India’s newest fund will invest in oil and gas startups

Photo credit: Swaminathan.

Oil and Natural Gas Corporation (ONGC), an Indian multinational oil and gas company owned by the government, yesterday announced a US$15 million fund to invest in startups. It will provide seed capital, mentoring, and connections to the market.

The fund was announced in Uttarakhand’s capital city, Dehradun. Chairman and managing director Dinesh K. Sarraf said that technological advances in the sector will help it grow.

Oil and gas startups haven’t made much headway in India yet, but there are a few that are popular in other places. Tachyus, a Silicon Valley-based startup operates different data-driven services to help producers figure out where they’re losing out and how to cut costs. One of its products, Aqueon, optimizes “waterflooding” – the process of injecting water into an oilfield to increase pressure and output – by figuring out the least amount of water necessary for production. Tachyus has raised a total of US$20.2 million in funding, including a US$13 million investment from Founders Fund.

Dharmendra Pradhan, the Union Minister of Petroleum and Natural Gas, explained to the Economic Times in March that the government would be looking at more oil and gas startups in the near future, referencing the growth of the shale oil sector in the United States. Often referred to as the “shale gas revolution”, it was a new form of energy production that was led mainly by smaller companies and startups – some have even called it the dotcom revolution of the energy sector.

ONGC’s international arm is operational all over the world, including parts of Latin America and the Middle East. It’s been making moves to expand across the globe – in March, it purchased a 15 percent stake in an oilfield owned by Russian oil company Rosneft for US$1.3 billion. It’s also one of the many oil and gas companies focusing on increasing production within India, in the hopes that they can reduce the country’s heavy dependence on imported energy.

The list of venture capital funds investing in Indian startups is slowly growing longer. In July, India’s Green House Venture Accelerator partnered with Japan and Silicon Valley-investor World Innovation Labs to launch a US$52 million fund for the country.

ONGC also gave out awards for innovations. One went to Rajendra Bhambu and Deepak Naik, who set up an emergency brake for drilling rigs to ensure safety, and another to Prajesh Chopra, who created a dual SIM-based cellular router that would give workers data connectivity.