Top oil and gas investors in the world.

Top oil and gas investors in the world.

Sep 15, 2020

Oil and gas investors are those ones who are under the telescope when it comes to the market
or the business field, due to the importance of the industry.

This industry is the new global industry that will conquer the whole world in the upcoming few years.

So before talking about the world top investors, let us shed some light on the investment itself
and how it goes in this field.

Investing in the oil and gas field, how it goes?

oil and gas

A few years ago and till now, the petroleum industry is having a sparkling leadership in the industrial market,
and there is not even one single sign that it will not lead the future as well.

Regardless of investing in the field itself whether in the exploration or the production, you as an investor
can use the” natural gas, cruel oil, diesel fuel, or the gasoline” because these themselves are being
used in too many aspects such as cooking energy, turning the fuel into electricity, or producing
the chemical fertilizers.

Types of investments

1- Exploration

Companies who play a part in this field tend to buy or rent lands in order to use it in drilling and
if they succeeded in striking the oil, the investor can gain 10 times over what they had paid, but
if it didn’t go well. they will lose everything, so investing in these companies is very risky.

2-Developing

Companies tend to drill near places with proven reserves.

3-Services and support

The companies that work in this sector offer so many supporting services in the oil ad gas industry.

Some of these services include” transportation, shipping and logistics companies,
pipeline companies, construction, and rigging companies, and etc.

How to invest?

You can invest in this field into many and several aspects and ways.

1-Small stocks and limited partnerships

If you are someone who wants to have a bigger and more effective role in a small company, you can think
about making a food chain in the oil and gas industry as a small stock or a limited partnership with someone and to be only restricted on oil and gas.

This kind of investment is more specialized, and if your business wouldn’t be traded you will need someone who is
expert in these kinds of services.

2-Futures Contracts

You can buy futures contracts to the oil and gas derivatives, this can be so risky because if these
contracts are expired then they will be totally worthless.

3-Mutual Funds

You can buy some shares in an oil and gas mutual funds, that will help you to get exposure to this
market without a direct risk when it comes to the spot prices and also without tying and risking too much
in only one company.

The advantages and disadvantages of oil and gas investments

The advantages

Tax Advantages

Oil and gas investment has got some tax advantages.

The IRS allows some companies to reduce the depletion, which is something very similar to the
depreciation thing when it comes to the real state.

If you buy a membership in a limited partnership, this will put you in a very important zone.

Diversification

Through history, Oil and gas investments have offered a very huge and successful” diversifier against the overall economy”.

While the prices of  gas go up, the economy tends to slow down a little bit which may cause
stumbling in the stocks and funds.

But on the other hands, when the prices of oil and gas together go up, the stocks tend
to rise with them as well.

An extra benefit to investing in oil and gas, it can help your portfolio against the sudden slowdowns
which may happen due to oil shocks.

Profit Potential

This is about investing in a small company.

Small company investors can gain more because the single well can generate more if the drillers produce
oil.

The disadvantages

Volatility

Investing in the oil and gas field can be very risky because of the sudden and wild changes that happen
to the prices.

It is also riskier for those who invest in small companies and who got their money in exploratory projects.

Commissions

This is for limited partnership investors who obviously will have to pay a commission to a broker.

These commissions are much more than any other broker’s commissions.

And as an investor, you must know that what you pay for a broker won’t get any work done for you.

Liquidity

It is easy to find investors for big companies and on the other hand, you will struggle to find
someone who buys shares in a small company.

In some cases and especially when it comes to limited partnerships, you will ask for a direct
redeem for your interest, so to avoid getting involved in this kind of cases you have to make sure that
you don’t get your money tied up.

Top oil and gas investors

ArcLightIt was established in 2001, it had nearly invested more than 22 billion dollars in 108 transactions since inception.

This company is based in Boston.

BlueRock Energy PartnersIt was founded more than 25 years ago with 150 transactions.

This company targets those producers who work in the low and middle oil markets seeking for
some developments plans

Denham Capital: It was established in 2004.

This company invests in 3 sectors which are” oil and gas, mining, and international power

Lime Rock ManagementIt was founded in 1998 and it is an investment partner in the private shares
which only focuses on the upstream in oil and gas.

PetroCap: It is a private investment company that was founded in 1992.

PetroCap focuses on investing as a partner in the upstream projects.

It also has a team of professional members in Geology, lands, and finance.

White Deer EnergyThis private company invests in energy and industrial services.

White Deer provides capital to those companies with strong management and the ability to grow.

It was founded in 2008 and since then it ”has raised capital in excess of $2.7 billion”.

Scout Energy Partners: This also a private investment company that focuses on the upstream in
oil and gas projects.

”Scout has completed over 50 acquisitions with over $1.5 billion in acquisition value since establishing its first institutional fund in 2011”.

The government’s funds to support oil and gas investors

The governments are really making efforts in order to support the whole
oil and gas industry and to encourage businessmen to invest in this field.

The government allows oil and gas companies to deduct taxes during the operation of the well’s development.

Then comes the direct spending, ”such as the $229 million Inland Waters Transport for Petroleum Subsidy. Usually, the federal government taxes shipping company using waterways a fee proportionate to the tonnage of what they ship. Not so with oil companies”.

Next, we have the royalty relief subsidies, its a measure where il and gas companies put some exemptions
with the help of some law-makers in order to pay less money on the extracted oil and gas.

The conclusion

The oil and gas market is becoming one of the biggest in the industrial field.

There are so many sectors in which a businessman can invest in this field and the most famous one
is the upstream sector.

There is more than one type of investment.

And just like any other business, the oil and gas industry has its own pros and cons.

Last but not least we can’t ignore the huge and effective role of the governments in order to develop and support
this industry.

FAQs

What are the types of investment in oil and gas?

Exploration, development, and service and support.

What are the advantages of investing in oil and gas?

Diversification and Profit Potential.

What are the disadvantages of investing in oil and gas?

Volatility, Commission, and Liquidity.

What are the top investors in oil and gas field?

ArcLigt, BlueRock Energy Partner, Denham Capital, Lime Rock Management, PetroCap, White Deer Energy, and Scout Energy Partners.

What are the government's funds?

The government allows oil and gas companies to deduct taxes, there is also the direct spending measure and the royalty relief subsidies.

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