An initiative by the Russian Energy Ministry and private business could see Russian startups unleashed on the country’s oil wells as extracting gets tougher and foreign expertise dries up.
The chill in foreign relations comes at a time when the so-called “easy oil” in Western Siberia is running low, meaning Russian energy companies need innovative new approaches to extracting hard oil from the ground.
“Oil companies and startups need to interact more,” said Oleg Zhuravlev, the general director of energy startup Wormholes, a Skolkovo resident. “This is primarily so that innovators can better understand the problems faced by oil companies,” he added.
LUKoil CEO Leonid Fedun visiting the stand of a Skolkovo resident at this week's forum. Photo: sk.ru
Andrei Gaidamaka, the head of investment analysis and investor relations at LUKoil, Russia’s largest private oil company, said at the Oil and Gas Forum in Moscow this week that companies like his are seeking cooperation with innovative startups to increase efficiency of their oil fields.
LUKoil has a large number of oil wells in Western Siberia, but Russian startups would only be granted access to a handful of experimental sites to test new technology before the company decides to invest in one or the other, Gaidamaka said.
Entirely new service businesses could be built by LUKoil or other energy majors on the back of the emergent technology, he added, giving the example of one it started from scratch, the Eurasia Drilling Company.
He warned, however, that it took a decade to turn Eurasia from an experimental startup into a fully fledged logistics major with a multibillion dollar turnover that’s listed on the London Stock Exchange.
More broadly, it emerged at the forum that the Energy Ministry is looking at revising legislation that bans startups from participating in tenders to work on large-scale energy projects. Current law says that companies must be of a minimum size to qualify for tender application.
That would replicate a law in oil-rich Kazakhstan, where startups affiliated with state universities are guaranteed access to tenders.
The executive director of Skolkovo’s energy research cluster, Nikolai Grachev, is part of a working group assembled by the Energy Ministry to set out these recommendations and others in writing in the coming weeks.