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© 2016 Small Business California

Tracey Clayton
Apr 26

Oilfield Company Starting Checklist

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Owning an oilfield or at least having the rights to extract oil from one is often seen as a money cheat code by the general public. The problem with this viewpoint, however, lies in the fact that people who aren’t within this industry have no idea just how much effort, knowledge and specialized equipment it takes to handle this. They also haven’t got a clue just how delicate and potentially dangerous this is. In order to shed some light on this topic, here are several things you would need in order to start your own oilfield company.

 

 

Choosing the type of business

The first thing you need to understand about starting a business in this industry is the fact that you don’t actually have to be the one extracting oil in order to make money off it. For instance, you can make a company that specializes in retail, installation or maintenance of the equipment in question. You can also be an independent consultant, yet, this is an occupation that requires a certificate, a lot of experience as well as a huge name in this industry. This alone will determine where your starting position within the industry is.

 

Validate your idea

The next thing you need to do is consider just how profitable/viable your idea is. After you know the type of business you want to establish, decide on the scope and the size of your business. This will allow you to start drafting a budget and give you at least some idea about just how viable this plan of your actually is. Also, when you know what your business is supposed to look like, you might want to start exploring your competition and try being honest about what your odds of facing them are.

 

Check the local equipment options

If you’re already in this industry or have a partner with some previous experience (otherwise, it wouldn’t be smart considering starting an enterprise here, in the first place). This means that you’ll already have an idea of all the equipment you need in order to get started. The problem lies in getting the equipment you need, seeing as how you can’t just walk into a general convenience store and check what’s available. Instead, you need to find a specialized retailer of oilfield equipment and see if their prices fit your budget. Shipping these massive pieces of equipment across the globe may seriously disrupt your budget, which is why checking out the local options might be the most logical first step.

 

 

Look for adequate insurances

As we’ve already mentioned in the introduction, starting an oilfield company also means that you need to prepare your business for some potentially dangerous scenarios. Now, there are a lot of different insurance types and policies that you’ll have to consider, but there are several that are must-haves. First of all, there’s the property insurance that covers rigs and contractor equipment. Then, there’s the general liability and professional liability, which are standard for most industries. Then, there’s the insurance regarding the well control, which covers things such as drilling and service contractors/operators, as well as non-operators. Finally, seeing as how this is a specific industry (not a particularly eco-friendly one), you also need to have a pollution liability insurance.

 

Prepare for the launch

The next thing left for you to do is to launch your operations. As soon as you have the money, the insurance coverage of key aspects and essential personnel, as well as the equipment, there’s nothing to prevent you from getting in the midst of things. Just remember that this is not the industry where you can hire just anyone and hope that they’ll learn the job along the way. This field requires specialists, which is the direction you need to take in your hiring process.

 

Conclusion

As we already stated, several times over, this is an industry that only people with a specific set of skills and certifications may join. However, in some aspects, it’s just business like any other and should be treated that way.

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