaker USD against the JPY, while all strongly benefit from a weaker USD against major currencies. Originality/value – The authors employ daily data for two-decade period including the last global financial crisis. Due to the long-term period covered in this study, sequential Bai-Perron tests are used to detect structural breaks of stock return series. In addition, the data-dependent procedures result in good specifications throughout with white-noise processes in almost all cases.

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