Financial Performance Analysis Before and After the Decline in Oil Production: Case Study in Indonesian Oil and Gas Industry


  • Wiwiek Mardawiyah Daryanto
  • Dety Nurfadilah





Financial performance, oil price, solvency, profitability, SEOs


Indonesia’s oil and gas industry is the huge contributor to government export revenues and foreign exchange and contributes a substantial amount to state revenue. However, the total of oil production declined around 4,41% per year since 2007, and the sharpest decline was in 2013. This situation gives impact to the performance of oil and gas industry, especially government revenues. Therefore, the purpose of this study is to measure the financial performance of Oil and Gas Industry and to examine the significance differences between the financial performance before and after the decline in oil and gas production. The data were collected from financial report and the period was divided into two periods, before the decline in production (2011 – 2012) and after the decline in production (2014 – 2015). Paired sample t-test and financial ratio analysis (FRA) were used to analyzed the data. The finding shows that the largest oil and gas company in Indonesia is still in good financial condition, although it gained loss. In addition, current ratio and return on equity had significance difference during the period of before and after a decline in oil and gas production. The authors believe that the findings will be helpful for managers who continuously attempt to explore opportunities to provide a higher return.



[1] Frederer J. Oil Price Volatility and Macroeconomy: A solution to the asymmetry Puzzle. Journal of Macroeconomics. 1996;18(1):1-26.

[2] Anzuini A, Lombardi MJ, Pagano P. The impact of monetary policy shocks on commodity prices. 2012.

[3] Regnier E. Oil and energy price volatility. Energy Economics. 2007;29(3):405-27.

[4] Belke A, Orth W, Setzer R. Liquidity and the dynamic pattern of asset price adjustment: A global view. Journal of Banking & Finance. 2010;34(8):1933-45.

[5] Ratti RA, Vespignani JL. Why are crude oil prices high when global activity is weak? Economics Letters. 2013;121(1):133-6.

[6] Rohimat I, Sutarman AP. ANALISIS PENGARUH COSTUMER RELATIONSHIP MARKETING TERHADAP SISTEM DISTRIBUSI LPG 3KG (Studi Kasus pada Kecamatan Cisitu dan Wado Kab. Sumedang): UNPAS; 2016.

[7] Chong ZR, Yang SHB, Babu P, Linga P, Li X-S. Review of natural gas hydrates as an energy resource: Prospects and challenges. Applied Energy. 2016;162:1633-52.

[8] Reuters T. Thomson Reuters 2016 Know Your Customer Surveys Reveal Escalating Costs and Complexity. Thomson Reuters. 2016;9.

[9] Frecka TJ, Lee CF. Generalized financial ratio adjustment processes and their implications. Journal of Accounting Research. 1983:308-16.

[10] McMahon RG, Davies LG. Financial reporting and analysis practices in small enterprises: their association with growth rate and financial performance. Journal of Small Business Management. 1994;32(1):9.

[11] Voulgaris F, Doumpos M, Zopounidis C. On the evaluation of Greek industrial SME's performance via multicriteria analysis of financial ratios. Small business economics. 2000;15(2):127-36.

[12] Black D, Van Der Westhuizen J. The allure of global games for'semi-peripheral'polities and spaces: a research agenda. Third world quarterly. 2004;25(7):1195-214.

[13] O'DONNELL C, Van Der Westhuizen G. Regional comparisons of banking performance in South Africa. South African Journal of Economics. 2002;70(3):224-40.

[14] Cooper PW. Survey BisnisKeluarga 2014. 2014.

[15] Charliepaul CK, Megaladevi K, Coimbatore C, editors. CONTROVERSY TREND DETECTION IN SOCIAL MEDIA. ideas; 2015.

[16] Waddock SA, Graves SB. The corporate social performance–financial performance link. Strategic management journal. 1997;18(4):303-19.

[17] Cochran PL, Wood RA. Corporate social responsibility and financial performance. Academy of management Journal. 1984;27(1):42-56.

[18] Alexander GJ, Buchholz RA. Corporate social responsibility and stock market performance. Academy of Management journal. 1978;21(3):479-86.

[19] Vance SC. Are socially responsible corporations good investment risks. Management review. 1975;64(8):19-24.

[20] McGuire JB, Sundgren A, Schneeweis T. Corporate social responsibility and firm financial performance. Academy of management Journal. 1988;31(4):854-72.

[21] McGuire J, Schneeweis T, Hill J. An analysis of alternative measures of strategic performance. Advances in strategic management. 1986;4(2):1986.

[22] Halkos GE, Salamouris DS. Efficiency measurement of the Greek commercial banks with the use of financial ratios: a data envelopment analysis approach. Management accounting research. 2004;15(2):201-24.

[23] Tarawneh M. A comparison of financial performance in the banking sector: Some evidence from Omani commercial banks. International Research Journal of Finance and Economics. 2006;3(3):101-12.

[24] Iskakov S, Yilmaz N. Performance Evaluation Of Major Integrated Oil & Gas Companies. International Journal of Economics, Commerce and Management. 2015;3(6):332-61.

[25] Purwanegara M, Apriningsih A, Andika F. Snapshot on Indonesia regulation in mobile internet banking users attitudes. Procedia-Social and Behavioral Sciences. 2014;115:147-55.

[26] McNichols CW, Zimmerer TW. Situational ethics: An empirical study of differentiators of student attitudes. Journal of Business Ethics. 1985;4(3):175-80.

[27] Taiwo AS. The influence of work environment on workers productivity: A case of selected oil and gas industry in Lagos, Nigeria. African Journal of Business Management. 2010;4(3):299-307.

View Full Article:

How to Cite

Mardawiyah Daryanto, W., & Nurfadilah, D. (2018). Financial Performance Analysis Before and After the Decline in Oil Production: Case Study in Indonesian Oil and Gas Industry. International Journal of Engineering & Technology, 7(3.21), 10–15.
Received 2018-08-08
Accepted 2018-08-08
Published 2018-08-08