Integrated indicators of companies' efficiency in petroleum industry

Research output: Contribution to journalConference articlepeer-review

Abstract

Petroleum companies have leading roles in modern economy, as their financial and economic performance to a large extent form the economies of petroleum producing countries. With the background of highly volatile petroleum markets and increasing inter-fuel competition, it is essential for the companies to find an optimal strategy for the long-term sustainable growth. The research aims a comprehensive study of set of indicators reflecting the performance of companies in the oil and gas industry (on an example of Russia). At the first stage of the research overall dynamics of the financial performance of companies is analyzed. Main influencing factors, such as resource base, foreign trade, organizational and institutional structure are revealed. Then main financial indicators for the companies are evaluated and main trends are analyzed. At the final stage based on the calculated integrated indicators companies are divided into groups by their overall development strategies. The methods of the research include evaluation of the main financial indicators, such as profitability of sales, tax burden, ratio of revenue to production, ratio of operating expenses to production, share of net profit in ton of oil produced, economic efficiency of capital investments, etc.; as well as approaches for formation of an integrated indicator. The results of the study allow a comparative analysis of the performance of oil and gas companies taking into account the time factor, as well as calculate the integral values for the industry as a whole. The authors identified three development strategies for Russian oil and gas companies, reflecting a predominant focus on the processing sector and the supply of final products in Russia and abroad or on export of raw materials, as well as a strategy of the balance structure of production and financial indicators. The first group is characterized by high operating expenses, a relatively low level of tax deductions and profits. The second group shows by relatively low transaction costs, as well as a high level of taxation and profit. The last group is characterized by a fairly balanced structure of operating payments in the structure of revenue, tax payments, net profit. Dynamic analysis of the integrated indicator allows for recommendation on companies policy for sustainable growth.

Original languageEnglish
Pages (from-to)309-316
Number of pages8
JournalInternational Multidisciplinary Scientific GeoConference Surveying Geology and Mining Ecology Management, SGEM
Volume2020-August
Issue number5.2
DOIs
Publication statusPublished - 2020
Event20th International Multidisciplinary Scientific Geoconference: Ecology, Economics, Education and Legislation, SGEM 2020 - Albena, Bulgaria
Duration: 18 Aug 202024 Aug 2020

Keywords

  • Balanced development
  • Economical efficiency
  • Financial indicator
  • Integrated indicator
  • Petroleum company

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