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Effects of Ownership and Business Portfolio on Production in the Oil and Gas Industry

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  • Binlei Gong

Abstract

The Shale Revolution and the two oil crises have overwhelmingly reshaped the petroleum industry in the last decade. Heterogeneity across companies is also a big concern as many multi-product (oil and gas) and multi-segment (upstream and downstream) firms exist, both state-owned and privately-owned. Therefore, a varying coefficient model is introduced to capture the effects of time, ownership, and business portfolio on both productivity and input elasticities to closely observe the fundamental transition, which is further interpreted using decomposition equations. The shape of the production function is indeed firm- and time-variant, which confirms the transition of the industry and the necessity of using the varying coefficient model. The average productivity achieved tremendous growth after the 2007-2009 financial crisis but lost momentum following the 2014 price crash. Finally, privately-owned, gas production and downstream activities are more productive than state-owned, oil production and upstream activities, respectively. Some policy implications are also discussed.

Suggested Citation

  • Binlei Gong, 2020. "Effects of Ownership and Business Portfolio on Production in the Oil and Gas Industry," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    • Handle: RePEc:aen:journl:ej41-1-gong
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    Citations

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    Cited by:

    1. Binlei Gong, 2020. "New Growth Accounting," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(2), pages 641-661, March.
    2. Zhang, Qizheng & Qian, Zesen & Wang, Shuo & Yuan, Lingran & Gong, Binlei, 2022. "Productivity drain or productivity gain? The effect of new technology adoption in the oilfield market," Energy Economics, Elsevier, vol. 108(C).
    3. Binlei Gong & Robin C. Sickles, 2020. "Non-structural and structural models in productivity analysis: study of the British Isles during the 2007–2009 financial crisis," Journal of Productivity Analysis, Springer, vol. 53(2), pages 243-263, April.
    4. Gong, Binlei, 2020. "Agricultural productivity convergence in China," China Economic Review, Elsevier, vol. 60(C).
    5. Binlei Gong & Robin C. Sickles, 2021. "Resource allocation in multi-divisional multi-product firms," Journal of Productivity Analysis, Springer, vol. 55(2), pages 47-70, April.
    6. Al-Mana, Ali A. & Nawaz, Waqas & Kamal, Athar & Koҫ, Muammer, 2020. "Financial and operational efficiencies of national and international oil companies: An empirical investigation," Resources Policy, Elsevier, vol. 68(C).
    7. Anis Ali & Nadeem Fatima, 2023. "Growth and Financial Performance Governance by the Total Resources: A Case of Indian Downstream Oil and Gas Firms," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 141-148, May.
    8. Vitor Miguel Ribeiro & Gustavo Soutinho & Isabel Soares, 2023. "Natural Gas Prices in the Framework of European Union’s Energy Transition: Assessing Evolution and Drivers," Energies, MDPI, vol. 16(4), pages 1-46, February.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

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