The oil and gas industry is currently in the midst of a transformation while aligning itself with a future where fewer fossil fuels are used. Many are realizing that becoming sustainable requires having portfolios that contain more than just traditional fuels. This can be anything from energy storage to renewal energy transportation. Investments are going into both acquisition and research.
Funding is easy to find for green initiatives, while traditional projects have fewer options. However, funding is still needed as energy demands climb until renewable resources are more accessible to all.
Need for Financing Due to Demand
There is no less demand for oil and gas than there was years ago, but many banks are making changes to their financing. It’s easier for large companies to find funding but harder for new entries into the market. Some banks will offer to lend for the new demands, but further capital also has to be introduced to handle all of the refinancing that is being done.
Changes to Funding Sources
Funding sources for oil and gas are changing fast. Some who are now focusing on the renewable market have pulled out while new investors are taking their place. Independent oil companies and equity-backed companies are finding funding in the offshore stock exchange.
Options include the capital market, as well as private equity. It’s believed that over time the banks will also come back around to offering more funding. Those in the market can also make use of new alternative financing options available. It’s likely that oil companies will begin to sell older assets to repurchase them through leasing arrangements.
If you’re interested in lending for the oil and gas industry, there are solutions. If you’re looking for a partner to help, Third Bay Capital is here to help. Get in touch with us today.