Texas is the leading producer of oil and gas in the entire US. In 2020 alone, the state produced 43% crude oil and accounted for 26% of natural gas produced in the year. Even though the market is quite competitive, it has a huge prospective for revenues and success, if the business performs at its best.
So far, Texas alone is home to more than thirty oil refineries, which has in turn skyrocketed the competition level over the last few years. Many small-scale businesses also forayed in the oil and energy business in Texas with the hope of making it big in the market. Nevertheless, most of them suffered a setback due to a plethora of reasons.
It is hence important to implement appropriate measures to start a successful oil and energy business in Texas. Here are some of the significant steps that will help you launch your venture in this domain with success and take it to its zenith easily.
Perform complete market research
The foremost step in this regime is to collect information on the Texas oil and natural gas market. Prior knowledge will help you to prepare an apt business strategy and steer its way to the topmost industry contenders. Some of the major factors you must remember about this market hence include as below:
· As of 2020, the total reserves of crude oil in Texas were 15,612 million barrels.
· By 2020, Texas hosted 118,957 natural gas wells
· In 2019, the state produced 23,472 trillion BTU of energy.
· The year 2019 witnessed a consumption of 1555 million barrels of petroleum
· Energy consumption differs with the place since the climate is varied, starting from the west to east.
· Spindletop oil field discovery in 1901 proved to be a milestone in the Texas oil and gas market.
· Gulf Coast is the major area to host maximum oil and natural gas refiners .
The two state-level organizations regulating the oil and energy business in Texas are the Texas Commission on Environmental Quality, and the Railroad Commission of Texas.
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Prepare a business model
Three major types of models ensure to align your plans with the models for oil and energy business in Texas:
- Upstream business model: It involves exploration of crude oil and natural gas reserves in Texas and production of the same.
- Midstream business model: Acting as the intermediary, the main function of this business model includes transportation of crude oil, extracted natural gas, fuels such as coal, finished oil products like butane, paraffin wax, petrol, and more.
- Downstream model: In this business model, you will need to refine the crude products extracted from nature and market the same within Texas and other US states.
Get the required registration
You need to decide whether you would like to register your business as a corporation or in partnership with another company. If you want sole ownership of the business, it is better to register it as a corporation instead of a partnership. Besides, you must choose a proper business name, while ensuring that:
- It does not match with any other existing business in the US.
- It should not have any resemblance with the name of government authority.
Once done, you have to obtain the EIN or Employer Identification Number. Next, submit all these documents to register your business with the Texas government.
File for permits and licenses
After registering your oil and energy business in Texas, you must file for different permits and licenses required for starting the operations and hiring employees. Following are some of the major permits you will require:
- The Texas Commission on Environmental Quality will issue Air Permits, Air Permits by Rule, Petroleum Storage Tank Registration, Contaminated Soil Disposal, and more.
- From the Railroad Commission of Texas, you will get permits like Disposal Well or Injection Oil, Drilling, p-5 Operation Report, Refinery and Gas Processing Plant, T4 Permit, and more.
- Texas General Land Office will issue the Geophysical Permit
- The Texas Department of State Health Services will process the license for Radioactive Materials.
Collect the required capital for early-stage funding
Several big players in the oil and energy market of Texas will offer you the required venture capital to kickstart your business and fund the initial operations. Many companies will willingly invest in your oil and energy business in Texas. However, for this, your business ideas, future goals and forecast reports must be compelling and should offer high revenues in the future.
Membership with energy associations of Texas
With the help of oil and energy associations of Texas, you can grow your network and connect with several other businesses from where you can
- Export finished goods or transport crude oil
- Import the raw materials
- Rent several refineries for extracting crude oil and natural gas
Besides, you can join one or more of the many associations in Texas like Reliant Energy, TriEagle Energy, Payless Power, Pulse Power, and more.
Keep the R&D department separate
Lastly, you must ensure to segregate the research and development unit of your oil and energy business in Texas from your core business area and refineries. It must span over a huge area so that all the units are easy to operate individually. Besides, you must have provisions for installing solar panels, wind turbines, chimneys, and more, to abide by the latest market trends.
Takeaway
Starting a successful oil and energy business in Texas is not easy. The market competition is so intense and the demand is excruciatingly high that you need to pitch unique business ideas with proper stats and forecasts. This will help you collaborate with venture companies and get the required fund for kick starting the business.
To get detailed information about venturing into oil and energy business in Texas, feel free to contact 10 Digits. It will make you aware of all the associated risks and benefits. You can also seek its help to open your business without hassles and gain a significant foothold in the ever-profitable oil and energy domain.