Billionaire investor Wilbur Ross, known for his big investments in bankruptcies and distressed assets, says he has a positive outlook on the U.S. oil and gas sector as it's becoming the “swing factor” in production globally.

Ross, chairman and chief strategy officer at WL Ross & Co. and also an economic advisor to Republican presidential candidate Donald Trump, told BNN that he’s made about 15 commitments to distressed debt in the oil and gas industries over the last year. Ross said his interest in the sector isn’t because of an expectation that oil prices will rise, but rather because the cost of production has decreased.

“It’s not that we think that oil will go back up to US$100 [per barrel] or anything like that,” he said in an interview. “We don’t really see that happening. But what we do see happening is the cost of production and exploration have come down enormously – especially in U.S. shale areas and more particularly, in a couple of the regions in West Texas where the rock is particularly susceptible.”

Ross says production costs are not inflated like they were during the peak of the oil boom, and attributes that drop to technological advances.

So far, Ross said he’s mostly focused his investments on U.S. companies “simply because there are more names and we have been following them closer.”

Looking to other parts of the world, Ross said other major oil players like the Saudis and Iran have gone as far as they can go in terms of their production capacity.

“Iran is making pretty good strides back to where they were,” he said. “But both Iran and [the] Saudis, for different reasons, are not going to find it that easy to make further increases in their production, with the exception of Iran getting a little bit back to where it had been.”    

Ross also noted that Canadian companies have been on his radar but said they haven’t been an investment focus for him.

“The Canadian companies for the most part tend to be a little bit smaller and they do tend to have had a little bit better market receptivity to equity offerings.  And our strategy for this particular portion of our investments had been to go into fixed income rather than into equities,” he explained.

“I think the Canadian companies have done a pretty good job protecting themselves – even if there’s some further downside before things normalize.”