Environmental Remediation Cost and Financial Performance of Oil
and Gas Companies in Nigeria

Korolo; Emmanuel Omolaye (Ph.D); Korolo; Akuboere Salome (Ph.D)

doi:10.56201/ijefm.v9.no4.2024.pg1.20

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Environmental Remediation Cost and Financial Performance of Oil and Gas Companies in Nigeria

Korolo, Emmanuel Omolaye (Ph.D) and Korolo, Akuboere Salome (Ph.D)

Abstract

This study investigates the relationship between environmental remediation costs and the financial performance of oil and gas companies in Nigeria. The specific objectives of the study were to determine whether environmental Pollution Prevention Cost and environmental Pollution Detection Cost have any effect on the financial performance of oil and gas companies in Nigeria using return on assets (ROA) as a measure of corporate financial performance. Ex-post facto research design was used and the study used secondary data from annual reports of sampled companies for the relevant years under consideration (2018-2022) The ordinary Least Squares regression technique was employed to investigate the relationship existing between the variables. The study found that environmental prevention cost has a negative and insignificant effect on the return on assets of oil and gas companies in Nigeria while environmental detection cost has a positive and significant effect on the Return on assets of oil and gas companies in Nigeria. Based on the findings of the study, the study concludes that there is a need for prudent management of environmental costs which will lead to both ecological stewardship and financial resilience. The study recommends amongst others that Management should develop a well-articulated employee health and safety cost system to guarantee a conflict-free corporate atmosphere needed by managers and workers for maximum productivity.

Keywords

BeredugoS. B.& MeforI. P. (2012). The impact of environmental accounting and reporting on sustainable development in Nigeria. Research Journal of Finance and Accounting 3(7)55- 64. Bessong

References

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Environmental Remediation Cost and Financial Performance of Oil and Gas Companies in Nigeria

Abstract

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