Business process reengineering and financial stability of listed oil and gas companies in Nigeria

Financial stability is fundamental to the accomplishment of every organization. However, the issues of unaccountable barrel of crude per day, oil price volatility, complexity of drilling and production process, Niger-Delta crisis, endemic corruption, illiquidity, and high cost of production have adversely affected liquidity, profitability, capital adequacy, asset quality and tangibility and firm size. There seems to be paucity of studies on the effect of business process reengineering on financial stability in the oil and gas sector in Nigeria. This study examined the effect of business process reengineering on financial stability of selected listed oil and gas companies in Nigeria. The research design employed was ex-post facto research design and thirteen selected listed oil and gas companies in Nigeria were considered and purposive sampling technique was employed. The study secondary data were subjected to pre-diagnostic tests which showed that the study variables were normally distributed, no heteroskedascity problem and stationarity at different levels and analysed the secondary data using descriptive and pooled, random and fixed panel regression method of analyses.  Findings revealed that Post- Business Process Re-engineering measures significantly affect liquidity of quoted oil and gas companies in Nigeria (Wald chi2 = 18.92, R2= 0.32, P< 0.05); Post-Business Process Re-engineering measures significantly affect gross profit margin and net profit margin of quoted oil and gas companies in Nigeria (Wald chi2 = 14.32, R2= 0.22, P< 0.05; Wald chi2 = 9.35, R2= 0.19, P< 0.05) while Pre--Business Process Re-engineering measures significantly affect return on assets of quoted oil and gas companies in Nigeria (Wald chi2 = 10.77, R2= 0.15, P< 0.05). The study concluded that Post-Business Process Re-engineering measuressignificantly affect financial stability components in terms of liquidity, profitability, capital adequacy and asset quality and tangibility of quoted oil and gas companies in Nigeria. Therefore, the study recommended that quoted oil and gas companies in Nigeria should embraced business process re-engineering measures in order to achieve sound financial stability and aggregate financial performance in the oil and gas industry.