Financial and operational efficiencies of national and international oil companies: An empirical investigation

Al-Mana, Ali A.; Nawaz, Waqas; Kamal, Athar; Koҫ, Muammer

doi:10.1016/j.resourpol.2020.101701

Cited by 16 publications

(9 citation statements)

References 21 publications

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“…Many studies have emerged analyzing the differences in ownership, efficiency, and environmental behavior between IOCs and NOCs (Al‐Mana et al, 2020; Al‐Obaidan & Scully, 1992; Cabrales et al, 2017; Gong, 2018, 2020; Ohene‐Asare et al, 2017; Sueyoshi & Goto, 2012; Wolf, 2009). However, the distinction between IOCs and NOCs is not straightforward over time.…”

Section: Diversified Companies Within Different Statesmentioning

confidence: 99%

Globalization and decarbonization: Changing strategies of global oil and gas companies

Guo

Yang

Bradshaw

et al. 2023

WIREs Climate Change

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Oil and gas (O&G) companies, as key players in the contemporary global energy landscape, have evolved within the context of a dynamic interaction between states and markets. However, their role is being transformed radically by two successive “global shifts”: economic globalization—driving energy demand growth patterns—and climate change—driving energy system transformation and decarbonization, both of which require them to reconsider their business strategies. Using an interdisciplinary lens that draws on human geography, strategy and international business, and international political economy, we propose an integrated conceptual framework for two periods—the 1990s–early 2010s and the post‐Paris Agreement era—to explore the nature of strategic responses by O&G companies to these global economic and environmental shifts. We illustrate the linkage of O&G companies' two strategies of (re‐)globalization and decarbonization by the aspects of production, finance, and knowledge as internal structures. Energy security is one of the priorities in the macro external environment. It is becoming increasingly difficult for O&G companies to deal with current dilemmas: climate goals require a significant reduction in fossil fuel production and consumption, and pressures from governments, nongovernmental organizations, and investors threaten the long‐term survival of O&G companies, while fossil fuel demand will remain high in the short to medium term. At the same time, the post‐pandemic recovery and Russia's war in Ukraine are resulting in a re‐assessment of the benefits of unfettered globalization. Therefore, global O&G companies face dual challenges in the new era of (re‐)globalization and decarbonization and need to make changes to ensure their future viability.This article is categorized under: The Carbon Economy and Climate Mitigation > Decarbonizing Energy and/or Reducing Demand

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Section: Diversified Companies Within Different Statesmentioning

confidence: 99%

Globalization and decarbonization: Changing strategies of global oil and gas companies

Guo

Yang

Bradshaw

et al. 2023

WIREs Climate Change

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“…Their findings revealed that the different objectives of IOCs and NOCs influenced the companies' efficiency. Moreover, in order to reach a consensus with regards to the effectiveness of a given ownership model in comparison to the other by estimating the operational and financial efficiency differentials of NOCs and IOCs, Al‐Mana, Nawaz, Kamal, and Koҫ (2020) used 10 indicators (three financial and seven operational) to perform four analyses (financial analysis, operational analysis, SFA and DEA) for a sample consists of 50 firms (composed of 16 NOCs and 34 IOCs) during 2002–2016. Their results suggest that, in general, IOCs perform better than NOCs but the role of privatisation on the performance and efficiency of NOCs remains contentious because some NOCs perform as well as the best IOCs.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Nevertheless, on average, it is safe to imply that privatisation may lead to improved performance and efficiency because shareholder-owned firms, generally, perform better than the national players. For that matter, even some partially privatised firms show evidence of better performance in comparison to NOCs (Al-Mana et al, 2020). Due to the specifics of the petroleum sector, the companies tend to be large and have a significant direct and indirect influence on the oil industry as a whole (Filimonova, Komarova, Provornaya, Dzyuba, & Link, 2020).…”

Section: Efficiency Of Oil and Gas Companiesmentioning

confidence: 99%

Operational and environmental efficiency of U.S. oil and gas companies towards energy transition policies: A comparative empirical analysis

Jarboui

2021

Australian Economic Papers

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Global warming and climate change have been critical global issues in recent years. The evaluation of environmental and operational efficiency would be an important first step towards sustainable development. Renewable energies are playing an increasingly important role in the energy sector. Following energy transition policies, oil and gas companies are gradually transforming into energy companies. First, this article measures the operational and environmental efficiency of 45 U.S. oil and gas companies over the period 2000–2018. Second, this research aims to assess the effect of renewable energies on the two types of efficiency. Two methods are used in this research: the true fixed‐ model applied for measuring the efficiency scores and evaluate the inefficiency determinants, and the system generalised method of moments approach to verify the effect of energy and environmental policy on both the types of efficiencies and to test the robustness of our results. The results reveal that the overall average operational efficiency (desirable output) of the U.S. oil and gas companies is 76% for a period of 19 years, while the overall average level of CO2 emissions efficiency (undesirable output) of the oil and gas companies is 79%. The results highlight that U.S. oil and gas companies have begun to transition to low CO2 emission in recent years. Furthermore, the biofuel, hydroelectric power, wind power and solar energy contribute to promote the environmental efficiency of oil and gas companies.

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“…To the best of our knowledge, the MPI studies under uncertainty are hedged in the DEA literature and received insufficient attention from both theoretical and practical viewpoints. There are also a few studies in which uncertain inputs and outputs data are assumed to be involved in the applications associated with the oil industry (Sueyoshi 2000 ; Eller et al 2011 ; Tavana et al 2019 ; Al-Mana et al 2020 ). Sueyoshi ( 2000 ) presented a stochastic DEA model to plan the restructuring strategy of a Japanese petroleum company.…”

Section: Introductionmentioning

confidence: 99%

“…Tavana et al ( 2019 ) introduced a novel fuzzy multi-objective multi-period network DEA model that was aimed to assess the dynamic efficiency of oil refineries when undesirable outputs are available. To compare the efficiency of NOCs and IOCs, Al-Mana et al ( 2020 ) employed an integrated framework containing four methods: SFA, DEA, financial, and operational analysis to ensure the validity of the obtained results as well as providing managerial implications. Table 1 shows a summary of those papers in the oil industry using DEA and MPI to measure economic efficiency and productivity in the presence of uncertainty.…”

Section: Introductionmentioning

confidence: 99%

Robust productivity growth and efficiency measurement with undesirable outputs: evidence from the oil industry

2022

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This paper aims to contribute to the contemporary and imperative research on the performance and productivity growth of the oil industry. Among cutting edge methods, frontier analysis is a successful approach that has been widely used to assess the efficiency and productivity of entities with multiple resources and multiple outputs. This study first develops a unique framework based upon data envelopment analysis (DEA) to measure efficiency and productivity in the way that it tackles the uncertainty in data and undesirable outputs and, in turn, provides useful information to decision-makers. An adaptive robust optimisation is utilised to combat uncertain data whose distributions are unknown and consider the nexus between the level of conservatism and decision-makers’ risk preference. The key advantage of the proposed robust DEA approach is that the results remain relatively unchanged when uncertain conditions exist in the problem. An empirical study on the oil refinery is presented in situations of data uncertainty along with considering CO 2 emissions as the undesirable output to conduct environmental efficiency and productivity analysis of the 25 countries over the period 2000–2018. The empirical results obtained from the proposed approach give some imperative implications. First, results show that the price of robustness does not affect identically for varying technologies when assessing productivity in a global oil market, and the USA oil industry is observed as the highest productivity growth in all cases confirming its efforts for the rapid rise in oil extraction and production at low costs. There may be practical lessons for other nations to learn from the USA oil industry to improve productivity. Findings also support a considerable regress during the 2008 Global Financial Crisis in the oil industry compared to the rest of the periods in question, and due to monetary and fiscal stimulus, there is a sharp productivity growth from 2009 to 2011. The other implication that can be drawn is that the GDP growth rate and technology innovation can more effectively improve the productivity of the oil industry across the globe. Supplementary Information The online version contains supplementary material available at 10.1007/s00291-022-00683-y.

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Financial and operational efficiencies of national and international oil companies: An empirical investigation

Cited by 16 publications

References 21 publications

Globalization and decarbonization: Changing strategies of global oil and gas companies

Globalization and decarbonization: Changing strategies of global oil and gas companies

Operational and environmental efficiency of U.S. oil and gas companies towards energy transition policies: A comparative empirical analysis

Robust productivity growth and efficiency measurement with undesirable outputs: evidence from the oil industry

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