Subject. The article discusses the key profitability metrics of the largest public companies in the oil and gas (O&G) industry from 2006 to 2018. The analysis encompasses ExxonMobil, Chevron, ConocoPhillips, Occidental Petroleum, Devon Energy, Anadarko Petroleum, EOG Resources, Apache, Marathon Oil, Imperial Oil, Suncor Energy, Husky Energy, Canadian Natural Resources, Royal Dutch Shell, BP, TOTAL, Eni, Equinor (Statoil), PetroChina, Sinopec, CNOOC, Petrobras, PJSC Gazprom, PJSC Rosneft Oil Company и PJSC LUKOIL. Objectives. The study assesses key profitability metrics of leading public corporations in oil and gas, identifies key trends in their developments as part of the analyzable period. We also determine what triggered such a transformation. Methods. We employed methods of comparative and financial-economic analysis, summarized official annual reports on financial and business operations prepared by major public O&G corporations. Results. Upon the comprehensive analysis of balance sheets prepared by 25 O&G corporations, we evaluated the dynamics of key profitability indicators in the public segment of O&G industry and determined what triggered the transformation. Conclusions and Relevance. For the analyzable period, major public O&G corporations were found to have become less profitable, especially manifesting this during the global financial and sectoral crisis. Some independent U.S. corporations are facing the most difficult situation. The public segment saw their profitability indicators fall, because the growth rate of operational expenses exceeded revenue predominantly due to costs of wear and tear, depletion and depreciation. What else affected the corporations was a considerable increase in the carrying amount of non-working assets. The public segment of O&G industry was discovered to observe gradually lowering income tax burden per unit of net revenue from core operations.
Keywords: net profit to revenue ratio, return on assets, return on equity, public company, Oil & Gas
References:
Velikaya E.G., Churko V.V. [Indicators to Assess the Effectiveness of the Organization]. Baltiiskii gumanitarnyi zhurnal = Baltic Humanitarian Journal, 2014, no. 2, pp. 57–61. URL: Link (In Russ.)
Vedmed' I.Yu., Sokolovskaya G.R. [Valuation of the oil and gas company in line with risk factors: Evidence from Gazpromneft]. Finansovaya analitika: problemy i resheniya = Financial Analytics: Science and Experience, 2016, no. 41, pp. 24–30. URL: Link (In Russ.)
Voronina E.V. [Estimation of financial results, market attractiveness and value of the corporations in the oil and gas industry]. Upravlenie ekonomicheskimi sistemami, 2012, no. 8. (In Russ.) URL: Link
Aliev A.A. [A methodological approach to assessing the financial capacity of innovative development: The SOCAR oil and gas company]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2016, no. 7, pp. 153–161. URL: Link (In Russ.)
Chistyakova G.A. [Oil and gas company performance evaluation of operations]. Upravlenie ekonomicheskimi sistemami, 2015, no. 4. (In Russ.) URL: Link
Eder L.V., Filimonova I.V., Mochalov R.A. [The effectiveness of business strategies of the Russian oil and gas companies]. Burenie i neft' = Drilling and Oil, 2015, no. 3, pp. 3–10. URL: Link (In Russ.)
Lenkova O.V., Osinovskaya I.V. [External Benchmarking Performance Indicators of Russian Oil Companies]. Sovremennye problemy nauki i obrazovaniya, 2014, no. 2. (In Russ.) URL: Link
Boldanova E.V. [Determining the Dependence of the Profitability of Oil and Gas Companies on Oil Quotation]. Azimut nauchnykh issledovanii: ekonomika i upravlenie = ASR: Economics and Management, 2018, vol. 7, no. 4, pp. 56–58. URL: Link (In Russ.)
Nureev R.M., Busygin E.G. [Biggest Public Oil Companies: Impact of External and Internal Factors on Capitalization]. Finansy: teoriya i praktika = Finance: Theory and Practice, 2019, vol. 23, no. 5, pp. 87–100. (In Russ.) URL: Link
Shimko O.V. Analiz rezul'tatov finansovo-khozyaistvennoi deyatel'nosti vedushchikh publichnykh korporatsii neftegazovoi otrasli posle mirovogo finansovogo krizisa [Analyzing results of financial and business results of major public Oil & Gas corporations after the global financial crisis]. Moscow, Nauka Publ., 2019, 339 p.