Oil and Gas Company Startup – Sample Business Plan Template

Are you interested in starting an oil and gas company? Need a sample oil and gas business plan template?

Do you live in an oil-rich region like Nigeria, Angola, Kuwait, the United States, Saudi Arabia, Iraq, etc. And do you want to legally take advantage of the lucrative business opportunities in the oil and gas industry ? If you answered YES to any of the above questions, I advise you to read on with great interest.

The oil and gas industry is one of the most lucrative industries in any economy. In fact, it has created more billionaires in the world than any other industry. However, tapping into this money-spinning market requires huge up-front costs, which is why many entrepreneurs balk when they think of jumping in.

The process of starting an oil and gas company is more complicated than starting most other types of companies as the industry is strictly regulated locally and internationally. And getting the required startup financing could take time.

Oil and gas production is serious business, so you need to invest a lot of money, time and effort to be successful in the long run. This article explains some basics in the oil and gas industry, as well as the steps required to start an oil and gas company.

Over the years, the oil and gas business has undergone several changes, and now, it has become a very organized business. It comprises three sectors:

  • The rising sector
  • The intermediate sector
  • The descending sector

All sectors are highly lucrative and each has its own fair share of market players. Do you wonder what these sectors mean? Here is an explanation

  • The upstream sector involves prospecting and exploring for oil, drilling for oil, and getting it out of the ground. These activities are the early stages of oil production.
  • The intermediate sector involves transportation, storage and wholesaling of crude or refined petroleum products. The activities in this sector are aimed at moving crude oil from the site where it is taken to the refineries where it will be processed into the various petroleum products.
  • The downstream sector involves the storage of petroleum products and transportation, marketing and everything that happens until the products finally reach consumers.

Although several products are made from crude oil, only four of them are in high demand. These are:

  • Gasoline or gas ( also called gasoline or PMS – premium motor spirit )
  • Diesel ( also called AGOautomotive gas oil )
  • Kerosene ( also called paraffin or DPK – dual purpose kerosene )
  • Cooking gas ( also called LPG – liquefied petroleum gas ).

The demand for these four products is high because they are widely used for everyday activities such as transportation, home cooking, etc. With the above in mind, let’s now look at the steps required to start an oil and gas company.

How to Start an Oil and Gas Company – Sample Business Plan Template

1.Define your business model

You need to be clear from the start whether you are going to trade in the rising, middle, or falling sector. To make a well-informed decision, you may need to gather more information about the requirements, as well as the pros and cons of each, and determine which one seems best for you.

2. Market research

There is much more to learn and understand about the oil and gas industry than meets the eye. And since you plan to join this market as a new player, you need to do extensive research to understand the complexities of the market and the difficulties or challenges that new entrants may encounter.

Additionally, extensive market research will help you learn about required startup costs, required equipment, competition, strategies for success, and other relevant information about the business.

3. Write your business plan

Every business needs a business plan. In fact, oil and gas companies need it even more as it helps you plan the various phases of the business and increases your chances of success. Although developing your business plan does not guarantee the success of your business, not having one is the recipe for failure.

Your business plan includes your business goals and objectives, required startup costs, cost and operation plan, market and competition analysis, projected income for the first years, marketing strategy, single point of sale, exit strategy, and other vital information about your business.

Not only will your business plan guide you through the processes of starting and growing your business, but it will also come in handy when you need to obtain startup funds from investors, venture capitalists, and lenders.

4. Comply with the required documentation

Starting an oil and gas business requires registering the business and obtaining business licenses and permits. These vary by state and country, so you should contact the appropriate local agencies to find out what applies in your state or country. Other formalities include applying for a tax ID and obtaining insurance.

5. Find a good location

6. Purchase and install the necessary equipment

7. Hire employees

8. Market your oil and gas business

We do not go into detail about choosing a location, purchasing equipment, hiring employees and marketing your business because how you will implement each of these steps depends on the sector of the oil and gas industry in which has chosen to operate.

For example, the ideal location, required equipment, and appropriate employees for a business operating in the upstream industry will differ from a business operating in the downstream industry. However, this article is intended to be a short guide, not a complete resource on the subject.

To find out the ideal location and required equipment for a company in your chosen industry, you should definitely consult other resources or contact an expert with years of experience in that industry.

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