Factors Influencing Financial Performance of Selected BSE Listed Oil Exploration and Production Companies in India

Abstract

Operational efficiency and production costs are also crucial, as companies with lower costs or advanced technologies in exploration and drilling can outperform competitors. Moreover, currency exchange rates, particularly the rupee’s fluctuation against the dollar, impact import costs, especially since India imports most of its crude oil. As the energy consumption demand continues to rise domestically, driven by industrial growth and urbanization, this creates revenue opportunities, although shifts toward renewable energy present long-term challenges. The companies' financial performance is also influenced by corporate governance practices, debt management, and foreign exchange risks. Technological advancements in exploration, such as seismic surveys and fracking, improve production efficiency, thus enhancing profitability. Environmental, social, and governance (ESG) concerns have become increasingly relevant, with companies focusing on compliance to avoid penalties and reputational damage. Lastly, factors such as macroeconomic conditions, competitive positioning, and the size of a company’s oil reserves determine its financial stability and potential for growth. Successful partnerships and risk management strategies, particularly in mitigating crude oil price fluctuations, are also essential in maintaining robust financial health.