There are several significant dangers in the oil and gas industry. The danger of fluctuating commodity prices is the possibility that corporations that pay dividends may stop doing so.
And the possibility of an oil spill or other mishap during the production of oil or natural gas is three of these hazards.
Yet, long-term investments in oil and gas industries may also be extremely profitable. Investors should completely comprehend the dangers before making any investments in the sector.
Due to the tremendous volatility the oil and gas sector has seen over the past several years, energy investors are concerned if oil and natural gas businesses, even the most well-known ones, are sensible investments at the time.
In this article, let’s examine the oil and gas sector in further detail and discover more about the leading oil and gas stocks in India as well as the Indian oil and gas industry.
The Indian Oil & Gas Sector: A Synopsis
The Oil and Gas Industry, which has been highlighted as a significant indication, will predominantly fuel future GDP growth.
From an economic and financial perspective, investing in oil and natural gas is rewarding, with bright futures in India.
With the increasing need for crude oil in India and its widespread usage in both home and industrial operations, future significant investments in this industry seem clear.
The Indian government has revised the regulatory framework in the upstream sector (moving from NELP to HELP), which is also compatible with the government’s desire to make doing business in India simpler, in order to attract international investment.
Although the Indian government attempts to resolve teething issues, the oil and natural gas sector promises to have a dynamic environment with opportunities for corporate entity expansion.
Best Oil & Gas Stocks
|Sr. No.||Oil & Gas Development Company|
|2||Oil & Natural Gas Corporation|
|3||Hindustan Oil Exploration Company|
|4||Deep Energy Resources|
|6||Jindal Drilling & Industries|
|8||Selan Exploration Technology|
|9||Asian Energy Services|
|10||Bharat Petroleum Corporation|
Considerations Before Buying Gas & Oil Company Stocks
- The industry that is typically cyclical: Investors should expect booms and busts in the oil and gas sector.
- Fluctuations and Volatility: Oil and gas firms must deal with external factors. The value of Oil and Gas stocks is significantly influenced by the price of oil and gas. When prices are low, these equities usually suffer market punishment. For instance, when Saudi Arabia and Russia initiated an oil price war in March 2020, which lowered crude prices internationally, stock values in the oil and gas sector dropped.
- Unpredictability: Oil and gas exploration is uncertain. An organization buys access rights to an exploratory block and conducts tests to determine if the area has oil or gas resources. If they are found, the company drills test wells to evaluate the quality of the deposits and production wells before generating any money and linking the associated infrastructure. Exploration is by its very nature unpredictable, which may result in big losses from bad investments.
- Fossil fuel production, transportation, and burning generate greenhouse gases that contribute to climate change, raising environmental concerns. As a result, companies are under increased pressure from government agencies to cut back on their carbon emissions, and it is anticipated that over the next several decades, demand for petroleum and natural gas will fall.
Overview of the Top-Listed Oil & Gas Companies in India for 2023
Oil India Limited (OIL), a central public sector business, is owned by the Indian Ministry of Petroleum and Natural Gas.
The Ministry of Petroleum and Natural Gas, which has its main headquarters in Duliajan, Assam, is in charge of overseeing its activities.
The centralized public sector undertaking, which has offices in Noida, Uttar Pradesh, Guwahati, and Jodhpur, is a Navratna.
Oil India Ltd. provides various exploration and production (E&P)-related services. It owns a 26% ownership interest in Numaligarh Refinery Ltd.
Oil India Ltd. in addition to transporting crude oil, generating liquefied petroleum gas, running pipelines, and delivering these services, offers a number of services related to exploration and production.
The company website states that 66.13% of the total issued and paid-up capital is owned by the Government of India.
The general public, including individuals, businesses, banks, mutual funds, and residents, holds the remaining equity capital, or 33.87%.
OIL has more than 1 lakh sq. km. of PEL/ML areas for its E&P activities, most of which are in the Indian North East.
This explains the great bulk of its gas output as well as all of its crude oil production. 10% of the nation’s total gas output comes from Rajasthan.
Oil & Natural Gas Corporation
One of the leading oil and gas companies in India is Oil and Natural Gas Company Ltd, often known as ONGC Limited.
Energy exploration, production, repurposing, and development are among its operations. The Ministry of Petroleum and Natural Gas of the Government of India owns the primary public sector company, the Oil and Natural Gas Company (ONGC).
The corporate office is located in New Delhi. On August 14, 1956, the Indian government founded ONGC.
The Ministry of Petroleum and Natural Gas is responsible of overseeing activities for this significant government initiative.
It is the biggest government-owned oil and gas explorer and producer in the country and generates over 84% of India’s natural gas and roughly 70% of its crude oil, which satisfies roughly 57% of the country’s total demand.
Hindustan Oil Exploration Company
The Hindustan Oil Exploration Company Ltd engages in both oil exploration and production.
Nine oil and gas fields in India’s Cambay, Cauvery, Assam Arakan, and Rajasthan basins that are in various phases of exploration, development, and production are owned by the company and have a participation stake in them.
The second-largest government-owned downstream oil producer in India, Bharat Petroleum Corporation Limited (BPCL), is managed by the Ministry of Petroleum and Natural Gas.
It ranked at position 309 on the 2020 Fortune list of the biggest public sector companies in the world, and at position 792 on the 2021 Forbes “Global 2000” list.
Deep Energy Resources
Drilling, work-over, compression of air and gas, as well as oil and gas exploration and production, are among the business interests of the oil and gas firm, Deep Industries Ltd.
The company is a pioneer in the gas compression services area of the oil and gas industry’s service sector.
The firm also offers complete contract compression, which includes the provision of equipment as well as the installation, commissioning, and upkeep of a compressor package powered by a gas engine.
They have teamed up with renowned and skilled companies like Valerus Compression Services, Houston Texas, and Hanover Company USA for the delivery of gas compressor packages in India.
In the oil and gas sector, they also offer technical assistance for a range of services.
Reliance Industries Ltd is a global conglomerate corporation in India with its headquarters in Mumbai.
Among the numerous industries, it works in our energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles.
Reliance, one of India’s most lucrative companies, is also the nation’s largest publicly listed company in terms of both market capitalization and revenue.
It is also among the biggest employers in India, with more than 236,000 employees globally.
In the Fortune Global 500 list as of 2022, the company is ranked as the 100th largest corporation in the world.
Reliance is India’s leading exporter, accounting for 7% of total exports of goods from the country and having access to markets in more than 100 countries.
Reliance contributes close to 5% of all customs and excise tax income collected by the Indian government. It is also the biggest taxpayer of income from the private sector in India.
Jindal Drilling & Industries
One of the leading Indian private sector firms in this area is Jindal Drilling & Industries Ltd (JDIL), a part of the D.P.
Jindal Group that specialised in offshore drilling and has been in business since 1989. JDIL’s strengths lie in its about thirty years of operating expertise, supported by qualified personnel and crew.
Due to their vast knowledge, flawless service standards, and competence in every facet of the oil and gas industry, they are happy to claim that JDIL’s personnel is its biggest investment.
The firm has consistently won honors, including the outstanding worldwide safety award for “No Lost Time Accident” from the “International Association of Drilling Contractors, Houston (USA)” for Safety Excellence, which in their opinion attests to its superior performance.
This award was granted in appreciation for the business’ stringent safety policies in this hi-tech sector. JDIL set an Indian record by going two years without a lost-time accident.
The International Award for the “Best Trade Name 1996” was granted to the company by Trade Leaders Club-Madrid, SPAIN, in recognition of its entire business strategy.
To import liquefied natural gas (LNG) and set up LNG terminals throughout the country, the Indian government founded the oil and gas business Petronet LNG Ltd.
Partners in the joint venture include the Oil and Natural Gas Corporation Limited (ONGC), the Gas Authority of India Ltd (GAIL), the Indian Oil Corporation Limited (IOC), and the Bharat Petroleum Corporation Limited (BPCL).
The first LNG receiving and regasification facility in India was constructed by Petronet LNG Company in Dahej, Gujarat, along with another terminal in Kochi, Kerala.
In order to import LNG and construct LNG terminals, the Indian government formed a joint venture with the main oil and natural gas producers in the nation.
Its promoters include Bharat Petroleum Company Ltd, Indian Oil Corporation Limited, GAIL (India) Limited, and Oil & Natural Gas Corporation Limited (ONGC) (BPCL). 3,000 crores, or around $420 million, is the allowed capital.
Selan Exploration Technology
Selan Exploration Technology Limited carries out oil and gas production and exploration in India. The Bakrol, Lohar, and Karjisan oil and gas reserves in Gujarat are among the oil fields that the business is permitted to develop.
Selan Exploration Technology Ltd has its main office in Gurugram, India. Selan Exploration Technologies Ltd., a small-cap company with a market valuation of Rs. 431.68 billion, was established in 1985 and works in the gas and petroleum sector.
Selan Exploration Technology Ltd. is a private market-listed oil exploration and production business. Meanwhile, two more Production Sharing Contracts for recently found oil fields in Gujarat have been agreed upon by the company and the GOI.
The company’s primary pursuits include the exploration of oil, gas, and hydrocarbons.
Asian Energy Services
Asian Oil Field Services Ltd (AOSL) provides exploration services to Indian oil and gas exploration firms.
Since its foundation, the business has participated in several projects involving seismic data collecting, seismic job services, shot hole drilling, up hole drilling, and workover.
Also, it has offered work-over services to various Indian national and private businesses. The firm offers a variety of services, including shot hole drilling, seismic data processing, seismic job services (field operations, maintenance), and seismic data acquisition.
Bharat Petroleum Corporation
The central public sector company known as Bharat Petroleum Corporation Limited is owned by the Ministry of Petroleum and Natural Gas of the Government of India (BPCL).
It operates refineries in Cochin, Bina, and Mumbai. The second-largest government-owned downstream oil producer in India, BPCL, is under the control of the Ministry of Petroleum and Natural Gas.
In the 2020 Fortune list of the largest public sector enterprises in the world, it ranked at position 309, while on the 2021 Forbes “Global 2000” list, it ranked at position 792.
The Company is a player in the Indian petroleum industry. The Company sells petroleum products and refines crude oil as part of its operations.
In conclusion, investing in Oil and Natural Gas stocks in India will allow you to get successful results in the near future because sustainable Energy Stocks have been increasing for decades.
Because the equities in the oil industry are so volatile, one should think about risk tolerance before really investing in petroleum shares.
Be careful to take your investment objectives, risk tolerance, and time horizon into account before buying any stocks or investing in Natural Gas and Oil Company Stocks.
Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.
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