Using technology and innovation in the petroleum industry is the main factor effective in reducing costs, increasing competitive power and countering future problems of the petroleum industry. That is why technology and innovation have turned into major actors in the oil sector. Over the past decade, oil startups have been focused upon more than ever in light of their high-risk ideas which mainly rely on technology.

Zangeneh has called for the formation of startups in Iran’s petroleum industry, saying the petroleum sector would see major changes, should this objective materialize. He said: “Therefore, there is firm will on our side and we have allocated investment for this purpose.”

Upon Zangeneh’s instructions, the Ministry of Petroleum has set up a committee to support knowledge-based oil companies. Established to develop and upgrade the ecosystem of petroleum industry technology and innovation, this committee is determined to make long-term plans, create active relationship between stakeholders, use existing capacities in inner and outer bodies and lead entrepreneurship groups to recognize oil startups and knowledge-based companies with a view to preparing the ground for the development of technology and commercialization.

New Experience in Oil Sector

Over the past decade, Iranian startups have emerged in various sectors, but they are yet to make themselves known in the energy sector, particularly the petroleum industry. The Ministry of Petroleum had not taken any concrete actions prior to Zangeneh’s directive. But now the mission has been assigned to the Office of Deputy Minister for Engineering, Research and Technology to study and assess the development of ideas. Furthermore, the Administration of Technology Commercialization and Supply Regime is tasked with this issue specifically.

Mohammad Saheb Kar Khorasani, head of the Knowledge-Based Companies center of the Office of Vice President for Science and Technology, has said that of 4,350 knowledge-based companies recognized in Iran, 500 are more or less related to the oil and gas sector.

Hassan Montazer Torbati, CEO of National Iranian Gas Company (NIGC), has said the idea behind the establishment of startups was to decide on commercialization and high-risk ideas, so that they would transform their ideas into product without any concerns for the initial capital. Therefore, there must be concentration on possible ideas which may turn into a process so that the projects would come online shorter than envisaged.

National Iranian Oil Company (NIOC) has expressed its readiness to make maximum use of the potential of knowledge-based companies and startups. However, it is said these companies should provide practical and not idealistic proposals for overcoming challenges. Therefore, in order to make use of potentialities, challenges must become known and plans be made for overcoming them.

The main issue with startups is commercialization and demand.

Sirous Vatankhah, secretary of energy technology development at the Office of Vice President for Science and Technology, believes that demand and consumption are the main drivers in the energy sector. That has no significant place in Iran’s executive organs.

Noting that innovative businesses have profoundly changed energy sector activities, he said: “Today, many things have been done in the startup sector. In the energy sector, with e-sale of gasoline, a new project would emerge.”

Given the significance of using modern technologies in the petroleum industry, the Ministry of Petroleum’s insistence on the use of technologies and creating new business environments, startup activities in Iran are significant due to their innovative contribution to the petroleum industry. Therefore, NIOC is determined to use the experience of the Office of Vice President for Science and Technology and specifically focus on the startup issues.

Parviz Sangin, general director of Ministry of Petroleum Technology Commercialization and Supply Regime, referred to Iran oil sanctions, saying: “We have made our utmost efforts to establish cooperation between ourselves and startups, because under the present circumstances in the country, startups and their solutions would be effective in overcoming challenges.”

Jafar Tofiqi, president of Research Institute of Petroleum Industry (RIPI), touched on planning for the establishment of an innovation center to complete the production chain and commercialize technology, saying: “Since we are moving into the phase of technology development while commercialization must be pursued along with accelerators and knowledge-based companies, we plan to set up an innovation center at RIPI in order to expand the cooperation network and complete the production chain, proceed with commercialization and supply technology on the market.”

He said that RIPI relies on the cooperation with universities, research centers as well as domestic and foreign companies for fulfilling its obligations, i.e. equipping the petroleum industry with new technology and knowhow in a bid to create higher value-added for the country.

Investment in startups started in 2005. North America has the highest share in this ecosystem, followed by China and India.

In Iran, oil and gas industry complications have hindered diversity of startups. It should be also taken into consideration that when startups get engaged in the petroleum industry, new businesses would take shape and this issue will definitely face resistance.

The Ministry of Petroleum has decided to facilitate the activity of these companies and clear the way for their entry into new petroleum industry businesses. Startups should also focus on the development of technology genuinely and supply a product whose technological aspects have been taken into consideration.

 Currently many renowned international companies have issued appeals in support of startups. Even at an offshore technology conference in Houston, 10 out of 60 startups were selected as model companies. They held negotiations with 40 companies including Chevron, BP and Schlumberger.

Courtesy of Iran Petroleum