The Impact on, and the Required Financial Transformations for, a firm operating in the Saudi Arabia Oil and Gas Sector: A Case Study of Response to Industrial National Economic Transition
DOI:
https://doi.org/10.70301/Keywords:
Economic restructuring, economic transition, Saudi Arabian Oil and Gas Sector, renewable energy, Government vision, financial transformations, financial diversification, business strategy, business sustainabilityAbstract
As Saudi Arabia adopts strategies to transition into a non-oil economy, the fate of the affected companies remains unclear. The present research utilized a mixed method to explore the impact of economic restructuring and the necessary financial adjustments that firms in the Saudi Arabian oil sector can adopt. The existing literature uncovered several economic restructuring initiatives, including the government vision, renewable energy, and expansion of non-oil sectors. While most of the existing literature focused on the general implications of the transition to a non-oil sector, few studies concentrated on the actual impact on the oil sector. Therefore, the present study explored the impact of this transition on the business sustainability and business strategy of firms in the Saudi oil and gas sector and the financial strategies they can adopt to maneuver the changing economic landscape. This is significant as it delves into the necessity for firms within the Saudi Arabian oil sector to adjust their operational strategies and financial frameworks amid transformative shifts in the oil sector, safeguarding their future resilience and market relevance. The main findings show that economic restructuring initiatives, such as the government’s 2030 vision and renewable energy, negatively impact the firms’ strategy and sustainability capabilities. Hence, some financial initiatives required include additional investments, technology and innovation, and financial diversification. The study makes significant contributions by revealing practical strategies that firms, policymakers, and stakeholders in the Saudi Arabian oil sector and other sectors facing similar challenges can integrate into their business operations.
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