Impact of oil prices on profitability and investment activity of oil companies from central and eastern europe

Abstract

In this text, we analyze the profitability and investments trends of oil companies from Central and Eastern Europe (CEE1)over the period 2008-2019. Based on descriptive statistics, comparative analysis, and panel data analysis, we show that: (1) CEE oil companies increased profitability in the period 2008-2019; (2) in the second sub-period (2015-2019), when the oil price was lower, ROACE of CEE oil companies exceeded ROACE of global major oil and gas companies; (3) in the second sub-period investment activity continued to be relatively high; and (4) oil price had less influenceon profitability and investment activities of CEE oil companies in comparison to oil majors. It is also showed that the upstream segment is less important for CEE oil companies than for major oil companies and the contribution of upstream segment to profitability of the companies was reduced during the period of lower oil prices.