Name a precious liquid commodity that we probably don't have enough of.

One good answer is water. The other is oil. Whether it's light, sweet, crude, sour, viscous liquid, or hard shale, good ol' black gold is where it's at. Though there has been plenty of posturing over the recent high oil prices, the combination of the dwindling supply of oil -- some estimates say that we have only 35 years' worth left -- and growing demand, especially from developing economies like India and China, mean that we'll likely see McDonald's go vegetarian before we see oil prices crash.

Pick a card, any card
Considering the majors in the oil and gas industry, it can seem a bit like a toss-up in trying to figure out where to invest. Whether you're talking about BP (NYSE:BP), Chevron (NYSE:CVX), or ExxonMobil (NYSE:XOM), you're looking at a vertically integrated fossil-fuel company involved in exploration, production, refining, and marketing, with lubricant and petrochemical operations as well as non-fuel operations such as convenience stores attached to the gas stations. The brands that these companies operate under all have great market recognition, whether it's Amoco, Castrol, Chevron, Texaco, Exxon, or Mobil.

Though the majors have all been doing well in the past few years, I think U.K.-based BP, headed by Lord John Browne, the longtime chief who is planning to retire by the end of 2008, is well positioned for years to come. Investing in BP at this point is like investing in a country -- the company clears more than $250 billion in revenue annually, and its push into Russia could be a great growth driver going forward. It's also not shy about returning profits to shareholders -- in 2005, BP gave back $19 billion to shareholders through a combination of dividends and share repurchases.

For 2006, BP's revenue is up 16% year over year, and pretax profit margins have remained relatively steady at 14%, while they remain on pace to top the $19 billion returned to shareholders in 2005. BP has taken some tough lumps lately, though, most recently in Alaska, when advanced corrosion was found in the company's Prudhoe Bay pipeline. While the 400,000-barrel-per-day field is no small matter, I see the weakness in the stock since the shutdown as a good opportunity to buy.

Enter the warm fuzzies
And for those who like BP's returns but want something they can feel good about, BP has committed $8 billion over the next 10 years to its BP Alternative Energy division, a group that was formed to "extend significantly our capabilities in solar, wind power, hydrogen power, and gas-fired power generation." While some contend that it's a PR campaign aimed at "greenwashing" the company to give it a better image, I believe that it's the oil and gas majors like BP that are the best positioned to be at the forefront of alternative energy.

It would be great to think that we could jump directly to a petro-free future, but the most likely scenario is one in which we develop technologies that work side-by-side with oil and gas to slowly pare down our usage of fossil fuels. From an investor's perspective, BP's work in this arena isn't just the nice Boy Scout thing to do; it also positions the company at the crossroads of fossil fuels and alternatives. If alternatives are going to cut in to the petro market, why not be there to profit from that, too?

So will BP be the best international stock for 2007? I think it very well could be -- and if you're nodding your head right now, let us know and rate BP as an outperform in the brand-new Motley Fool CAPS community. Think I've been sniffing too much gasoline? Think BP is a dog? Let us know that, too, by rating BP as an underperform in CAPS. Based on your thoughts, we'll declare the best international stock of 2007 early next week.

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Fool contributor Matt Koppenheffer hopes that someday he'll be riding a hovercraft running on cold fusion, but he's OK with his Honda Civic for now. He does not own shares of any of the companies mentioned. The Fool's disclosure policy is always sweet and never crude.