If you are exploring how to get into the oil business, now is a smart time to act. Despite the rise of renewables, oil remains a key driver of the global economy, with daily demand still exceeding 100 million barrels, according to the International Energy Agency.
The industry spans three main segments: upstream (exploration), midstream (transportation), and downstream (refining and retail). Each offers unique entry points depending on your capital, expertise, and goals.
This guide breaks down the essential steps, startup costs, regulatory paths, ways to enter without prior experience, and investment strategies.
See also: Proven steps to start a successful business.
Key Takeaway
- Getting into the oil business starts with choosing the right sector—upstream, midstream, or downstream based on your capital, skills, and risk appetite.
- You can launch with or without experience by starting a service business, pursuing oil industry jobs, or investing passively through royalty trusts or oil ETFs.
- A solid business plan, clear licensing strategy, and strong compliance framework are essential for building a sustainable oil business.
- To grow and scale, focus on operational efficiency, strategic marketing, and seek expert support through tools like the Entrepreneurs Success Blueprint.
Understanding the Oil Business Sectors
Before you can start or invest in the oil business, it is essential to understand how the industry is structured. The sector is broadly divided into three main areas: upstream, midstream, and downstream.
Each segment has its own business models, capital requirements, regulatory burdens, and potential risks. Choosing the right one depends on your resources, experience, and long-term objectives.
Upstream: Exploration and Production
This is the part of the oil business that deals with searching for crude oil and natural gas reserves, drilling wells, and extracting hydrocarbons.
It requires heavy capital, technical expertise, and often, partnerships with geologists, engineers, or established players. While it is high risk, it offers high returns when managed properly.
Many enter this sector by investing in non-operating interests, leasing mineral rights, or forming joint ventures.
Midstream: Transportation and Storage
Midstream activities include transporting crude oil or gas from production sites to refineries or export terminals and storing it along the way.
Entrepreneurs in this space operate pipelines, tankers, storage facilities, or trucking logistics. Compared to upstream, midstream is more predictable and less exposed to oil price volatility.
It is suitable for those with operational or infrastructure experience.
Downstream: Refining, Retail and Distribution
Downstream covers the processing of crude oil into usable products like petrol, diesel, and lubricants. It also includes the sale and distribution of these products to wholesalers, retailers, or directly to consumers.
Opportunities here include launching a fuel retail station, becoming a bulk product distributor, or developing a private-label lubricants brand.
It is a preferred entry point for entrepreneurs with limited capital who want to tap into a high-demand consumer market.
Comparison of Oil Business Sectors
| Sector | Activities | Capital Required | Common Entry Points | Risk Level | Profit Potential |
|---|---|---|---|---|---|
| Upstream | Exploration, drilling, production | Very high | Mineral rights leasing, joint ventures, investing in non-operating interests | High (regulatory, technical, financial) | Very high |
| Midstream | Transportation, storage, pipelines, terminals | Moderate to high | Starting oil transport services, storage leasing, logistics contracts | Medium (infrastructure, compliance) | Medium to high |
| Downstream | Refining, retail, fuel distribution, lubricants | Low to high | Retail outlets, distribution businesses, private-label products | Medium | Medium |
How to Get Into the Oil Business- Step-by-Step Guide
Getting into the oil business requires a clear understanding of the steps involved in setting up, funding, and launching operations.
Whether you are aiming for a hands-on business model or an investment-focused approach, this guide outlines what you need to do to get started effectively.
Step 1: Conduct Market Research
Before investing a dollar, understand the demand, competition, and pricing trends in the oil market. Use data from the International Energy Agency, U.S. Energy Information Administration, and your local energy board to assess viable entry points.
Identify which sector—upstream, midstream, or downstream is underserved or has gaps you can fill. Focus your research on:
- Consumer and industrial demand
- Geographic market saturation
- Competitor pricing and services
- Legal and regulatory constraints
- Entry barriers for small players
Understanding these dynamics helps you select the best path, whether it is an oil trading business, retail distribution, or storage service.
Step 2: Choose a Business Model
Your oil business model should match your budget, expertise, and risk tolerance. Here are popular models and what they require:
| Business Model | Description | Capital Level | Suitable For |
|---|---|---|---|
| Oil trading business | Buying and reselling refined products | Low to moderate | First-time entrepreneurs |
| Non-operating interest investments | Investing in oil wells without managing operations | High | Investors |
| Fuel retail outlet | Setting up a small fuel station | Moderate | Local business owners |
| Lubricants and fuel distribution | Bulk purchasing and supply of refined oil products | Moderate | Mid-level entrepreneurs |
| Oilfield services | Providing equipment, labour, or maintenance services | Moderate | Technical and logistics operators |
Step 3: Develop a Business Plan
A solid business plan not only helps clarify your strategy but is also necessary if you need funding. Your plan should include:
- Executive summary
- Market analysis
- Business structure
- Financial projections
- Operational strategy
- Risk assessment
You can save time and reduce errors by using a professionally designed template. Entrepreneurs.ng offers a comprehensive business plan template tailored to entrepreneurs in oil and gas. You can access it here: Comprehensive Business Plan Template.
Step 4: Calculate Startup Capital
Capital needs vary widely based on your chosen model. Drilling projects may require millions, while starting a fuel retail outlet could require less than $150,000 depending on location and scope.
| Business Type | Estimated Capital Required |
|---|---|
| Upstream (drilling investment) | $1 million to $25 million |
| Midstream (transport services) | $100,000 to $500,000 |
| Downstream (retail fuel outlet) | $75,000 to $150,000 |
| Oil trading business | $50,000 to $200,000 |
| Lubricants distribution | $30,000 to $100,000 |
Be sure to include costs for licensing, insurance, staffing, infrastructure, marketing, and contingencies.
Step 5: Explore Funding Options
If personal capital is not enough, consider these funding channels:
- Angel investors or venture capital: Useful for upstream and midstream projects
- Bank loans and credit facilities: Ideal for downstream and logistics businesses
- Partnerships and joint ventures: Common in non-operating interests and drilling
- Crowdfunding and cooperative funding: Emerging options for retail or service models
Step 6: Set Up Your Legal Structure and Get Licensed
Register your business with the appropriate government agency. Choose a structure—sole proprietorship, LLC, or corporation based on your tax strategy and scale.
Then obtain necessary permits and licenses, which may include:
- Operating permits
- Fuel storage licenses
- Environmental compliance approvals
- Insurance certificates
Ensure you comply with safety and environmental standards specific to your jurisdiction. Non-compliance can lead to heavy penalties or shutdowns.
Step 7: Build a Team and Operations System
Depending on the business type, you may need:
- Engineers, geologists, and drill operators (for upstream)
- Truck drivers and logistics coordinators (midstream)
- Sales and operations managers (downstream)
You can use our Ask an Expert service if you need help setting up your operational structure, hiring strategy, or vendor partnerships.
Build your system to scale, including inventory tracking, safety compliance, and customer service protocols.
See also: How to Start a Permanent Jewelry Business: Complete Guide to Profit & Growth
How to Get into the Oil Business with No Experience
Many people believe that entering the oil and gas industry requires years of technical training or massive capital. In reality, there are several accessible ways to break into the sector even if you have no background in it.
Whether you are interested in starting small, learning on the job, or building a service-based business, there are realistic entry paths.
Start with Entry-Level Jobs in the Oil and Gas Industry
One of the most practical ways to enter the industry is by gaining hands-on experience. Oil business jobs are available across drilling sites, transportation hubs, refineries, and administrative offices.
Popular entry-level roles include:
| Job Title | Average Annual Pay (USD) | Qualifications Needed |
|---|---|---|
| Roustabout | $40,000 – $50,000 | Basic safety training (e.g., HAZWOPER) |
| Floorhand | $50,000 – $60,000 | Physical fitness, on-site training |
| Tanker Driver | $60,000 – $75,000 | CDL License, experience preferred |
| Oilfield Technician | $55,000 – $70,000 | Vocational training, safety certs |
| Dispatcher/Coordinator | $40,000 – $55,000 | Basic logistics experience |
These roles allow you to understand the industry from the inside, build a network, and potentially move into management or business ownership over time.
Offer Service-Based Businesses That Support the Industry
If you have a business background or trade skills, you can start a company that provides essential services to oil and gas operators. These require less technical oil knowledge and are often outsourced.
Examples of service-based oil businesses include:
- Equipment rental and maintenance
- Mobile tank cleaning and safety inspection
- Oil spill response and environmental clean-up
- Catering and accommodation for rig workers
- Transportation and logistics coordination
Many of these services are in constant demand, especially in active drilling regions.
Invest in the Industry Without Operating a Business
For those without experience but with available capital, investing in the oil business is another viable route. You do not have to run a company to benefit financially from the sector.
Investment options include:
| Investment Type | Description | Risk Level | Entry Capital Range |
|---|---|---|---|
| Royalty Trusts | Earn a percentage from oil sales without operations | Low to medium | $1,000 – $10,000 |
| Non-operating interests | Fund drilling in exchange for a cut of profits | Medium to high | $25,000 and above |
| Oil ETFs or mutual funds | Trade oil-related securities through financial markets | Low | From $100 |
| Small-cap oil stocks | Invest in public oil companies with growth potential | Medium | From $500 |
This is ideal if you prefer passive income streams or are exploring the sector before committing fully.
Get Training and Certifications
Even without a degree, you can quickly become employable in the oil sector by earning short-term, practical certifications.
Common programs include:
- HAZWOPER (Hazardous Waste Operations and Emergency Response)
- TWIC (Transportation Worker Identification Credential)
- Basic Offshore Safety Induction and Emergency Training (BOSIET)
- CDL (Commercial Driver’s License for tanker operators)
These courses typically take a few days to a few weeks and can be found at vocational schools or online training platforms.
How to Invest in the Oil Business Without Owning a Company
You do not need to drill wells or run operations to benefit from the oil industry. Strategic investing allows you to earn from the sector’s performance without taking on the complexities of managing a business.
This is especially appealing if you want a hands-off income stream or are still learning how to get into the oil business.
Royalty Trusts and Mineral Rights
Royalty trusts allow investors to earn a percentage of revenue generated from oil wells without being involved in the operations.
You can buy shares in a trust listed on a stock exchange, and you receive regular income based on the production and sale of oil.
Investing in mineral rights—buying the rights to oil-rich land is another option. When oil companies lease and drill on your land, you earn royalties.
| Investment Type | How It Works | Potential Return | Risk Level | Minimum Investment |
|---|---|---|---|---|
| Royalty Trusts | Buy shares in a trust that pays oil royalties | 5% to 12% yield | Low | $1,000 – $5,000 |
| Mineral Rights | Purchase land with underground oil resources | Variable | Medium | $10,000 and above |
Oil and Gas Mutual Funds or ETFs
Exchange-Traded Funds (ETFs) or mutual funds focused on energy companies are another passive way to invest in the oil business.
These funds pool money from investors and invest in various oil stocks, pipelines, refineries, or service companies.
Examples include the Energy Select Sector SPDR Fund (XLE) or Vanguard Energy ETF (VDE).
- Pros: Low entry capital, easy to diversify, liquid
- Cons: Lower direct returns than owning interests
- Ideal for: Beginners and investors seeking long-term growth
Non-Operating Interests in Oil Projects
Non-operating interests involve putting up capital in oil drilling projects while another party handles the operations. As a non-operating partner, you share in the profits without being responsible for the daily work or compliance.
This model is widely used in upstream ventures and often structured through joint venture agreements.
| Model Type | Responsibility | Return Potential | Control | Investment Range |
|---|---|---|---|---|
| Non-operating interest | Financial only | High | Low | $25,000 to $500,000+ |
It is essential to conduct due diligence and review financials, operator experience, and legal terms before committing.
Consider Oil-Focused Real Estate
Some investors profit by leasing storage yards, tanker truck parking, or land near oil facilities. These properties are often in demand and provide regular rental income.
- Entry Capital: $50,000 and above
- Risk Level: Medium (location dependent)
- Income: Stable rent, long-term contracts
Risk Management and Industry Challenges in the Oil Business
Understanding how to get into the oil business is only half the equation. To succeed, you need to manage the risks that come with operating or investing in this volatile industry.
Oil markets are influenced by global politics, environmental factors, regulation, and shifting consumer behaviour. The key to sustainability is preparation and proactive risk planning.
Commodity Price Volatility
Oil prices are highly sensitive to global events. Geopolitical tensions, natural disasters, OPEC decisions, and economic slowdowns can impact demand and supply.
A sudden drop in oil prices can erode profit margins and lead to financial loss, especially for upstream players. Downstream and midstream sectors are generally less affected but can still experience reduced throughput or demand.
How to manage it:
- Build flexible pricing models into your contracts
- Use hedging tools or futures contracts if you operate at scale
- Diversify income through service offerings or alternate markets
Regulatory and Environmental Compliance
The oil business is heavily regulated due to its impact on the environment. Failing to comply with local and international environmental laws can result in fines, suspension of licenses, or permanent shutdowns.
Examples of regulatory bodies and regulations include:
| Regulation Area | Description | Penalty for Non-Compliance |
|---|---|---|
| Environmental Safety | Waste disposal, emissions control, water use | Fines up to $100,000 or more |
| Labour Regulations | Worker safety standards (e.g., OSHA compliance) | Site shutdown, legal action |
| Licensing | Required permits for operations or distribution | Revocation of licenses, suspension |
How to manage it:
- Work with compliance consultants or legal experts
- Join local industry associations for updates and resources
Operational Risks and Technical Failures
Drilling equipment breakdowns, transportation accidents, or pipeline leaks can lead to financial losses, environmental damage, or legal issues.
How to manage it:
- Invest in regular maintenance and safety training
- Insure your assets comprehensively
- Maintain emergency response protocols and backup equipment
Legal and Contractual Risks
In partnerships, royalty agreements, or joint ventures, disputes can arise over payments, responsibilities, or outcomes. Poorly drafted contracts can expose you to liability or loss.
How to manage it:
- Engage experienced legal counsel before signing any deal
- Use clear service-level agreements with partners and suppliers
- Document all negotiations and amendments
Public Image and Community Relations
The oil industry faces growing public scrutiny. Poor public relations or community backlash can lead to business disruptions or protest-led shutdowns.
How to manage it:
- Invest in transparent communication with stakeholders
- Support local initiatives and employment
- Ensure environmental stewardship is part of your business model
Risk is part of doing business in any industry, but with the right planning, tools, and expert input, you can limit exposure and safeguard your investment.
See also: How Much Does It Cost to Start a Storage Unit Business? Full Budget Breakdown
How to Launch and Scale Your Oil Business
Once your oil business is structured, funded, and licensed, the next step is execution. How you launch will affect your operational efficiency, customer perception, and long-term growth.
A successful launch sets the tone for scalability, especially in a competitive industry like oil and gas.
Launching Your Oil Business: The First 90 Days
Your launch should focus on getting operational systems in place while attracting your first customers or contracts. This stage is critical, whether you are starting a retail outlet, oil trading business, or service company.
Key areas to focus on:
- Finalise vendor and supplier contracts
- Hire or onboard your first team members
- Secure necessary tools, logistics, and storage
- Implement software systems for inventory, dispatch, or sales
- Begin marketing through digital channels and word-of-mouth
Consider advertising through platforms like Entrepreneurs.ng to reach a targeted audience of entrepreneurs, B2B clients, and business decision-makers. Explore our Advertising Packages to put your brand in front of the right people from day one.
Marketing and Branding for Oil Businesses
The oil industry often competes on price, service quality, and reliability. Strong branding helps you stand out and build trust.
- Develop a clean, professional brand identity (logo, colour scheme, uniforms)
- Create a simple website that explains your services clearly
- Build credibility with testimonials or case studies
- Invest in community engagement or CSR if operating locally
If you are launching a new brand, Entrepreneurs.ng offers tools to help with your logo design, brand development, and visual assets.
Operational Optimisation
Efficiency in operations not only saves money but also reduces risk and improves client satisfaction.
- Automate invoicing and order tracking
- Train your team in safety and customer communication
- Maintain strict record-keeping for compliance and performance
- Use GPS tracking for logistics if running transport or delivery operations
When and How to Scale
Scaling should not be rushed. Use data from your first few months to decide when you are ready to grow.
Common scale-up triggers:
- Regular positive cash flow and low customer churn
- Demand exceeding current supply or service ability
- Opportunities in new geographic markets
- Partnership offers or investment interest
Ways to scale:
| Growth Strategy | What It Involves | Best For |
|---|---|---|
| Geographic Expansion | Open a new retail site or extend service routes | Fuel retail, logistics |
| Vertical Integration | Add new service lines (e.g., from trading to transport) | Midstream operators, traders |
| Licensing or Franchising | License your brand and system to others | Service models, fuel stations |
| Equipment or Fleet Expansion | Add more vehicles, machinery, or processing units | Oilfield services, storage firms |
Conclusion
Learning how to get into the oil business is about making informed decisions and starting with the right foundation. Whether you are launching a fuel outlet, investing in royalty trusts, or offering services to operators, there is room to grow if you follow the right steps.
From market research and planning to legal setup and scaling, the oil industry rewards those who approach it strategically. Take advantage of expert tools, stay compliant, and be ready to adapt as the market shifts.
We want to see you succeed, and that’s why we provide valuable business resources to help you every step of the way.
- Join over 21,000 entrepreneurs by signing up for our newsletter and receiving valuable business insights.
- Register your business today with Entrepreneurs.ng’s Business Registration Services.
- Tell Your Brand Story on Entrepreneurs.ng, let’s showcase your brand to our global audience.
- Need help with your marketing strategy? Get a Comprehensive Marketing and Sales Plan here.
- Sign up for our Entrepreneurs Success Blueprint Programme to learn how to start and scale your business in just 30 days.
- Book our one-on-one consulting and speak to an expert about structuring and growing your business.
- Visit our shop for business plan templates and other valuable resources to guide you.
- Get our Employee-Employer Super Bundle NDA templates to legally protect your business and workforce.
- Advertise your business to over a million entrepreneurs through our different advertising packages.
FAQ: How to Get into the Oil Business
1. How much does it cost to start an oil company?
Startup costs vary widely based on your entry point. Drilling a well can require anywhere from $1 million to $25 million, while midstream or downstream ventures like transport or retail fuel outlets can range from $75,000 to $500,000, depending on scale and location.
2. What are the licensing requirements and regulations?
To comply with oil and gas licensing requirements, you’ll need business registration (LLC or corporation), operating permits, environmental approvals, fuel storage licences and insurance.
Federal agencies like the EPA and OSHA as well as local authorities, enforce strict regulations across all sectors.
3. How do I get into the oil and gas industry with no experience?
Start by applying for oil business jobs like roustabout, floorhand or tanker driver. These roles typically require only basic safety training (e.g., HAZWOPER or TWIC) and offer on-the-job learning.
Alternatively, launch a service-based business (like equipment servicing) or invest in the sector.
4. Can I invest in the oil business without owning a company?
Yes. You can invest passively through royalty trusts, purchase mineral rights, invest in non-operating interests, or buy into oil ETFs and mutual funds.
Entry capital ranges from a few hundred dollars (for ETFs) to tens of thousands for royalty or mineral rights investments.
5. What qualifications are needed for oil and gas jobs?
Qualifications vary by role. Entry-level jobs (like floorhand or roustabout) may require safety training and physical fitness, while technical roles (like petroleum engineers) need vocational certifications or degrees in petroleum engineering, logistics or related fields.
6. How much can I earn in an oilfield job?
Salaries range widely:
- Roustabouts: $40,000–$50,000
- Floorhands: $50,000–$60,000
- Tanker drivers: $60,000–$75,000
- Technicians: $55,000–$70,000
- Coordinators/dispatchers: $40,000–$55,000
7. What are the best entry paths without drilling?
If you cannot commit to upstream, midstream or downstream entrepreneurship, consider:
- Starting an oil trading business (buying and reselling fuel)
- Launching a service business (cleaning, maintenance, logistics)
- Becoming a fuel distributor or lubricants supplier
These alternatives let you enter the industry with much lower capital and operational risk.
8. How do I develop a business plan for an oil business?
Your plan should include:
- Executive summary
- Market research and competitive analysis
- Business structure and operations
- Funding needs and cost estimates
- Risk and regulatory assessment
Use the Entrepreneurs.ng Comprehensive Business Plan Template to save time and ensure investor-readiness.
9. What are the risks in the oil business?
Key risks include:
- Price volatility from changing global demand
- Regulatory compliance and environmental liability
- Operational hazards like spills or equipment failure
- Legal issues from unclear contracts or partnership disputes
- Reputation and community impact
10. Where can I get help or expert advice?
You can tap into tailored support through:
- Entrepreneurs.ng’s Ask an Expert service for personalised guidance
- The Entrepreneurs Success Blueprint program to develop pitches, financial models, or marketing strategies
- Our shop, which includes templates, brand assets and tools to set up faster
