At a time when many sectors are feeling the effects of the global economic downturn, the oil industry is revelling in the record price of crude and is proving an increasingly popular target for cash-rich private equity firms. But investing in the oil industry brings a host of problems, ranging from political interventionism to difficulty in identifying trends within the industry.

The buyout industry’s appetite for oil and gas companies has grown in the last five years, although some firms have been operating in the sector since the early 1980s. There were 14 deals worth $2.4bn (€1.5bn) in the sector in 2003, rising to 34 deals worth $12.2bn last year, says data provider Dealogic. This year, there have already been 13 deals, worth $5.3bn.