Financial risk management is crucial for the sustainability and growth of the oil and gas industry in developing economies, where volatility and regulatory uncertainties present significant challenges. This abstract explores the construction of a theoretical framework for financial risk management, adapting global best practices to the specific contexts of emerging markets within the oil and gas sector. In developing economies, the oil and gas industry faces unique risks such as geopolitical instability, currency fluctuations, and regulatory changes. Effective financial risk management mitigates these risks through proactive strategies that balance risk exposure with strategic objectives. Adopting global best practices involves the integration of comprehensive risk assessment methodologies, scenario planning, and hedging techniques tailored to local market conditions. Key components of the theoretical framework include risk identification through comprehensive analysis of market, operational, and financial factors. This approach enables oil and gas companies to anticipate and mitigate risks before they escalate, ensuring financial stability and resilience in volatile environments. Furthermore, the application of global best practices in financial risk management fosters transparency and accountability, enhancing investor confidence and facilitating access to capital. By aligning risk management strategies with international standards and benchmarks, developing economy oil and gas firms can navigate uncertainty more effectively, thereby optimizing operational performance and sustaining long-term growth. However, challenges such as limited access to sophisticated financial instruments and expertise may hinder effective implementation. Overcoming these barriers requires capacity building, collaboration with experienced partners, and continuous adaptation of strategies to evolving market dynamics. In conclusion, building a theoretical framework for financial risk management in the oil and gas industry in developing economies is essential for mitigating volatility and maximizing opportunities. By applying global best practices tailored to local contexts, companies can strengthen their resilience, attract investment, and drive sustainable development in emerging markets.