Jean Paul Getty, a renowned English American industrialist said: “Formula for success: rise early, work hard, strike oil.” This was after his investments in Saudi Arabian oil wells paid off. He moved up to playing in the big leagues and becoming one of the richest of his time. Since then, a lot of individuals have adopted this mantra and experienced wealth just like J, Paul Getty.
It is actually a fact that there’s a lot of money to be made in the oil sector. Take a visit to Ikoyi, Lagos, and other lush vicinities on the Island, you will see the evidence of what Nigerians term as “oil money”. In a country of more than 186 million people, there exists a lot of gaps; which are actually opportunities for one to take advantage of.
So here, we have highlighted 10 ways to invest and make money in the oil & gas sector. While some may be capital intensive, it is advisable to do a research before venturing into any of them:
1) Oil Mining: Oil mining is the process of extracting crude oil from the earth. This process is capital extensive and requires a lot of technology. However, if you’re able to identify an area with a large deposit of oil, you are in luck!
2) Oil refinery: It’s sad that Nigeria still exports her crude oil abroad to be refined and sent back to Nigeria. This value chain is so significant because it impacts the prices of petroleum products significantly. Often times, the returned products can be adulterated too. Here is a big minefield that can generate lots of income.
3) Haulage & Storage: This aspect is very viable. Transporting petroleum products in a safe and convenient manner is a tough nut to crack in Nigeria. There have been several issues of mishaps leading to the loss of lives and properties. Coming up with a good system to checkmate this will lead to major income. Also, there are inadequate tank farms in Nigeria. A lot of times, tankers have to move directly to loading platforms at the port to receive petroleum products. Having a tank farm at key locations is pertinent in Nigeria.
4) Oil servicing companies: Oil servicing companies undertake duties outsourced by oil companies. This can include consultancy, catering, healthcare etc. Having an oil servicing firm requires knowledge of the intricacies in the day to day affairs of oil firms and creating solutions for them.
5) Retail and supply: This is the major avenue for most people in the oil sector. It requires little technical experience but also comes with major ROI. You can buy at a cheaper price and resell to willing customers at a higher price. Having a chain of filling stations also helps to bring more money.
6) Diesel supply: Most diesel generators are bulky and cannot be transported to filling stations to be refueled. This is an avenue to cash in. Customers include banks, hospitals, malls, educational institutions and even private residence. As long as you get your marketing strategies right, you are sure to have a good bank account from it.
7) Petroleum by-products: A lot of people are unaware that crude oil is more than just PMS, gas and kerosene. There exist lots of products like aviation fuel, coal tar, asphalt etc. Getting involved in the value chain of any products comes with its own advantages too.
8) Cooking and welding gas: In developed countries, gas is supplied to residential areas, In Nigeria, consumers have to either buy at filling stations or gas plants. You can start by supplying gas in small cylinders and work your way to selling in commercial quantities. Also, welders require acetylene gas to work. You can target this market too.
9) Construction of petroleum facilities: From filling stations, gas tanks, oil tankers etc, the fabrication of these resources is intensive but comes with its tons of cash flow. Every day, there is an expansion of oil resources and different facilities are required to cater to them.
10) Safety and security companies: The oil sector is a very volatile one and requires 24/7 monitoring to avoid accidents. Training staffs, purchasing and maintaining safety equipment requires a lot of efforts and time on the part of the oil firms. Due to the sensitivity of the oil sector, it is also important to have security personnel to safeguard oil workers and facilities.