The factors restraining investment in the oil and gas industry Dissertation

The factors restraining investment in the oil and gas industry - Dissertation Example Investment is an important source of capital for growth in the developing countries. It provides a package of new technologies, management techniques, finance and market access for the production of goods and services; and thus contributes significantly to raise the productivity in the host countries in attaining their overall economic growth. An investment is been determined by balance, opportunity, and risk, which are relative concepts, especially with respect to Exploration activities. Opportunity involved in finding commercial quantities of oil and gas, the intensive capital required for undertaking exploration and production result in significant business risks. In many developing countries, the transformation from an agricultural and resource based economy to the export-led economy has contributed to higher energy consumption. Although they are oil & gas reserves located in those countries; very few had sufficient financial resources for the upstream investments, especially for the development of oil & gas exploration and production. Government can promote investment opportunity by adopting a proactive approach to selecting foreign partner towards improving entry procedure moreover, reducing red tape in oil and gas sector operation. However, many countries had granted development rights to foreign Companies, which have adequate capital, technology, and expertise; still some foreign Companies are not investing in those countries for many reasons.