A few years after the year 2000, there was a general rise in the cost per unit of gas and oil due to the increased reliance of a major source of energy. Oil and gas investment became very attractive among such opportunities with petroleum investments among the most attractive opportunities. The Organization of Petroleum Exporting Countries estimated that in 2008 the energy requirements raised oil demands to between 86 and 87 million barrels per day.
Tax exempt investment in an oil or gas trust should be considered by the investor seeking direct sector exposure. The process involves investing in the production stage, or during the purchase of exploratory drilling machinery. The process provides a pass through treatment from investments and incomes in this energy sector, with mutual funds and future contracts in the oil sectors being the most common investment undertaken.
The oil and gas industry offers a number of investment opportunities with investment in shares available at any time. It is safe to say that any investor has an opportunity waiting for them. For example, an investor can have an investment in oil drilling, as well as in the company's future contracts. Cautionary measures should always be taken like all other investment opportunities where investors need to carefully research all risks.
Oil and gas are now the world's foremost sources of energy ensuring the industries are a major force in the world's economy. A perfect example of these multi-purpose sources of energy is petroleum as it has many uses from providing lubrication to machinery, to being a component in the manufacturing of plastics.
Exploration opportunities involve companies leasing or buying land and prospect to make money through drilling. This is a risky investment as striking oil is not a guarantee. Income opportunities involve the acquisition of land or plots near proven energy reserves. Energy investments require certain services and support services, hence some opportunities come up such as transportation services; pipeline companies for the transportation of the drilled oil; other companies include the shipping and logistics companies manufacturers of equipment ;refiners; and rigging companies.
Historically the oil industry has played the role of a diversifier in the economy as when oil and gas prices rose, the economy would generally be slow. Investors in the energy industry are cautioned of this trend. Also, large profits are realized which can even amount to 10 times the initial capital invested. The sector also enjoys many tax advantages as most tax is invisible to a shareholder who buys shares from a public traded stock.
When oil or gas is not found during drilling, huge losses can be suffered by investors due to the volatility of these sectors. Shares in smaller companies are harder to liquidate and usually require direct contact with the company. The use of a broker can incur commissions of more than 20% of liquidation funds received.
Another risk includes people risk. The professional ability of the explorer cannot be underestimated as the experience of the operator plays a key role in profit realization. There are mechanical risks, as the actual oil and gas exploration involve a lot of activities hence all the mechanical questions must be answered prior to the actual drilling. The reserve risk takes into consideration the well control and the seismic evaluation of the well. Finally, the commodity price risk must be catered for.
Tax exempt investment in an oil or gas trust should be considered by the investor seeking direct sector exposure. The process involves investing in the production stage, or during the purchase of exploratory drilling machinery. The process provides a pass through treatment from investments and incomes in this energy sector, with mutual funds and future contracts in the oil sectors being the most common investment undertaken.
The oil and gas industry offers a number of investment opportunities with investment in shares available at any time. It is safe to say that any investor has an opportunity waiting for them. For example, an investor can have an investment in oil drilling, as well as in the company's future contracts. Cautionary measures should always be taken like all other investment opportunities where investors need to carefully research all risks.
Oil and gas are now the world's foremost sources of energy ensuring the industries are a major force in the world's economy. A perfect example of these multi-purpose sources of energy is petroleum as it has many uses from providing lubrication to machinery, to being a component in the manufacturing of plastics.
Exploration opportunities involve companies leasing or buying land and prospect to make money through drilling. This is a risky investment as striking oil is not a guarantee. Income opportunities involve the acquisition of land or plots near proven energy reserves. Energy investments require certain services and support services, hence some opportunities come up such as transportation services; pipeline companies for the transportation of the drilled oil; other companies include the shipping and logistics companies manufacturers of equipment ;refiners; and rigging companies.
Historically the oil industry has played the role of a diversifier in the economy as when oil and gas prices rose, the economy would generally be slow. Investors in the energy industry are cautioned of this trend. Also, large profits are realized which can even amount to 10 times the initial capital invested. The sector also enjoys many tax advantages as most tax is invisible to a shareholder who buys shares from a public traded stock.
When oil or gas is not found during drilling, huge losses can be suffered by investors due to the volatility of these sectors. Shares in smaller companies are harder to liquidate and usually require direct contact with the company. The use of a broker can incur commissions of more than 20% of liquidation funds received.
Another risk includes people risk. The professional ability of the explorer cannot be underestimated as the experience of the operator plays a key role in profit realization. There are mechanical risks, as the actual oil and gas exploration involve a lot of activities hence all the mechanical questions must be answered prior to the actual drilling. The reserve risk takes into consideration the well control and the seismic evaluation of the well. Finally, the commodity price risk must be catered for.