It takes a lot of investment to start a company within the oil and gas industry, mainly because there are so many rules and regulations you have to satisfy before you’re allowed to do so. Still, there are hundreds of multi-million pound businesses in this arena, so it’s certainly not impossible. You’ll also have to think long and hard about where to place your firm. Will it be within the drilling sector? The transport sector? The production sector? That’s completely up to you. Even so, from my research it seems you’d do well to stay away from drilling, as there are just too few wells and too much competition. You also have to remember that western governments are tied in with a number of the most successful drilling companies, so the chances of a startup obtaining any contracts at all are very slim indeed.
With all this in mind, today I’m going to explain in layman’s terms how you should go about getting involved with this industry. There are obviously many concerns for new business owners in this field, most of which relate to the safety of their employees. While oil and gas can be transported and processed safely, there’s always a small chance that something could go wrong. Don’t get me wrong, I’m not trying to scare you with that comment, I just want to stress how vital it is that you employ health and safety professionals to constantly assess and then reassess your processes. Still, you’re a long way off being at that level yet, so get comfortable and give me your attention for a few minutes as I draw out a clear path for you to follow.
Deciding on the nature of your business
Before you can do anything else, you’ll need a strong and accurate business plan to attract investors, as the chances of you having enough cash lying around a pretty slim. Even so, you can’t do that until you know for certain what your company will do to make money. For the purpose of this article, let’s presume you’ve decided that transportation of oil and gas is where your profit lies. This means you’ll be trying to win contracts with drilling firms to move their product from the oil fields to the processing plants where it’s turned into petrol, diesel and other fuels.
So, you need to draw up that business plan now and start pitching to potential investors. Just remember that you’re going to have to remain rather ambitious, as an oil transport company with only two or three tank-lorries, will never make a penny. You need at least ten or twenty to make the endeavour worthwhile.
Pitching To Investors
There are many different routes you could take when trying to source investment, but you should never overlook high street banks. Sure, if you walk in there and ask them for £5 million, they’re probably laugh in your face and send you packing. However, if your business plan is irresistible, and you’re asking for less than a million, you might find they’re willing to entertain the idea. Just remember, this is a huge sum of money, and so you’re not going to get an answer overnight. In fact, you’ll probably have to return to the bank for lots of meetings over the course of a number of months to get a good result. Still, there are other solutions, the most lucrative of which I’ll explain now.
Savvy entrepreneurs with lots of cash on the hip like to invest in new companies. Many of them even set up their own private equity firms specifically for this reason. So, all you need to do is start making phone calls and knocking on doors to arrange meetings. Nine times out of ten, you’ll have to give away a much larger chunk of your business to obtain investment, but if you have no other choice….
Now you’ve got the money you need to get started, it’s time to work out exactly what equipment you’ll need to purchase. Running with the transportation idea, you’re going to require a number of different specialist trucks that carry suitably durable tanks. A lot of oil transportation companies go straight to the manufacturers for this and have them design custom vehicles to suit their needs. However, as you want to spend as little as possible, it might be sensible to look for a similar firm that’s about to go out of business, and see if you can buy theirs cheap. On top of this, you’re going to need to employ a company that specialises in providing engineer solutions and project management. After reading through some Ausenco reviews, which you choose to use should be obvious.
Alongside the trucks, you’ll need to get some equipment that allows you to store the oil and gas for short lengths of time. It won’t always be possible to transport it straight away due to time constraints and weather, so you need somewhere safe and secure to keep it hidden from contaminates and sparks.
Employing Staff and Obtaining Contracts
Lastly, you’ll need to find a number of dedicated staff members to ensure your firm stands the best chance of delivering the product intact, and on time. It’s best to employ two drivers for every truck you have (in case of long distances), and lots of ground workers to ensure your yard or business premises runs smoothly. Only then will you be ready to start winning contracts.
You’ll have to get in touch with all the main drilling companies directly, and while they might ignore you at first, success will come with persistence. So, keep knocking on doors and making telephone calls until you’re granted meetings. To make the opportunity seem a little more interesting to them, it would be good if you can undercut their current provider on price, but if that’s simply not possible, try to dig up some dirt about them and just explain why your company is a better choice.
So long as you follow this guide to the letter, you should be up and running within a couple of years. Of course, this is a very ambitious undertaking, so only the most dedicated and committed people will ever make a profit. That said; if you have the motivation, you could become a billionaire within ten years, and that’s being conservative.
See you back here next time!