Global Oil Industry Research Articles

The Impact of COVID-19 on Stock Price: An Application of Event Study Method in Vietnam

Vietnam's Oil and gas industry make a significant contribution to the Gross Domestic Product of Vietnam. The ongoing COVID-19 pandemic has hit every industry hard, but perhaps the one industry which has taken the biggest hit is the global oil and gas industry. The purpose of this article is to examine how the COVID-19 pandemic affects the share price of the Vietnam Oil and Gas industry. The event study method applied to Oil and Gas industry index data around three event days includes: (i) The date Vietnam recognized the first patient to be COVID-19 positive was January 23, 2020;(ii) The second outbreak of COVID-19 infection in the community began on March 6, 2020;(iii) The date (30/3/2020) when Vietnam announced the COVID-19 epidemic in the whole territory. This study found that the share price of the Vietnam Oil and Gas industry responded positively after the event (iii) which is manifested by the cumulative abnormal return of CAR (0;3] = 3.8% and statistically significant at 5 %. In the study, event (ii) has the most negative and strong impact on Oil and Gas stock prices. Events (i) favor negative effects, events (iii) favor positive effects, but abnormal return change sign quickly from positive to negative after the event date and statistically significant shows the change on investors' psychology.

The use of revenue-based multipliers for the appraisal of oil and gas companies

Subject. The article focuses on ratios of the market capitalization and corporate value to revenue of the twenty five leading public companies in the oil and gas sector within 2008 through 2018. Objectives. The study is to trace key trends in ratios of corporations in the oil and gas. I also determine what caused such a transformation for the analyzable period and whether the multipliers are applicable to appraise the corporate value in the oil and gas sector. Methods. The study is based on methods of comparative and financial-economic analysis, summarizing financial reporting data. Results. Revenue-based ratios are found to be applicable to appraise the value of oil and gas companies. Although having the similar composition of net revenue, companies with better profitability have higher multipliers. Integrated corporations were found to have lower multipliers than independent companies. The study shows that the import-based petrochemical production tends to have the lower value than that using domestic resources. The multiplier goes down if the company's revenue includes proceeds from the resale. As the debt burden grows, the multiplier decreases. Therefore, considering the significant difference in the debt burden, the multiplier should better include the corporate value instead of the market capitalization, since the corporate value comprises the net debt. I also discovered the country-related factor, which should be taken into consideration when using the multiplier. Conclusions and Relevance. The use of revenue-based multipliers requires the thorough analysis of the financial and business operations of companies. However, it is quite acceptable when the overall profitability decreases and the debt burden increases in the public segments of the global oil and gas industry. The findings can be used to appraise the value of oil and gas assets as part of the comparative approach and decide on actions for raising the market capitalization of public oil and gas corporations.

Analyzing the market valuations of the world's leading public oil and gas corporations

Subject. This article explores the market valuation ratios of the twenty five leading public oil and gas companies between 2006 and 2018. Objectives. The article aims to identify key trends in the changes in market valuations of the largest public oil and gas companies, and identify the factors that have caused these changes. Methods. For the study, I used comparative, and financial and economic analyses, and generalization of materials of the companies' consolidated financial statements. Results. The article shows certain changes in the main indicators of market valuation of the leading public oil and gas companies and identifies the main factors that contributed to these changes. It establishes that the most significant for comparison and valuation are ratios based on balance sheet values of assets and equity, and EBITDA, DACF and net income ratios are appropriate as auxiliary ratios. The article says that the exchange segment of the industry has increased the debt load, so instead of market capitalization as a component of the coefficients of this group, it is advisable to apply the company's value indicator. Conclusions and Relevance. The article concludes that the market sentiments towards the stock market segment of the global oil and gas industry are getting impaired. This is quite natural against the background of falling profitability of most leading companies. The results of the study can be useful in evaluating, forecasting and developing measures to increase the market capitalization and value of public oil and gas companies.

Working for Oil: Comparative Social Histories of Labor in the Global Oil Industry, eds. by Touraj Atabaki, Elisabetta Bini, and Kaveh Ehsani

Working for Oil: Comparative Social Histories of Labor in the Global Oil Industry, eds. by Touraj Atabaki, Elisabetta Bini, and Kaveh Ehsani

COVID-19 and global oil markets

ABSTRACT The COVID-19 pandemic that spread rapidly across the world in early 2020 delivered a profound shock to oil markets and the broader fossil fuel industry. With demand for energy in free-fall as a result of the pandemic, world oil markets were simultaneously hit by the March 2020 “Oil Price War” between Russia and Saudi Arabia, which promised to significantly increase global supplies. As a result, global oil prices fell to multi-decade lows, and producers rushed to find storage space on land and sea for their oil rather than sell it at a loss. Remarkably, the price of West Texas Intermediate (WTI) fell into negative territory in mid-April 2020 as traders holding contracts for physical delivery were forced to pay others to take oil off their hands due to lack of storage space. This contribution maps the intersecting factors at the root of this moment of extreme crisis, asking what all this might mean for the organisation and power of the global oil industry moving forward.

Olive Wastes as a High-Potential by-Product: Variability of Their Phenolic Profiles, Antioxidant and Phytotoxic Properties

The global world olive oil industry produces large amounts of wastes and wastewaters. However, the disposal of these polluting by-products is a significant environmental problem owing to their high polyphenolic compounds. In order to learn possible ways of exploiting this waste, we investigated the phytochemical profiles, the phytotoxicity and the antioxidant activities of olive wastes (leaves, mill wastewater (OMWW) and mill solid waste (OMSW)). Leaf extracts exhibited the highest phytotoxic and antioxidant effects, which are mainly due to its phenolic content. The chromatographic profiles depicted eleven phenolic compounds belonging to secoiridoids, phenyl alcohols, phenolic acids, phenylethanoid glycoside, and flavonoids. Hydroxytyrosol and oleuropein were the main components in leaf methanol and OMWW extracts, respectively, exhibiting an amount of 13.05 and 4.39 mg/g DW. These results will help to demonstrate the possibility of utilizing olive wastes, particularly the leaf, as an inexpensive natural product, in food and agricultural applications.

The impact of institutional and cultural factors on the use of non-GAAP financial measures. International evidence from the oil and gas industry

While the main aim of Non-GAAP Financial Measures (NGFMs) is to increase the comparability of the performance, many studies highlight an opportunistic use aimed at distorting investors’ decisions. A recent stream of literature suggests that the conditions in which the company operates affect how NGFMs are used. Many studies focus on the impact of company-specific factors, while the role played by the institutional and cultural context remains scarcely investigated. This research analyses how institutional and cultural factors affect the propensity to disclose NGFMs, and both the materiality and the transparency of adjustments. The analysis is based on 1,731 quarterly press releases of 120 firms from the global Oil and Gas industry. The results show that the propensity to use NGFMs is reduced by a strong institutional system, while increased by the presence of a regulation on NGFMs’ disclosure and the adoption of International Financial Reporting Standards (IFRS). A strong legal system also reduces the materiality of the adjustments. Surprisingly, the presence of a regulation on NGFMs negatively affects the transparencyof the adjustments. Cultural factors, such as uncertainty avoidance and long-term orientation, reduce the propensity to disclose NGFMs and positively increase transparency. However, compared to institutional values, cultural factors play a less relevant role.

First report on quality and purity evaluations of avocado oil sold in the US

The demand for avocado oil has increased significantly as consumers resonate with its potential health benefits, however, due to the lack of enforceable standards, consumers are unprotected from fraud (i.e., economic motivated adulteration). This study analyzed avocado oils currently on the market in the US to evaluate their quality (e.g., free fatty acidity, peroxide value, UV absorbances, vitamin E) and purity (e.g., fatty acids, sterols, triacylglycerols). Our results showed that the majority of commercial samples were oxidized before reaching the expiration date listed on the bottle. In addition, adulteration with soybean oil at levels near 100% was confirmed in two “extra virgin” and one “refined” sample. These findings demonstrate there is an urgent need to develop standards for avocado oil not only to ensure the consumers receive high quality and authentic products but to establish a level playing field to support the continuing growth of global avocado oil industry.

The application of Great Lakes ecosystem - based science to the restoration of the Gulf: A successful case study

The Gulf (or Persian Gulf) suffers from multiple anthropogenic stressors relating primarily to its position as the centre of the global oil industry. Environmental degradation including oil spills, loss of coastal habitat, algal blooms and invasive species is evident but finding the right approach to address such degradation is challenging. The North American Great Lakes faced (and continues to face) similar challenges. The governments of Canada and the United States signed the Great Lakes Water Quality Agreement (GLWQA), which committed both countries to take concrete actions to protect the lakes. The GLWQA also offered a management framework called the Ecosystem Approach to deal with existing as well as emerging threats. A similar commitment to protect the Gulf, and more importantly the people who depend on it for their livelihood, is essential.

The oil and gas industry, the competence assessment of Offshore Installation Managers (OIMs) and Control Room Operators (CROs) in emergency response, and the lack of effective assessment of underpinning technical knowledge and understanding

Within the UKCS offshore oil and gas industry there exist key personnel who perform critical roles in an emergency as part of the installation's emergency response team (ERT), two of these personnel are the Offshore Installation Manager (OIM) and the offshore Control Room Operator (CRO). The OIM is responsible for the safety and well-being of all persons onboard and within 500 m of the installation. Should an emergency situation arise, the OIM performs one of the most critical roles in emergency response - management of the response to the emergency to mitigate and make safe the installation to secure a place of safety for persons onboard or organise their safe evacuation. Such emergency response shall also include limiting the loss of hydrocarbons to the environment. The CRO monitors and interprets the output from an installation's Distributed Control System (DCS) and Fire and Gas Panel (FGP), responding to alarms and deviations from steady state. In many instances, an offshore CRO's actions in response to these deviations can determine whether or not the situation deteriorates into a disaster. Should an emergency occur, the CRO will act in accordance with an installation's emergency response procedures and OIM instructions.The persistence of incidents, a number leading to disasters, in the industry highlights the importance of both OIM and CRO competence in controlling emergencies. Both positions require an effective system to assess the competence of job holders. Research at the University of Aberdeen identified potential barriers that can prevent the effective competence assessment of an OIM in emergency response. An extension to this research analyses the two offshore industry standards for competence in emergency response: OPITO 7025 – OIM Controlling Emergencies and OPITO 9004 – Control Room Operator Emergency Response, and associated documentation, applying a critical hermeneutic approach, focusing on the assessment of underpinning knowledge and understanding within the roles. The key findings are that there currently exists no effective means to assess the underpinning technical knowledge and understanding of either OIMs or CROs in emergency response within the offshore industry. Knowledge and, in particular, understanding are poorly defined within the relevant OPITO standards. There exists no validation of evidence collated to support an individual's underpinning knowledge and understanding and no truly independent audit of collated evidence or the process of assessment.The research is important to Duty Holders (see also OSD Installation Operators under UK Offshore Safety Directive Regulations) and employers within the offshore oil and gas industry, organisations associated with the offshore industry, safety engineers and UK Government departments with regard to the effectiveness of competence assessment of appointed OIMs and CROs. It is also significant to risk engineers when considering the probable competence of key emergency response personnel in a given environment at a given point in time. The research is not just applicable to the UKCS offshore industry but also to the global offshore oil and gas industry.

NATIONAL POLICIES AS IMPEDIMENT TO THE PARIS CLIMATE CHANGE AGREEMENT: THE UNITED STATES OF AMERICA IN FOCUS

This paper, in reliance of the ‘Metaphor of Two-Level Games Theory, examined the policy somersaults of successive administrations of the U.S. on global environmental issues. The paper discovered that domestic interests in the U.S. interfere with its global environmental issues. Climate change in the U.S. is politics intertwined on economic, political and social complexes often handled along party ideological leanings. The Republican Party, leadership, and supporters (e.g. the coal and fossil fuel industries) who are the principal owners/beneficiaries of agricultural and natural resource lands are adamant to accept climate change science; arguing policies and actions on climate change are likely to impact majorly on these interests and so reneges on climate science, not excluding organising backlashes against environmental groups. The paper recommended in making the case that the focus on the U.S. can inform developments elsewhere. Furthermore, it recommended that the average American and indeed the Republican Party followership should have a rethink to consider climate change as a subsisting calamity rather than trivialising climate change science on account of party identification, political ideology, relative concern about environmental conservation vis-à-vis economic growth and party’s affinity with the global oil industry.

Modern Technological Priorities of the Gas Industry Innovative Development

This article is devoted to modern technological priorities of the innovative development of the gas industry. It presents the pattern of capital investments in the global oil and gas industry. Technological priorities for the innovative development of the gas industry are identified. Basic trends in R&D are identified in the context of technological priorities of the gas industry. Target performance indicators and the period of effect are specified. The latest technological innovations in the gas exploration and production sector are reviewed. High-demand technologies and innovative developments of the Russian gas complex are presented in the following areas: geology, prospecting and exploration, field production, transportation and underground gas storage; hydrocarbon processing, ecology. Inactivity of the Russian gas industry in the field of innovation is noted

THE ISSUE OF PRICING POLICY IN OIL AND GAS SECTOR: WHY OIL PRICES RISING

The given article is devoted to the current issue of pricing policy in oil and gas sector. Particularly, it has been studied the factors, causes and consequences of oil prices rising. The research methodology of this paper is based on conducting the comparative analysis of existing patterns of macroeconomic development, political differences and social issues within global oil and gas industry providers. The given analysis is based on SWOT, PESTEL, cause and effect modeling, risk management techniques, as well as the five forces model by M. Porter detecting competitive advantages of the related countries. It is also implemented the systematic vision and expert assessment. Moreover, it has been considered the possible solutions and recommendations on how to improve the current global economic situation.

The risk of policy tipping and stranded carbon assets

If global warming is to stay below 2 °C, there are four risks of assets stranding. First, substantial fossil fuel reserves will be stranded at the end of the fossil era. Second, this is true for exploration capital too. Third, unanticipated changes in present or expected climate policy cause discrete jumps in today's valuation of physical and natural capital. Fourth, if timing and intensity of climate policy are uncertain, revaluation of assets occurs as uncertainty about future climate policy is resolved. To highlight these four effects, we use an analytical model of investment in exploration capital with intertemporal adjustment costs, reserves depletion and market capitalization, and calibrate it to the global oil and gas industry. Climate policy implements a carbon budget commensurate with 2 °C peak warming and we allow for immediate or delayed carbon taxes and renewable subsidies. The social welfare ranking of these instruments is inverse to that of the oil and gas industry which prefers renewable subsidy and delaying taxes for as long as possible. We also pay attention to how the legislative “risk” of tipping into policy action affects the timing of the end of the fossil era, the profitability of existing capital, and green paradox effects.

THE ISSUE OF PRICING POLICY IN OIL AND GAS SECTOR: WHY OIL PRICES ARE RISING

The given article is dedicated to the current issues of pricing policy in the oil & gas sector. Particularly, it studies the factors, causes and consequences of oil prices rising. The research methodology of this paper is comparative analysis of the existing patterns of macroeconomic development, political differences and social issues within the global oil and gas industry providers. The given analysis is based on SWOT, PESTLE, cause-effect modeling, risk management techniques, as well as the five forces model by M. Porter detecting competitive advantages of the related countries. The authors also consider possible solutions and provide recommendations on how to improve the current global economic situation in the given field.

Guest Editorial: Countering Security Issues in the Digital World

Guest editorial The adoption of digital technologies in the oil and gas industry is generating exciting new opportunities to improve performance, profitability, and sustainability, but brings new safety and security challenges across all operations. According to a 2017 survey by the Ponemon Institute, cyber attacks are on the rise. Successful breaches per company each year have risen more than 27%, from an average of 102 to 130. The energy and utilities industry, including oil and gas, suffered average annualized losses from cyber crime of $17.2 million per sampled organization, just behind the financial services sector at $18.2 million. In June 2017, the NotPetya computer virus affected many companies around the world, including the Russian oil and gas giant, Rosneft. In the same year, another report stated that almost three-quarters of US oil and gas companies had a cyber incident, yet only a handful cited cyber risk as a major concern in their annual reports. Cyber Concerns As the global oil and gas industry grasps the benefits that digitalization, automation, machine learning, and artificial intelligence can bring to production and profitability, its relatively immature cyber systems are making it an attractive soft target for hackers. The traditional focus of cyber security has been on IT, such as the office IT infrastructure. Now, there is an increasing trend for networks on production sites to be connected to wider corporate networks, to allow remote monitoring and control. This increases vulnerability. Managing operational technology, such as control and automation systems, requires both oil and gas operational domain competence, as well as proficiency in general information security. The level of threat depends on the level of communications. Cybersecurity can be simplest when data is moving in just one direction, for instance, from the production system into the corporate network. However, if using a remote or centralized control room, the need for protection becomes more pertinent and problematic, as control rooms must be able to alter critical offshore systems. The complexity and challenge for fail-safe security deepens if vendors are able to access and perhaps control equipment on the plant via corporate systems. As each rig operation involves a significant number of suppliers and contractors, all deploying safety critical systems, it is vital that the industry introduces controls and security barriers to eliminate any weaknesses. Without the understanding and knowledge of how to implement and integrate such systems securely, unnecessary risk and expense can be added to a project. Breaches can lead to lost production; raised health, safety, and environmental risk; costly damages claims; breach of insurance conditions; negative reputational impacts; and loss of licence to operate. Therefore, cybersecurity needs to be a consideration throughout the lifecycle of any project, especially across digital transition activity.

Challenges and their remedies while cementing production casing in high-temperature wells

The development of the global oil industry is closely related to the exploration of new oil and gas fields through the drilling new deep and ultra-deep wells, as well as the application of modern methods of hydrocarbon production. Usage of new methods of production, increasing the depth of the wells, bottomhole temperatures and pressures sets strict requirements and restrictions for the applied plugging materials. Oil well cements must have a long time of thickening to successfully complete the cementing process, grouting stone must have high strength characteristics, heat-resistant properties at high temperatures and provide reliable isolation of the annulus, also have corrosion resistance, ensure durability of the well lining.

Shifting needs for expertise: Digitized taskscapes in the Norwegian oil and gas industry

This article assesses the shaping of expertise within a small Norwegian firm distributing digital services to the global oil and gas industry. The oil price drop of 2014 shifted firm priorities from creating consulting reports about reliability of resource extracting operations to developing business intelligence software for oil and gas corporations. Drawing on data from ethnographic fieldwork, I seek to trace the transformation of knowledge practices within the intermediary. The investigation reveals that the taskscapes of the firm’s consultants and sales persons were increasingly directed toward interfaces, establishing new techniques of mediation between employees and clients. I argue that the researched firm underwent a successful transition toward the production of software because of its ability to locally transfer knowledge on its software among its internal professional groups.

Quantifying exposure levels of coastal facilities to oil spills in Bahrain, Arabian Gulf.

The Arabian Gulf is considered as a hub for global oil industry. Thus the Arabian Gulf marine environment is under permanent threat from oil spills due to oil exploitation, production, and transportation. Oil pollution poses adverse effects on marine environment, society, and economy. Oil spill incidents that occurred in Bahrain caused damage to marine environment and threatened the vital coastal facilities along the coastline of Bahrain. This study determined the exposure levels of coastal facilities in Bahrain to oil spills. The General NOAA Operational Modeling Environment (GNOME) model was validated and applied to hypothetical oil spill scenarios. The modeling results showed that the coastal facilities on the north-eastern coastline are more probable to be hit by oil spills, while those on the northern coastline are susceptible to receive more quantity of oil. The time required for oil to reach the western coastline is shorter compared to the other coastlines. The modeling outcomes can be utilized in contingency planning, setting the protection priorities and allocation and mobilization of response resources in both governmental and private sectors. The implications of the present study could be applied on a regional scale to ensure an integrated response to combat and or minimize oil pollution in the Arabian Gulf.

Touraj Atabaki, Elisabetta Bini and Kaveh Ehsani (eds), Working for Oil: Comparative Social Histories of Labor in The Global Oil Industry

Touraj Atabaki, Elisabetta Bini and Kaveh Ehsani (eds), <i>Working for Oil: Comparative Social Histories of Labor in The Global Oil Industry</i>