Everyone knows that oil and gas companies make billions in profit every single year. However, most people are unaware of the staggering costs involved. The turnover they create is astonishing, but they need to make that much cash to secure their profits. With that in mind, we wanted to take a look at the situation and provide accurate information. After reading this post, you should have a more precise perception of the industry. At the end of the day, oil and gas firms have higher rates of expenditure than almost any organization in the world.
Firstly, oil and gas companies have to pay millions in staffing costs every year. The people working in that industry have to travel around the world and stay away from home. Their job also presents many dangers the workers face on a daily basis. For those reasons, the biggest oil firms have to pay a lot of money in wages. People simply wouldn’t perform the job if they weren’t rewarded financially. Around 20% of the total money spent each year by oil companies pays for their staff.
There are lots of things that can go wrong when drilling for oil and gas. That is why companies in that marketplace need the best safety equipment possible. They also have to pay for a metering station near their drilling sites, and heavy machinery. Without those tools and devices, it would be impossible to extract the oil and gas without risking lives. On average, an oil company will spend around 30% of their profits on equipment every year.
There is no getting away from the fact that all oil companies will need suitable insurance. Failure to obtain the right policies could mean you place workers at risk. Your team needs to know they will get compensated adequately if something goes wrong. Also, your company could find itself in court if you don’t pay for the correct insurance. In most instances, the provider you select will create a custom policy based on your organization. That means you can get cover for every process your workers might perform.
You can’t stay in one place when drilling for oil and gas. People who want to make a high profit will have to strike deals in many different countries around the world. That means they often have to pay government fees and offer bribes to people in high places. Of course, it’s hard to tell how much cash oil companies spend on that every year because most of the deal are made in private. Even so, you can rest assured the biggest brands spend a fortune on wining and dining the right people.
Now you know about some of the biggest expenses faced by oil and gas companies today, you should have a better perception of the industry. When all’s said and done, those firms make some of the highest profits in the world. However, you can now see their outgoings as just as shocking. There’s an old saying that goes: you have to spend money to make money. That is certainly true when it comes to businesses in this marketplace.