Extraction Sector Research Articles

Liquidity and Profitability in the Colombian Oil and Natural Gas Extraction Sector: Analysis 2011 – 2021

The dynamics brought about by the adoption of the International Financial Reporting Standards have a direct impact on the various Colombian economic sectors; highlighting the Oil and Natural Gas Extraction sector as one of the most important in terms of wealth generation and exports of the nation. For this reason, the present study was directed in order to analyze the indicators of Liquidity and Profitability in the Colombian oil sector between 2011 and 2021. For the development of the study, a quantitative investigation is proposed with a documentary base where it is carried out an analysis of secondary sources from the Superintendence of Companies from which financial data of the Oil and Natural Gas Extraction sector in Colombia is taken, on which a descriptive processing is carried out and subsequently a correlational analysis between the liquidity and profitability indicators. The results show a level of correlation between the liquidity indicators, referring to the Current Ratio and Acid Test, and those of Profitability, Return on Total Assets, and Return on Equity. It is concluded that the correlation between these variables would be explained by the rates and sales volumes of said sector; which constantly carries out transactions of high sums of money accompanied by multiple policies and methods to ensure the transaction and thus not unbalance the receipt of income by the industry.

Enhancing sustainable mineral extraction through corporate social responsibility and green innovation

The objective of this study is to investigate the role of green innovation and corporate social responsibility (CSR) in improving the sustainability performance of mineral extraction firms. The rationale behind exploring said perspective is the extensive use of water, materials, and energy in mineral extraction, which necessitates developing new pathways to condense the use of natural resources. In this study, we used a well-structured questionnaire method to collect primary data from employees working in the mineral extraction sector. We performed exploratory factor analysis (EFA) in SPSS after screening the initial data and then proceeded to confirmatory factor analysis (CFA) using AMOS. After verifying the structural arrangements of constructs and ensuring the data meets reliability and validity requirements, we created a structural model in AMOS to test our hypothesis. We performed the mediation analysis using bootstrap methodology, 5000 resamples, and a 95% confidence interval. The results demonstrate that corporate social responsibility to society and the environment does not have a direct impact on sustainability performance. However, corporate social responsibility toward employees and green innovation strengthens the sustainability performance of mineral extraction firms. Additionally, we found that green innovation mediates the relationship between corporate social responsibility and sustainability performance. The study concludes that the role of green innovation in the mineral extraction sector is crucial to promoting sustainability performance via CSR activities. The conclusion of this study portrays promising implications for managerial decision-making and policy development regarding the mineral extraction sector. We suggest that firms seeking to improve sustainability performance through corporate social responsibility must adopt green innovation practices, which serve as a bridge between corporate social responsibility and sustainability performance. Without doing so, the results of corporate social responsibility efforts might not be successful.

Sustainable management in natural resources and carbon neutrality: Revisiting the nexus in Ukraine-Russia war context

The objective of this study is to evaluate the effectiveness of Sustainable Management Practices (SMPs) in achieving Carbon Neutrality (CN) within the natural resource extraction sector, specifically in the context of the Ukraine-Russia war. The study also aims to investigate the moderating role of Policy Robustness (PR) in enhancing the impact of SMPs on CN. Data were collected from 702 employees across 234 firms in the steel, iron-ore, and aluminum sectors, from China and India. We employed SEM based methodology, combining confirmatory factor analysis and regression methodologies within Ordinary Least Squares framework to analyze the framework of the study. Key findings reveal that SMPs have a significant positive impact on CN in both India and China. Moreover, the robustness of policies plays a crucial role in reinforcing the effectiveness of SMPs in achieving CN. Interestingly, while the interaction between SMPs and PR significantly impacts CN in China, it is not as prominent in India. Additionally, the study finds that factors such as firm age and employee experience do not significantly influence CN, contrary to conventional expectations. One major contribution of this study is the identification of the synergetic effect of combining SMPs with robust policies (PR) to enhance CN, particularly in the face of geopolitical challenges like the Ukraine-Russia war.

Financial resource curse and firms' accessibility to financing in resource-based countries

This study delves into the paradox of the financial resource curse, exploring how the abundance of natural resources in a country paradoxically constrains firms' accessibility to financing. Despite the potential economic boon natural resources represent, evidence suggests that they can lead to less diversified economies, making it challenging for firms outside the resource sector to access financing. Our research aims to dissect this phenomenon by analyzing microeconomic statistics on the financial accessibility of enterprises, juxtaposed with macroeconomic statistics across 170 countries, encompassing over 10,000 firms surveyed from 1990 to 2022. The panel regression analysis allows us to control for both time-invariant country characteristics and global economic trends, providing insights into the causal relationship between resource dependence and financial access for firms. The results are striking, revealing that, indeed, countries with significant natural resource wealth tend to exhibit reduced financial accessibility for firms outside the resource extraction sector. The panel regression models indicate a robust negative correlation between the extent of a country's resource wealth and the ease with which non-resource firms can access financial capital. This suggests that the financial resource curse is not only a real phenomenon but also one that has significant implications for economic diversification and sustainable development. Moreover, findings underscore the need for targeted policy interventions. Countries with abundant natural resources should implement strategies that foster economic diversification, enhance the financial infrastructure to support a broader range of industries, and encourage the development of financial instruments tailored to the needs of non-resource sectors.

Sustainable performance and disaster management in the oil and gas industry: An intellectual capital perspective

In the post-COVID era and amidst the ongoing Ukraine conflict, the natural resource extraction sector, particularly oil and gas, faces unprecedented challenges in maintaining its sustainability. Disasters in this sector, ranging from environmental catastrophes to operational disruptions, further exacerbate these challenges, eroding environmental integrity and aggravating social issues. These events underscore the urgency of strengthening disaster management capabilities in the oil and gas sector to safeguard against future uncertainties and sustain its operational viability. Against this context, this study aims to examine two critical facets of disaster management in the oil and gas sector. The first objective is to assess the role of intangible resources, particularly intellectual capital, in improving an organization's disaster management capabilities. Intellectual capital, encompassing human, relational, and structural capital, is posited as a key driver in managing complex and unpredictable challenges. The second objective is to investigate the role of supply chain risk management in mediating the impact of intellectual capital on disaster management. Data for this study were collected from firms in the oil and gas sector of Pakistan through a structured questionnaire Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed for data analysis. The results reveal a significant impact of intellectual capital on improving both the responsiveness and alertness aspects of disaster management. Further, supply chain risk management emerges as a crucial factor in channeling the influence of intellectual capital on disaster management effectiveness. Findings of the study not only contributes to the theoretical understanding of disaster management in the natural resource sector but also offers practical insights for industry practitioners. The novelty of this study lies in its empirical examination of the interplay between intellectual capital, supply chain risk management, and disaster management capabilities, win the context of the oil and gas sector.

Economic impacts of the coal extraction sector on the South Korean national economy: An input-output analysis

This article applies input-output (IO) techniques to appraising the role and economic impacts of the coal extraction sector (CES) in South Korea. IO tables for five years, namely 2000, 2005, 2010, 2015, and 2019, are used. Three IO models are utilized to deal with various economic impacts by treating the CES included in the endogenous sectors as an exogenous one. The impacts of a production or investment in the CES on inducing production, value-added, and wages in the national economy have been gradually increasing, which is interpreted as the result of the restructuring of the CES that the South Korean government has promoted over the past 20 years. However, the value-added coefficient, employment coefficient, and employment creation impact have gradually decreased, which seems to be due to the worsening profitability due to the gradual phasing out of the CES. Both the impact of production disruptions in the CES on other sectors’ production and the impact of a change in the output price of the CES on that of other sectors have been gradually decreasing. Thus, the government can continue to phase out the CES without creating the burden of production disruptions and inflationary pressure in the national economy.

Investigating the link between green finance, environmental orientation, and carbon neutrality: A panel study of the metal extraction sector

In the natural resources exploitation sector, metal industry is considered as one of the major carbon emitters. In this context, this study aims to explore the role of green finance and environmental orientation in improving the carbon neutrality of the firms operating in this sector. The data was collected from two large economies' metal sectors: the People's Republic of China (PRC) and India. Five years of data from 2015 to 2019 was collected from 98 firms from financial statements and other sources. Given the nature of the data, panel cointegration was employed to analyze the developed model. Keeping in view the findings of these three diagnostic tests, it was clear that our model did not fully meet the assumptions to apply a normal panel. It led us to apply a panel-corrected standard error (PCSE) approach, which accounts for the violations of assumptions (autocorrelations, heteroscedasticity, and cross-sectional dependence) as identified in the results of diagnostic tests. The PCSE approach the can preserve the OLS parameter estimates while adjusting the standard errors (SE) to counter the issues found in OLS estimation. These results explain that the provision of green finance can help improve the carbon neutrality of firms in the metal sector of the PRC. Further, the results on the impact of environmental orientation on carbon neutrality are also significant, showing environmental orientation's instrumental role in improving carbon neutrality. Further, the interaction role of environmental orientation in the association between green finance and carbon neutrality is tested creating an interaction term by multiplying both variables. The results show a statistically significant role of environmental orientation in the association between green finance and carbon neutrality. These findings coefficient that, in the case of the PRC, the joint effect of green finance and environmental orientation is statistically significant. The results on the impact of environmental orientation are also significant, confirming its instrumental role in improving carbon neutrality. In short, our findings, suggest that by embracing such an environmental orientation, organizations can position themselves as leaders in carbon neutrality and contribute to a more sustainable future.

Total factor productivity of Russian companies: Assessments, trends, and dynamic factors

The article presents the results of the analysis of total factor productivity( TFP) of Russian companies across eight industries — agriculture, extraction, processing, energy, water supply, trade, transportation, and information and communication — during the period of 2012 to 2020. Over this timeframe, there was an observable trend of decreasing TFP among Russian companies cumulatively. Sector-specific analysis reveals an upward TFP trend in agriculture, extraction, and trade sectors, while in information and communication, the metric remained virtually unchanged. Almost across all sectors, except for information and communication, private companies exhibited lower TFP compared to stateowned enterprises (SOEs) with direct government ownership. Furthermore, in the extraction sector, SOEs demonstrated higher TFP than private organizations. However, the TFP of medium and small private companies proved to be higher across all sectors, excluding agriculture and extraction. Additionally, it was found that both private companies and SOEs with direct government ownership lagged behind the productivity of SOEs with indirect government ownership, except for the extraction sector, where these distinctions were negligible

Analysis of the export base in Paraná State Mesorregions from 2001 and 2021

This study aims at identifying the pattern of exports by the Paraná mesoregions in the years 2001, 2011 and 2021. In order to do so, the Regional Location Quotient Method Analysis was applied. The results demonstrated that the extraction sectors, such as wood and pearls, have a higher concentration in some regions, given their intrinsic characteristics, whereas the export of goods, which requires less skilled labour and less intensive capital, is more dispersed among the mesoregions.

Fault diagnosis of pumping system based on multimodal attention learning (CBMA Learning)

Grasping the pumping system’s operational state in time is crucial to the petroleum extraction sector. Rapid and efficient identification of indicator diagrams is a direct method of determining the operating status of oil wells. A new method of multimodal attention learning model(CBMA Learning) using superimposed images of the indicator diagrams and its frequency domain maps combined with numerical data of the indicator diagram is proposed. By processing the specified type of data through each branch network of the model in this method, the model could extract the characteristics of various modal data, and the attention mechanism introduced can efficiently capture the detailed information of the data and increase the precision of fault diagnosis.The proposed method is validated by applying it to an actual dataset from an oil field in northwest China. The experimental results demonstrate that the average classification accuracy of CBMA Learning is increased by 1.17 percent compared to the simple multimodal learning model, and the average accuracy of CBMA Learning reaches 93.05 percent, which is 10.47 percent higher than other models.

Effect of foreign direct investment on environmental quality in West Africa

Foreign direct investment (FDI) is known to be beneficial because of the positive externalities it generates in the recipient economy, whether in developed or developing countries. With a view to achieving the Sustainable Development Goals (SDGs), West African countries are investing in attracting foreign investors, as evidenced by the upsurge in FDI flows observed over the past two decades and the reforms and attractiveness policies put in place. In West Africa, this FDI, which is mainly directed towards the natural resource extraction sectors, has consequences for the quality of the environment. This paper focuses on analyzing the effect of FDI on environmental quality in 13 West African countries over the period 2000-2020. This research uses a panel quantile regression with nonadditive fixed effect. The main results obtained indicate a negative effect of FDI on environmental quality reflecting the existence of the pollution haven hypothesis in the area. In addition, we find evidence of the U shape of the environmental Kuznets curve (EKC), invalidating the environmental Kuznets curve (EKC) hypothesis. West African governments should implement green investment and financing strategies and encourage the use of new green technologies and clean energy to improve environmental quality.

The social impacts of resource extraction for the clean energy transition: A qualitative news media analysis

Resource extraction is fundamental to our society and our reliance on resource use is increasing with the clean energy transition. While global sustainability assessments on resource extraction gain relevance, the social dimension is often understudied. A qualitative news media analysis was conducted on 15 resources that are critical to the clean energy transition to assess and categorize the social impacts globally. The framework provided by the UNEP Methodological Sheets for Sub-Categories in the Social Life Cycle Assessment (S-LCA) 2021 was used to create pre-coded categories to document the type of social impact described. The analysis found 963 news articles across 68 countries. The local community stakeholder group faced the most social impacts portrayed in the news reports, followed by the worker and society stakeholder groups. Two additional subcategories, eco-tourism and health impacts on children, were coded to capture the full range of social impacts. This research provides a basis to create a more comprehensive assessment of the social dimension in the resource extraction sector. It can be used to expand upon existing social sustainability frameworks or to prioritize data collection when conducting an S-LCA. The results contribute to a better understanding of the social impacts from the clean energy transition.

Essential Oils Extraction: A Promising Enterprise for Rural Areas' Sustainable Development

Since ancient times, essential oils have been used in cosmetics, perfumes, and medications. The current research examinesthe chances for rural communities' survival and livelihoods via the use of essential oil extraction operations. According to thereport, demand for essential oils is quickly increasing, as many companies generate large amounts of herbal and cosmeticgoods using essential oils. As a result, the potential for establishing rural firms in the essential oil industry is enormous.According to the literature, essential oil extraction may be accomplished at any scale required. Economic research showsthat the extraction of essential oils benefits rural income production. Nonetheless, a shortage of small-scale technologyfor the rural population and a lack of information about essential oil companies' social and economic advantages are likelyto be critical issues impeding the establishment of the essential oil extraction sector in rural areas.

The Gobi Khulan: A Flagship Species for Mobility

Khulan, the Asiatic wild ass, have been eradicated from most of their former range. The Mongolian Gobi currently holds more than 80% of the global population and constitutes more than 70% of the global breeding range and therefore is the most important stronghold of the species. In the Mongolian Gobi, individual khulan roam over thousands of square kilometers annually and their movements are among the largest reported for terrestrial mammals globally. The high mobility of khulan plays a critical role for the ecosystem functioning of the Mongolian Gobi, including large-scale seed dispersal and provision of water holes for other wildlife. Khulan also have non-consumptive aesthetic and naturalistic values for local residents and harbor the potential for wildlife tourism and subsistence hunting. The species is currently listed as Near Threatened in the International Union for Conservation of Nature Red List, but remains under close scrutiny because multiple developments which negatively impact the size, quality and functional connectivity of the Gobi–Eastern Steppe ecosystem are happening simultaneously and at an unprecedented speed in an ecosystem which so far has remained at a near natural stage. These developments are the: 1) dramatic increase in livestock numbers and a change in the traditional herding practice, 2) rapid development of the resource extraction sector, and 3) expansion and upgrading of the transport infrastructure to meet the needs of the mining sector and allow Mongolia to connect to international markets. The paper explores how these threats may affect khulan in the future and why khulan are an ideal flagship species for mobility and landscape connectivity.

The USA and the energy transition of the 21st century: Measures to overcome dependence on China in critical minerals

Since the middle of 2010s, international community (developed economies primarily) has been paying increasing attention to the reduction of carbon footprint in the environment by means of large-scale deployment of renewable energy, electrification of transport system and sustainable production of goods. Aspiring to become a global leader of energy transition, the United States of America has already taken a set of measures to stimulate technological growth. Such a challenging task cannot be accomplished without a guaranteed access to the so-called critical minerals. However, the US has encountered growing competition from China in this field. From the beginning of 2000s, China has amassed within its territory a dominant share of global production of critical minerals, acquired access to key foreign extraction centers and thus become virtually a monopolist in the markets. Hence the United States government urgently needs to devise measures to overcome the dependence from China in this regard. The author of the article dwells on the factors which have made the issue of critical minerals (as a recent development of international relations) relevant and politically charged. In its turn, it has led to the securitization of the subject in American official discourse during Trump administration which manifested itself in the ‘mineral security’ concept. The article contains comparative analysis of Trump and Biden administration approaches to navigating the country out of the dependence from China for critical minerals; it also identifies key focus areas of the current US mineral strategy. Respective analysis indicates that Trump administration prioritized bolstering domestic extraction capacity, whereas Biden-Harris administration underscores processing and production segments, mostly due to the pressure from local communities and environmental groups. The author stresses that the Unites States, being unable to contest China’s monopoly as producer and supplier of critical minerals with market instruments, tends to employ human rights discourse to compete with its rival. The ultimate expression of such an approach is Energy Resource Governance Initiative which has been designed to foster high ecological and social standards in global extraction sector. Relying on its partners, the United States intends to use the program to challenge China in commodity markets. The author concludes that despite the effort Washington won’t be able to rid itself of the dependence for Chinese imports in the near future. As for the long-term goals, their achievement is complicated due to both China’s production capacity and experience and insufficient government funding of renewable energy projects in the United States.

MINING AND PRODUCTIVE SPECIALIZATION: ECONOMIC IMPACTS OF THE COLLAPSE OF THE DAM OF FUNDÃO IN MARIANA/BRAZILzil

This paper analyzes the economic impacts in the municipality of Mariana from the Fundão Dam rupture occurred at the end of 2015. The central hypothesis is that economic dependence on the mineral extraction sector makes this municipality more vulnerable to adverse shocks affecting this productive sector, compromising its job recovery capacity. In order to calculate the impacts of this disaster, datas on formal employment estimated through the Synthetic Control Method were used. The results showed that, although Mariana and its synthetic version show similar formal employment trajectory in the pre-shock period, Mariana recovered employability in the second year after the dam rupture, unlike the control group. However, this result is not due to the recovery of formal employment based on sustainable economic diversification strategies, but essentially by dependence of the mining activity and the post-disaster remediation actions that has been gradually implemented in order to recover affected areas.

Occupational noise induced hearing loss and vibrations exposure and its determinants in oil & gas industry in India: A review article

Occupational Noise Induced Hearing Loss and Whole Body Vibrations are the common hazards in modern industries. Noise is the insidious of all industrial pollutants, involving every industry and causing severe hearing loss in every country in the world. It has been suggested that 12% or more of the global population is at risk of hearing loss from noise. A study published in American Journal of Industrial medicine showed in Oil and Gas extraction sector of the U.S 14% of the overall noise-exposed workers and 28% of the noise-exposed workers in the Natural Gas Liquid Extraction had hearing loss. Left untreated, hearing loss can lead to communication difficulty, social isolation, stress and fatigue. It is additionally associated with depression, cognitive decline, dementia, falls, and mortality. Workers with hearing loss face challenges to their personal safety, are at higher risk of injury. Vibration reported a significantly higher prevalence of tingling, numbness, paresthesia (18.2%); pain in finger, wrists, arms, etc. (31.7%); stiffness in hand (13.6%); and hyperhidrosis (48.5%) among drillers. Whole-body vibration and segmental vibration need to be studied separately because they are measured and evaluated using different standards. They also require different control measures and have differing effects on the human body. The clinical presentation of HAVS in India is not the classical VWF. Subclinical manifestations and dose- response relationships need to be worked out for HAV and WBV in Indian miners. The review paper intends to throw light on these silent killers in the form of occupational hazards leading to serious non-curable permanent health impediments/ disabilities in Oil & Gas industry.

SDG Adherence of Social Performance Indicators Used by Brazilian Mining, and Oil and Gas Extraction Companies

This study aimed to examine whether the social performance indicators used by mining companies participating in the BM & FBOVESPA Corporate Sustainability Index (indice de sustentabilidade empresarial [ISE]) during 2005–2021 were aligned with United Nations’ Sustainable Development Goals (SDGs). Content analysis was conducted after collecting key information from voluntary sustainability reports presented by the companies. The results uncovered 423 social indicators and revealed repeated discontinuity and large time gaps of as many as 6 years in the disclosure of sustainability information. Among the SDGs investigated, the most discussed were (in order): SDGs 4, 3, 5, 1, 10, and 2. Thus, it is recommended that even though SDGs have been implemented since 2015, the desired social impact can be created only when companies in the mining and extraction sectors make a formal commitment to continuously disseminate sustainability reports and work equitably on SDG goals.

Resources melioration and the circular economy: Sustainability potentials for mineral, mining and extraction sector in emerging economies

In this editorial we present the content and key theoretical aspects of studies in the virtual special issue on resources melioration and the circular economy. Sustainability, resource melioration, and circular economy concepts that provide the foundation of these studies are described in this editorial. Important conceptual themes from the special issue studies are presented. Eleven included studies grouped into five categories are summarized. Major theoretical developments and the practical implications are summarized. Energy efficiency, material resource efficiency, circular economy models, decision and policy support are the key perspectives identified. Numerous practical policy and managerial implications are summarized. Overall, it would behoove policy makers and practitioners to adopt resources circularity for extracted resources, minerals, and mining, sectors, especially for emerging economies.

The effects of restrictive measures on cross‐border investment: Evidence from OECD and emerging countries

This paper investigates the effects of global and sectoral restrictive measures on cross-border FDI among 49 advanced and emerging countries. We use a gravity model with panel data from 2010 to 2019 and the FDI Restrictiveness Index of the OECD that quantifies the level of restriction in FDI. Our results suggest that global restrictive measures do not significantly affect cross-border FDI in OECD countries, while restrictions in the service sector have negative and significant effects on FDI. Moreover, the overall restrictive measures and those in the primary, secondary and service sectors negatively impact inward FDI among OECD and big emerging countries. The restrictions in the primary sector are a main obstacle to inward FDI in the big emerging countries. In addition, global and sectoral restrictions do not have a significant effect on FDI between advanced and African countries. The analysis of disaggregated sectoral restrictive measures shows that restrictions in business and other financial services are negatively associated with intra-OECD FDI. We also find that restrictions in the manufacturing sector have restrictive impacts on inward FDI in the large emerging countries, and those in the mining, quarrying and oil extraction sector hinder inward FDI in African countries. Reforms to liberalise sectoral restrictions by country have positive effects on FDI, but deregulation of the services sector has beneficial effects on inward FDI from advanced and emerging countries.