Assets and Plans

OIL AND GAS

<p>THE REASON THERE IS SUCH A HIGH RISK WITH INVESTING IN OIL AND GAS INDUSTRY IS THAT IT IS TEEMING WITH AN ARRAY OF OPPORTUNITIES AND THESE OPPORTUNITIES PAY REALLY WELL</p><p>Our research team carried out some investigation and reviewed the risks that come with exploring the lucrative industry that is Oil and Gas.</p><p><br></p><p>From the risks of oil spillages, price volatility as a result of environmental factors, litigation from possible incidents, high taxes and so on, any investor will naturally take a step back to review the fine lines before investing in this industry in whatever way.</p><p><br></p><p>However, the reason there is such a high risk with investing in this industry is that it is teeming with an array of opportunities and these opportunities pay really well. The following are some of the benefits that could make you consider the risks that come with it:</p><p><br></p><p>Huge Profit Potential</p><p><br></p><p>This is really the most important reason investors opt for Oil and Gas stocks or other forms of investments in the industry. They have huge profit potential!</p><p><br></p><p>Just one oil well can keep a business in the books for years upon years and it can generate income and dividends for stakeholders and investors respectively. Profit margins basically skyrocket when an abundant oil reserve is found and its limits could stretch very far.</p><p><br></p><p>Return of investment can be as much as ten times higher than money invested. As such, if you invest in a small Oil and Gas company and it discovers an Oil well, the value addition can be astounding. For the long term investor, investments can also provide decades of passive income together with a potential for strong ROI.</p><p><br></p><p>Increasing Demand</p><p><br></p><p>Unlike certain industries that are seasonal or inconsistent with demand, this industry is almost always in high demand and the only thing that can reduce its potential gains or value is when there is an increase in supply to meet those demands thus bringing the price down.</p><p><br></p><p>With no viable substitute in sight yet, the demand for oil is expected to increase some more over the next few years.</p><p><br></p><p>Diversification</p><p><br></p><p>Another benefit of investing in this industry is that it is indirectly proportional to the entire economy. The economy might crash when prices of oil and gas go up, as the cost of living and inflation rises. In fact, the dependence on the nation in this industry means that when things go bad, it pulls down a lot of aspects with it. The difference, however, is that if you have invested in this industry, you are on the winning side of the economy.</p><p><br></p><p>As such, if economic downtimes crash your investment portfolio, your investment in this industry will serve as a hedge and mitigate your losses.</p><p><br></p><p>Governmental Backing</p><p><br></p><p>An understanding that one of the core areas the economy/government makes most of its money from is this industry, should put your mind at a little bit of ease. There are a number of incentives and tax advantages available to encourage those who invest in the sector.</p><p><br></p><p>Many of them are provided by the government of the nation so as to boost the economy. Also, where more traditional investments are not available within the sector, the government will put structures in place to encourage private investors.</p><p><br></p><p>If this already sounds interesting, then you might be wondering about the different ways you can invest in the industry</p><p><br></p><p><br></p>