Financial Performance Analysis of Firms: A Focus on Oil and Gas Industry Sustainable Practices in Oman

Abstract

AbstractThis study examines production management practices and operational risk on sustainability practices in the oil and gas industry. In addition, the objective of this research is to investigate the mediate influence of operational risk between production management practices, sustainability practices, and financial performance in the oil and gas industry. As well, the current study aims to explore the factors that predict firms’ financial performance. This research is based on secondary data from three oil and gas firms’ annual reports in Oman (2017–2020). The financial indicators were extracted from the annual report of three oil and gas companies, which includes Shell Marketing, Petroleum Development Oman (PDO), and Oman Liquidated Natural Gas (OLNG); the data then analyzed by using Excel and SPSS software. The findings were represented using figures and tables of firm financial performance using frequency, mean, and standard deviation. The revealed findings demonstrate that firm’s financial performance is highly linked to the standards of sustainability practices a firm developed and implemented. Additionally, the analysis of the collected data elucidates that the performance of the firm was financially affected by risk conditions, which sheds light on the importance of improving sustainability practices of the oil and gas firms. This research will provide the oil and gas industry with a clear understanding of the critical predictors influencing firms’ financial performance by focusing on sustaining the firm practices. Also, policymakers and investors will benefit from this study by observing the firm’s performance and developing the strategies used through the suggested recommendations. It is worth mentioning that this study contributes to the existing knowledge with valuable conceptual model development, findings, and suggestions.KeywordsFinancial performanceOil and GasOperational riskProduction managementSustainabilityOman