scholarly journals Do Oil and Gas Risk Factors Matter in the Malaysian Oil and Gas Industry? A Fama-MacBeth Two Stage Panel Regression Approach

Energies ◽  
2020 ◽  
Vol 13 (5) ◽  
pp. 1154 ◽  
Author(s):  
Mohmmad Enamul Hoque ◽  
Soo Wah Low ◽  
Mohd Azlan Shah Zaidi
Keyword(s):  
Risk Factors ◽  
Exchange Rate ◽  
Risk Premium ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Oil Price ◽  
Panel Regression ◽  
Gas Industry ◽  
Systematic Risk Factors ◽  
Gas Price

This study examines whether oil and gas risk factors are priced in the returns of Malaysian oil and gas stocks employing asset pricing model with improved version of Fama-MacBeth two-stage panel regression. The findings reveal that oil price risk, gas price risk, and exchange rate risk are priced factors in the returns of oil and gas stocks, alongside market-based risk factors. Oil price, gas price and exchange rate factors are found to be associated with positive risk premium implying that they are systematic risk factors in the Malaysian oil and gas industry. Investors demand compensation for exposure to changes in oil price, gas price and exchange rate, implying that the risk cannot be eliminated through diversification. The risk premium for common systematic risk factors such as market, book-to-market, and momentum factors are found to be negative. The results suggest that in the Malaysian oil and gas industry, momentum driven strategy produces negative returns and investors receive higher returns from investing in growth oriented oil and gas stocks. Our results offer implications for asset pricing and portfolio management.

scholarly journals Impact of Industry-Specific Risk Factors on Stock Returns of the Malaysian Oil and Gas Industry in a Structural Break Environment

Mathematics ◽  
2022 ◽  
Vol 10 (2) ◽  
pp. 199
Author(s):  
Mohammad Enamul Hoque ◽  
Soo-Wah Low
Keyword(s):  
Risk Factors ◽  
Exchange Rate ◽  
Stock Returns ◽  
Oil And Gas ◽  
Structural Break ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Specific Risk ◽  
Gas Price ◽  
Industry Risk

This study examines the impact of industry-specific risk factors such as oil price, gas price, and exchange rate on stock returns of Malaysian oil and gas firms in a structural break environment by employing the break least square approach of Bai and Perron (1998, 2003). Existing studies fall short of providing such empirical evidence. The results document evidence of structural breaks in the relationship between industry risk factors and the stock returns of the oil and gas industry. Industry-specific risk factors are shown to significantly affect the stock returns of oil and gas industry sub-sectors alongside market-based risk factors. The results reveal that the beta values of oil price, gas price, and exchange rate vary across sub-periods hence confirming that exposure of oil and gas stocks to industry risk factors varies over time and across sub-periods. The effects of oil, gas, and exchange rate risk factors also differ across the sub-industry, with impacts and directions largely dependent on the core business activities of the oil and gas sub-industries. The empirical results offer implications for asset managers and investors.

scholarly journals Analysis of the development of Oil and Gas Industry in present conditions

2019 ◽  
Vol 16 (6) ◽  
pp. 29-36 ◽  
Author(s):  
E. I. Larionova ◽  
T. I. Chinaeva ◽  
E. P. Shpakovskaya
Keyword(s):  
Exchange Rate ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Oil Price ◽  
Financial Indicators ◽  
Gas Industry ◽  
Oil Companies ◽  
The Exchange Rate ◽  
Oil Sector ◽  
Return On Sales

Purpose of the study. This study examines the state of companies of oil sector based on the analysis of dynamics and relationship between basic financial indicators, characterizing the activities of oil companies; it identifies factors affecting the companies’ efficiency, such as return on sales (ROS) and productivity. The work is based on dynamic, structural, correlation analysis of analytical and statistical information on processes occurring in this area of economic activity.Materials and methods. Statistical data and analytical information on oil sector companies serve as the information base of this study. Statistical methods of information analysis (comparative analysis, analysis of time series, correlation, and regression analysis) represent the methodological base of research.Results. The authors analyzed the development trends of the global and Russian oil and gas sectors. The last two decades have been marked by changes in the global oil market that were caused by fluctuations in the price of oil and oil products and with the rise and fall in the price of Brent crude oil per barrel.The paper considers dynamics of financial indicators of Russian oil companies. An analysis of the data on the revenue of the largest Russian companies in ruble and dollar terms over the last 10 years has revealed a significant difference in the dynamics of these indicators. The authors performed ROS and oil price profitability correlation as well as correlation between the price of oil, the exchange rate and the profitability of oil companies.Conclusion. The oil and gas industry is an essential sector of the economy that heavily promotes to the socio-economic development of our country. Revenues of the oil and gas sector contribute to the Russian GDP and are a major component of the budget. There are two ways to calculate revenue of oil companies – in ruble (dollar terms) and impact of RUB/USD exchange rate. The sharp changes in the exchange rate of the last decade have advanced significant changes in the revenue of Russian oil companies.In this study, the total revenue (in dollar terms) was calculated as the ratio of revenue in rubles to the average annual exchange rate of the corresponding period. In general, the disastrous results of 2015 and 2016 led to a decrease in the average growth rates of dollar and ruble revenue, as well as profit and profitability.The authors performed a correlation analysis of return on sales and oil prices, which revealed an almost total absence of correlation between these indicators. Oil prices and exchange rates have a negligible effect on the profitability of oil companies. An inverse correlation is observed between the RUB/USD pair and the oil price per barrel. It is concluded that the cost of oil and the exchange rate have little effect on the profitability of oil companies.Since the oil and gas complex makes a very significant contribution to the development of the country’s economy, it is advisable to analyze its development trends on a regular basis. Based on the results of the economic and statistical analysis of financial indicators, it is possible to identify the main development directions of the oil and gas industry, evaluate positive and negative processes, and determine further prospects.

Managing integrity of operating FPSOs

2017 ◽  
Vol 57 (2) ◽  
pp. 589
Author(s):  
Astrid Barros
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Oil Price ◽  
Significant Drop ◽  
Global Response ◽  
Gas Industry ◽  
Floating Structures ◽  
Business As Usual ◽  
The Way

The last few years have been challenging ones for the oil and gas industry with a significant drop in oil price. At the same time ageing facilities and a more dynamic market have been driving the need for becoming more efficient in the way we do our business, i.e. business as usual is not enough anymore. It is not only about individual efforts, the global response to the need for becoming more efficient has driven an increase in collaborative initiatives among the industry which we will all benefit from. A few of these initiatives have significantly improved the way we manage offshore floating structures engineering at Woodside.

scholarly journals International Oil Companies Sustainability after Oil Price decline

2017 ◽  
Vol 11 (1) ◽  
pp. 157-167
Author(s):  
Adrian D. Tantau ◽  
Mohammadreza Khorshidi ◽  
Ali Asghar Sadeghi Mojarad
Keyword(s):  
Business Models ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Green Energy ◽  
Gas Industry ◽  
Oil Companies ◽  
Market Situation ◽  
Important Challenge ◽  
Gas Price ◽  
Sustainability Report

Abstract International Oil Companies (IOC’s) had been playing a major role in oil industry at the beginning of 20th century. They had many volatility during last century and faced with many obstacles which forced them to change their business models and improve their outcome to satisfy their shareholders. One of the most important challenges was oil nationalization in oil producer countries which were happened by establishment of NOCs. Later green energy issue which came from CO2 emission problem happened and recently, oil and gas price diminish challenges, involve all IOCs with the most important challenge in last century after all. Among all those events, one of the most important key values which have been observed by IPIECA, API and IOGP associations every year is Sustainability. The objectives of the research are study all issues and indicators of sustainability in IOCs. Each indicator has faced with different strategy via IOCs in different market situation. The importance of this key value cause that it is observed by some important association like IPIECA, API and IOGP each year. As the scarcity of related references for business model in oil and gas industry, literature review of some resources and annual sustainability report followed by a questionnaire as a survey are also selected methods for recent major challenges to achieve required result.

scholarly journals Analyzing the Impact of Covid-19 on the Oil and Gas Industry: A Case Study of Petronas

2021 ◽  
Vol 4 (2) ◽  
pp. 26-33
Author(s):  
Daisy Mui Hung Kee ◽  
Nur Amira Liyana ◽  
Zhang LuXin ◽  
Nur Atikah ◽  
Ninie Alwanis ◽  
...  
Keyword(s):  
Questionnaire Survey ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Oil Price ◽  
Sharp Drop ◽  
Gas Industry ◽  
The World ◽  
The Impact

As a result of the Covid-19 epidemic, every industry in the world has been greatly affected. We took Malaysia's Petronas as an example to analyze how oil and gas industries were impacted by such a difficult international situation. This paper investigated how Covid-19 affected Petronas and how it responded to the sharp drop in oil price. In a questionnaire survey, we listed the problems that Petronas may face in this outbreak.

scholarly journals THE ROLE OF MONETARY AND FISCAL FACTOR IN THE FORMATION OF INCOMES FROM THE OIL AND GAS INDUSTRY OF RUSSIA

2019 ◽  
Vol 2 (5) ◽  
pp. 184-189
Author(s):  
Anna Komarova
Keyword(s):  
Exchange Rate ◽  
Russian Federation ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
The Russian Federation ◽  
The Impact

This research assesses the impact of monetary (exchange rate) and fiscal factors (oil and gas taxes, MET on oil) on the dynamics of revenues of the oil and gas industry of the Russian Federation.

scholarly journals Risk Management in Oil and Gas (EPC) Industry

2021 ◽  
Vol 9 (9) ◽  
pp. 1255-1264
Author(s):  
Prashant Pralhad Kadam
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
Oil And Gas ◽  
Safety Management ◽  
Management Strategies ◽  
Oil And Gas Industry ◽  
Construction Costs ◽  
Defective Items ◽  
Gas Industry ◽  
Risk Management Strategies

Abstract: The five most important risk factors identified in the design phase are 1] scope uncertainty, 2] failed management and planning, 3] changes in errors and omissions, 4] inadequate projectS team structure, 5] inadequate quality requirements. The top five risk factors determined by the procurement category are 1] Inadequate online resources and equipment, 2] Distribution of suppliers, 3] Uncertainty in design and style, codes, requirements and standards, 4] Defective items, and 5] Compromise. The 5 most important risk factors identified in the construction phase are 1] weak project capability, 2] excessive construction costs, 3] major construction delays, 4] strong project plan, and 5] poor safety management .This was initiated by the link between risk factors and the effects on price, quality and timing, as well as the potential for expensive, common, and high-quality outcomes. Keywords: Disaster risk management, risk management strategies, project risk management, oil and gas industry.

scholarly journals The Moderating Effect of OPEC and Non-OPEC on the Relationship Between Oil Price Volatility and Accrual Earnings Management in the Oil and Gas Industry

2020 ◽  
Vol 6 (1) ◽  
pp. 283-300
Author(s):  
Viveksarati Sandrasigaran ◽  
Jalila Binti Johari ◽  
Soh Wei Ni ◽  
Bany-Ariffin A.N
Keyword(s):  
Earnings Management ◽  
Oil And Gas ◽  
Price Volatility ◽  
Oil And Gas Industry ◽  
Oil Price ◽  
Empirical Examination ◽  
Gas Industry ◽  
Oil Price Volatility ◽  
Production Ratio ◽  
The Relationship

This study is an empirical examination on the relationship between oil price volatility and earnings management in the oil and gas industry, moderated by price-setting abilities of OPEC (Organization of Petroleum Exporting Nations) and price taking abilities of Non-OPEC countries. This study tests discretionary, income-decreasing, current and non-current accruals as a proxy of earnings management. A total sample of 209 firm-year observations from 2008 to 2018 of listed oil and gas firm is collected from the Thomson Datastream database. To incorporate the moderation effect, the samples were divided into two sub-groups, OPEC and Non-OPEC using reserve to production ratio.  Firm attributes are included in the analysis as the constant variable such as leverage, current ratio, EBITDA and Growth. The initial results show that, overall, the interaction effect between OPEC/Non-OPEC and oil price volatility is positive and significant to discretionary and income-decreasing accruals. Data samples are limited while comparing OPEC and Non-OPEC countries as not every oil and gas company in OPEC are listed companies and their information is heavily protected. This study contributes to extant earnings management literature regarding political cost, which remains a significant concern to oil and gas companies worldwide.

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