When it comes to investing, oil and gas stocks have taken the lead. Oil and gas stocks have proven profitable for many investors looking for long-term, serious investments. It sounds like a good option, but you should familiarise yourself with the specifics of these stocks. This comprehensive guide tells you everything you need to know about the best Indian oil & gas stocks for 2023.
But When you hear the term oil & gas stocks, you might wonder what it is. In simple words, oil & gas stocks are companies engaged in refining, marketing and extracting gas and petroleum products.
Should You Invest in Oil and Gas Stocks?
Most analysts advise investing in oil and gas stocks for the long term. In recent years, nearly simultaneous geopolitical events have caused significant fluctuations in oil and natural gas inventories.
Nevertheless, as far as India’s GDP growth is concerned, the Indian oil and gas sector is trending positively in the coming months. The sector is believed to play a major role in boosting India’s GDP levels, and the increase in investment in this sector demonstrates that.
The industry’s outlook for Indian oil and gas stocks is bright. Sector expansion looks optimistic, given the rising demand for crude oil and the rising use of crude oil in both the industrial and domestic sectors.
Another factor that makes this sector a viable investment option is that the Indian government has updated its regulations for this sector. It aligns with the government’s desire to make it easier for foreign investors to do business in India. Startup challenges are being addressed dynamically as India encourages investment in the oil and gas market.
Best Oil & Gas Stocks to Invest in this Year
Several top oil and gas companies are in the market, with a few more to watch. Below are the major players in the industry and a brief overview of each.
1. Oil India
The Ministry of Oil and Gas, Government of India, owns Oil India, which is also known as OIL. Oil India engages in several major businesses, including exploration and production, as well as the transportation of crude oil, LPG production, and pipeline provision.
The Indian government owns 66.13% of the company’s shares, with the rest held by private companies. Investors consider it a solid investment business with government-backed support guarantees, and it is at the forefront of investment options in this sector.
Oil and Gas Company, another well-known Indian government company, is also a leader in this field. The company produces about 84% of India’s natural gas and about 70% of India’s crude oil. It covers most of the Indian oil and gas sector demand, around 57%. When it comes to oil and gas stocks, investing in ONGC has always been lucrative for investors with a long and stable history.
3. Deep energy resources
This company is interested in workover capabilities, drilling, gas compression, production and exploration. The company is a pioneer in the oil and gas service sector, especially in gas compression. They also provide major equipment manufacturing and installation services. It is a good stock to own as it is a growing company and offers a niche but important service.
4. Hindustan Oil Exploration Company
Hindustan Petroleum Exploration Company has interests across its nine gas and oil fields in Cambay, Assam, Covely, Arakan Basin and Rajasthan. It is involved in multiple stages of exploration, production and development. Given the growing interest in the Gulf region and the further development of the company’s business pipeline, this stock is a solid pick.
5. Reliance Industries
Reliance Industries is headquartered in Mumbai. It serves the petrochemical, power, natural gas, retail, and several other industry segments. The largest listed firm in India by revenue and market capitalization is Reliance Industries, which is also regarded as the country’s most lucrative business. Oil & gas stocks of this company are doing well in this field based on historical returns.
Oil company stocks have shown significant gains in recent years. However, it was also recognized that it would come with certain challenges and risks. As an investor, you should weigh the pros and cons and decide if Indian oil stocks are the right investment choice for you.