Welcome to 9jasalary News & Business Blog: You Too Can Join In The Lucrative Oil & Gas Business With N50,000 - N100,000

You Too Can Join In The Lucrative Oil & Gas Business With N50,000 - N100,000

Oil and Gas business is highly lucrative and will
continue to be so as long as the need for the
products of the industry continues to be on the
high side.
This week, SuccessDigest spoke with an expert
in the industry, Engineer Chikezie Ignatus,
Director, Ciwell Petroleum and Chemicals Ltd
and he revealed all you need to know about the
industry, including how to participate in it with
little startup capital as low as N50,000 to

What Does Oil And Gas Business Entail?
It means all activities that involve the products
that have to do with petroleum or hydrocarbon,
ranging from the products gotten from the
refineries or from the crude oil itself, to the
retailing of the refined products. So, it is all the
activities involved, even from the exploration and
production department down to the retailing of
the petroleum products.
Different Products That Comprise Oil And Gas
Like I said earlier, this has to do with crude oil
and all the products gotten from the refineries.
That is to say it includes crude oil itself and all
derivatives of crude oil. Now, listing them, we
have crude oil which is the principal product in
oil and gas, we have the oil and gas distillates –
that is the products gotten from oil and gas
including the refinery gas, referred to as liquefied
petroleum gas. We have the gasoline, which is
the petrol, then we have the naphtha, which is
the solvent spirit. We have kerosene, diesel, gas
oil, lubricating oils or base oil. We have heavy
distillates like bitumen or wax and we also have
other gas products which is referred to as petrol
chemicals. These petrol chemicals are actually
products gotten from further cracking of
petroleum products which includes butane,
ethane and the rest.
Where To Get The Different Products
The crude oil, which is the first product from the
exploration and production of oil and gas comes
out with a natural gas, so both the crude oil and
the natural gas are moved to the terminals.
Firstly, the natural gas is separated from the
crude oil and moved to the terminal where they
are stored.
Meanwhile, there are different operators of the
terminals, which tell us that the primary source
of crude oil is from the operators of the
terminals – they are the ones in charge of the
crude oil. For the petrol refined products, like the
natural gas, that can be gotten from the gas
The gasoline, which is petrol, naphtha, kerosene
(DPK), diesel (AGO) – all can be gotten from the
major players or marketers in the oil and gas
industry, like Conoil, Oando, among others. You
can also source the products from other
For the Lubricating oil, which is part of the oil
and gas refined products, their sources includes
the major marketers. However, most of the
major marketers are blenders, as they use the
lubricating oil or base oil for blending their
lubricants. They also market some of the
lubricants to other blenders.
You can also source indirectly, because you
might have direct access to these products with
the major players – there are lots of brokers on
ground you can source from, depending on where
you find yourself in the industry.
For bitumen, which are heavy distillates like
petroleum jelly and wax. Their sources are
majorly the chemical importers – they bring in
petroleum jelly and wax which find their
application in the cosmetics industries. Another
type is bitumen which has similar features with
coal tar. Bitumen is actually gotten from the
distillation of crude oil, while coal tar is gotten
from the distillation of coal.
Now, you can get your bitumen directly from the
major dealer of bitumen in Nigeria. You can also
source indirectly from brokers of bitumen.
Start Up Capital
Like you know, oil and gas business is a capital
intensive one, so to say – so it is something
that could be scaring to potential dealers who
intend to get into industry. If they want to get
into the industry as a primary players, that will
be almost impossible because of the cash or
capital constraint. But there are a lot of
openings for brokers. So, I will be talking about
the startup capital for brokers.
This is because if you talking about the startup
capital for major dealers, they should be having
their own tank plant and get approval from the
DPR and PPMC – it is a long process and very
rigorous. But for the middlemen, there are lots of
opportunities for them and the capital
requirement is almost negligible.
What you need do is to have good information
on the business and have your communication
gadgets available, because it is all about
communication, as you can always play in
between the major players and the market.
So, theirs is not a huge funding, as with N50,000
to N100,000 they can start. If you know the
sources, market and you have your laptop and
other communication gadgets like telephone
lines, you can begin to communicate with or
correspond to the major players that you want to
bring a customer and they will pay certain
amount of money depending on agreement o
what we call agency fee.
That is to say, when you bring a customer and
link him up with them, you have your pay. Well,
this fund you make per unit or liter is very
minimal, but when you look into the volume
involved, you will discover it is a lot of money.
So, the startup capital of the oil and gas
business as far as you wants to play as a broker
or middleman is very minimal.
Potential/Possibility Of Making Profit
Well, you can see that as a broker, you are not
putting in much and that is why you a great
opportunity, because when you are negotiating,
with the major player, you will be give some
incentives – like N2 per liter to sell to the
That is to say that at the end of the transaction,
even if you are at the major player’s price, you
are making N2 already and if you are able to
negotiate N1 with the major dealer, that means
you are making N1 plus the N2 the major player
is giving to you for each transaction or per liter.
You can see that this is a lot of possibilities for
you to make profit, because what you putting as
capital is very minimal and you are coming out
with N3 on the products and you know you are
running this products, as a broker, on every
33,000 liters (a truck). That is to say on every
33,000 liters truck, if you are making N3 on your
negotiation, you are making N3 multiply by
33,000, which is N99,000. You can still negotiate
Where Can The Products Be Sold To Determine
Yes, these products have their different markets
starting from crude oil – the crude oil is actually
sold internationally, so your major market is
coming from overseas. But other refined
products, have their different market as well.
Like LPG, liquefied petroleum gas, for instance,
their major market is the operators of mini
plants – I mean if you are a broker, bringing
from major to sell to mini plants or the retailers.
Now, for AGO, which is Automotive Gas Oil, we
have dual customers there because you can see
that every industry use diesel to power their
plants, especially these days that there is little
or no power supply.
That is to say that every industry is your market
for AGO. Now, depending on the size of the
market you want to look at – you have the
bigger industry that buy large volume and the
smaller industry that buy lesser volume. For DPK,
which is usually used domestically, you find here
that every filling station is your marketer and
every retailer.
Also, all the retailers of AGO, like the filling
stations as well are your customer, apart from
the industry. Now, as regards base oil, this is
lubricating oil and actually a core raw material
for blending lubricant, all the blenders of engine
oil are customers for your base oil.
Don’t be confused here, engine oil package is
lubricating oil and base oil is also lubricating oil,
but the difference is that the lubricating oil from
the refineries, which is generally referred as base
oil is a core raw material for your finished engine
oil package which you buy for servicing your
So, that is to that every blender or manufacturer
of engine oil is your customer for your base oil
– you are picking your base oil from major
importers and you are supplying to the
manufacturers of engine oil.
For your petroleum jelly and paraffin wax, which
are heavier distillates from crude oil or legal
refined product of crude oil, they find their
applications mainly in cosmetics industries. For
instance, your Vaseline, which is a commonest
cream, is a core product in petroleum jelly and it
is being comprised of over 80 percent petroleum
jelly – every manufacturer of Vaseline is you
customer for petroleum jelly, and I think about 5
to 10 percent of every Vaseline contain of
paraffin wax. So, that is also to say that every
manufacturer of Vaseline is your customer for
paraffin wax. In a nut shell, both your petroleum
jelly and paraffin wax have their customers as
the cosmetics industry.
Risks/Challenges Involved In Oil And Gas
Industry/Guiding Against Them
Like it has been noticed, oil and gas is a highly
flammable product. So, the number one risk you
must look into is the flammability nature of the
product. You must make sure that while handling
the product, you must to keep away everything
that can easily ignite fire. This is because if it
catches fire anywhere, either in transit or at the
depot, you discover that it is always very
As brokers, we as well know that due to the
transit nature and safety measure of the
products, if you are delivering a product and you
don’t have a good guidance, there are some
touts in the industry, if they are the one handling
the delivery, can make away with the product,
which can lead to your shortage.
Again, where you are loading and discharging the
product, you must look at accuracy, as in quality
and quantity of the product. When you are also
handling the product, each point in time you
must make sure that the quality of the product
you are handling meet the specification.
How Can One Stay Put In The Business As
Competition Is Keen?
Just like in any other business, there is
competition. Now, for you to sustain your oil and
gas business, it means you must always be on
ground and try to stay on the top in terms of
sourcing your product – try to make sure you
source your product from the cheapest sources.
Make sure your source is competitive enough, in
terms of getting it at the lowest possible price at
each point in time.
You know that your customers also want to buy
at low prices as possible at each point in time.
You must have to look into these two extremes
at each point in time, so that at any time you
are getting a proposal at the lowest possible
cost and also trying to supply to your
customers, it will work.
So, at the time you are getting from the lowest
possible price and supplying your customers at
the lowest possible cost, it sustain the business
for you for a very long time and it give you an
edge over others.
My advice like in the beginning of this piece,
when I said oil and gas business is a capital
intensive one, which can scare people away, but
the fact is that I will advice that anyone who is
interested in the business should not be scared
by the capital intensive nature of it. As I have
said earlier, people can come with little fund and
make a lot of profit in it.
Very importantly, they also have to go through
training or work with industries in the oil and gas
sector before they will be able to really do the
business. This is because, the business is about
information and they must be thoroughly
informed, which you can only get in the course
of training from those who are already in the
industry, the expatriates or the oil and gas

No comments:

Post a Comment

Featured post

Best Ebooks that teach how to make money online and offline in Nigeria

  In credible Special Offer. OUTSTANDING INFORMATION Mini-Importation Business The Only  Genuine  Business On The Interne...