IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v69y2014icp489-500.html
   My bibliography  Save this article

Plumbing the depths: Utilizing O&G reserve profiles to develop forward-looking risk assessments for exploration and production activities

Author

Listed:
  • Botelho, Tatiana
  • Magrini, Alessandra
  • Schaeffer, Roberto

Abstract

The deepwater horizon accident may have shaken the sustainability ratings and indices credibility, but it also reinforced their importance. The objective of this article is to contribute to the improvement of corporate sustainability valuations by investigating if reserves profiles can affect the environmental risk exposure of an Oil & Gas (O&G) corporation. Data on reserves from 2009 to 2012 of 24 listed O&G companies were used to test six hypotheses, addressing how these profiles could relate to the four material environmental risks: climate change, accidents, sensitive area/access, water. The frequency with which companies reported these risks was evaluated using key word in context (KWIC) content analysis. Analysis of variance (Anova) and Student׳s t tests were applied to each of the hypotheses. This study shows environmental risks are embedded with the oil and gas reserves. We found the following relationships: (1) companies with heavy oil reserves report more exposure to climate change risks, particularly emissions control; (2) water is more of an issue with companies with higher bitumen and natural gas reserves; and (3) there is significant regional bias in the reporting of the environmental risk factors. These findings have broad implications for the financial industry, governments, investors and lenders alike.

Suggested Citation

  • Botelho, Tatiana & Magrini, Alessandra & Schaeffer, Roberto, 2014. "Plumbing the depths: Utilizing O&G reserve profiles to develop forward-looking risk assessments for exploration and production activities," Energy Policy, Elsevier, vol. 69(C), pages 489-500.
    • Handle: RePEc:eee:enepol:v:69:y:2014:i:c:p:489-500
    DOI: 10.1016/j.enpol.2014.02.015
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421514001049
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2014.02.015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cho, Charles H. & Roberts, Robin W. & Patten, Dennis M., 2010. "The language of US corporate environmental disclosure," Accounting, Organizations and Society, Elsevier, vol. 35(4), pages 431-443, May.
    2. Linsley, Philip M. & Shrives, Philip J., 2006. "Risk reporting: A study of risk disclosures in the annual reports of UK companies," The British Accounting Review, Elsevier, vol. 38(4), pages 387-404.
    3. Méjean, Aurélie & Hope, Chris, 2008. "Modelling the costs of non-conventional oil: A case study of Canadian bitumen," Energy Policy, Elsevier, vol. 36(11), pages 4205-4216, November.
    4. Tsoskounoglou, Miltos & Ayerides, George & Tritopoulou, Efi, 2008. "The end of cheap oil: Current status and prospects," Energy Policy, Elsevier, vol. 36(10), pages 3797-3806, October.
    5. Kretzschmar, Gavin L. & Sharifzyanova, Liliya, 2010. "Limits to international diversification in oil & gas – Domestic vs foreign asset control," Energy, Elsevier, vol. 35(1), pages 468-477.
    6. Scholtens, Bert & Boersen, Arieke, 2011. "Stocks and energy shocks: The impact of energy accidents on stock market value," Energy, Elsevier, vol. 36(3), pages 1698-1702.
    7. Magali Delmas & Vered Doctori Blass, 2010. "Measuring corporate environmental performance: the trade‐offs of sustainability ratings," Business Strategy and the Environment, Wiley Blackwell, vol. 19(4), pages 245-260, May.
    8. Stephen Fowler & C. Hope, 2007. "A Critical Review of Sustainable Business Indices and their Impact," Journal of Business Ethics, Springer, vol. 76(3), pages 243-252, December.
    9. Luis Escobar & Harrie Vredenburg, 2011. "Multinational Oil Companies and the Adoption of Sustainable Development: A Resource-Based and Institutional Theory Interpretation of Adoption Heterogeneity," Journal of Business Ethics, Springer, vol. 98(1), pages 39-65, January.
    10. Aaron K. Chatterji & David I. Levine & Michael W. Toffel, 2009. "How Well Do Social Ratings Actually Measure Corporate Social Responsibility?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(1), pages 125-169, March.
    11. Levy David L. & Kolk Ans, 2002. "Strategic Responses to Global Climate Change: Conflicting Pressures on Multinationals in the Oil Industry," Business and Politics, De Gruyter, vol. 4(3), pages 1-27, November.
    12. Frank Packer & Nikola Tarashev, 2011. "Rating methodologies for banks," BIS Quarterly Review, Bank for International Settlements, June.
    13. Geoffrey R. Frost, 2007. "The Introduction of Mandatory Environmental Reporting Guidelines: Australian Evidence," Abacus, Accounting Foundation, University of Sydney, vol. 43(2), pages 190-216, June.
    14. Harsem, Øistein & Eide, Arne & Heen, Knut, 2011. "Factors influencing future oil and gas prospects in the Arctic," Energy Policy, Elsevier, vol. 39(12), pages 8037-8045.
    15. Pegg, Scott, 2012. "Social responsibility and resource extraction: Are Chinese oil companies different?," Resources Policy, Elsevier, vol. 37(2), pages 160-167.
    16. Muehlenbachs, Lucija & Cohen, Mark A. & Gerarden, Todd, 2013. "The impact of water depth on safety and environmental performance in offshore oil and gas production," Energy Policy, Elsevier, vol. 55(C), pages 699-705.
    17. Jon Birger Skjærseth & Tora Skodvin, 2001. "Climate Change and the Oil Industry: Common Problems, Different Strategies," Global Environmental Politics, MIT Press, vol. 1(4), pages 43-64, November.
    18. Levy, David L. & Kolk, Ans, 2002. "Strategic Responses to Global Climate Change: Conflicting Pressures on Multinationals in the Oil Industry," Business and Politics, Cambridge University Press, vol. 4(3), pages 275-300, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christopher Durugbo & Joseph Amankwah‐Amoah, 2019. "Global sustainability under uncertainty: How do multinationals craft regulatory policies?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(6), pages 1500-1516, November.
    2. Tiberio Daddi & Niccolò Maria Todaro & Maria Rosa De Giacomo & Marco Frey, 2018. "A Systematic Review of the Use of Organization and Management Theories in Climate Change Studies," Business Strategy and the Environment, Wiley Blackwell, vol. 27(4), pages 456-474, May.
    3. Konstantinos Evangelinos & Ioannis Nikolaou & Walter Leal Filho, 2015. "The Effects of Climate Change Policy on the Business Community: A Corporate Environmental Accounting Perspective," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 22(5), pages 257-270, September.
    4. Jieun Chung & Charles H. Cho, 2018. "Current Trends within Social and Environmental Accounting Research: A Literature Review," Accounting Perspectives, John Wiley & Sons, vol. 17(2), pages 207-239, June.
    5. Zhou, Xi & Ying, Sammy Xiaoyan & You, Jiaxing & Wu, Huiying, 2024. "Like parent, like child: MNCs’ CSR and their foreign subsidiaries’ environmental footprint," Journal of Business Research, Elsevier, vol. 172(C).
    6. Sueyoshi, Toshiyuki & Wang, Derek, 2018. "DEA environmental assessment on US petroleum industry: Non-radial approach with translation invariance in time horizon," Energy Economics, Elsevier, vol. 72(C), pages 276-289.
    7. Derek Wang & Tianchi Li, 2018. "Carbon Emission Performance of Independent Oil and Natural Gas Producers in the United States," Sustainability, MDPI, vol. 10(1), pages 1-18, January.
    8. Jon Skjærseth, 2013. "Governance by EU emissions trading: resistance or innovation in the oil industry?," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 13(1), pages 31-48, March.
    9. Samuel Drempetic & Christian Klein & Bernhard Zwergel, 2020. "The Influence of Firm Size on the ESG Score: Corporate Sustainability Ratings Under Review," Journal of Business Ethics, Springer, vol. 167(2), pages 333-360, November.
    10. Christian Lebelhuber & Dorothea Greiling, 2022. "Strategic response to institutional pressures of climate change: an exploration among gas sector companies," Review of Managerial Science, Springer, vol. 16(3), pages 863-905, April.
    11. Harish Kumar Jeswani & Walter Wehrmeyer & Yacob Mulugetta, 2008. "How warm is the corporate response to climate change? Evidence from Pakistan and the UK," Business Strategy and the Environment, Wiley Blackwell, vol. 17(1), pages 46-60, January.
    12. Sarasini, Steven, 2013. "Institutional work and climate change: Corporate political action in the Swedish electricity industry," Energy Policy, Elsevier, vol. 56(C), pages 480-489.
    13. Denis Cormier & Michel Magnan, 2015. "The Economic Relevance of Environmental Disclosure and its Impact on Corporate Legitimacy: An Empirical Investigation," Business Strategy and the Environment, Wiley Blackwell, vol. 24(6), pages 431-450, September.
    14. Øyvind Ihlen, 2009. "The oxymoron of ‘sustainable oil production’: the case of the Norwegian oil industry," Business Strategy and the Environment, Wiley Blackwell, vol. 18(1), pages 53-63, January.
    15. Chaiyapa, Warathida & Esteban, Miguel & Kameyama, Yasuko, 2016. "Sectoral approaches establishment for climate change mitigation in Thailand upstream oil and gas industry," Energy Policy, Elsevier, vol. 94(C), pages 204-213.
    16. Gary F. Peters & Andrea M. Romi & Juan Manuel Sanchez, 2019. "The Influence of Corporate Sustainability Officers on Performance," Journal of Business Ethics, Springer, vol. 159(4), pages 1065-1087, November.
    17. Natalie Slawinski & Jonatan Pinkse & Timo Busch & Subhabrata Bobby Banerjeed, 2014. "The role of short-termism and uncertainty in organizational inaction on climate change: multilevel framework," Working Papers hal-00961226, HAL.
    18. Binh Hoang Duc & Khang Do Ba, 2017. "Business responses to climate change: strategies for reducing greenhouse gas emissions in Vietnam," Asia Pacific Business Review, Taylor & Francis Journals, vol. 23(4), pages 596-620, August.
    19. Alice Martini, 2019. "Socially responsible investing: from the ethical origins to the sustainable development framework of the european union," Public Finance Research Papers 36, Istituto di Economia e Finanza, DSGE, Sapienza University of Rome.
    20. Mäkitie, Tuukka & Normann, Håkon E. & Thune, Taran M. & Sraml Gonzalez, Jakoba, 2019. "The green flings: Norwegian oil and gas industry’s engagement in offshore wind power," Energy Policy, Elsevier, vol. 127(C), pages 269-279.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:69:y:2014:i:c:p:489-500. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.