New Industry Ventures, a Russian fund created last year, today announced its first deal. The fund has injected 100 million rubles ($1.6 million at the current exchange rate) in ADL Completions, a startup launched in 2017 to develop technological solutions in multilateral and multi-bore well completion.
These solutions allow “side-tracks” to be built onto existing wells, maintaining the flow-rate into the main well. The startup says it has completed research and development and pilot testing. “A prototype system is now in place, [we’re] ready for batch production.”
The fresh funding will allow ADL Completions to fine-tune its multilateral completion technologies, including “intelligent completion and finishing under multi-stage fracking.” This will allow customers to “address more technically complex tasks and increase [their] production capacity.”
Vadim Yakovlev, Deputy CEO for Exploration and Production at Gazprom Neft, explained the significance of such technologies for Russian oil companies:
“A significant proportion of our projects today are connected with the development of hard-to-recover reserves. Success here depends directly on the standard of the technology used. The solutions we need aren’t always available on the market, and it often falls to us to develop them, together with our partners. [This] investment project is creating an opportunity to develop a domestic innovation, with major potential for use in high-tech drilling at fields with complex geology. Projects like this aren’t just needed by our company — they’ll facilitate the development of Russia’s entire oil production industry.”
Alexander Stepanov, Deputy Chairman of the Management Board at Gazprombank, added:
“The oil industry, worldwide, is becoming ever more high-tech. Many traditional fields are, already, almost completely worked out, production levels are falling, and the time for ‘hard-to-recover’ oil is nigh. This is particularly true for Russia, where unallocated reserves are located in remote, ecologically fragile regions. (…) ADL Completions’ high-tech solutions have proved their effectiveness, successfully passing pilot testing at major Russian oil companies’ facilities. [Their technologies] are highly competitive and will be in considerable demand both in Russia and abroad.”
The New Industry Fund is backed by four companies controlled directly or indirectly by the Russian government. These include GazpromNeft, one of Russia’s leading oil companies; Gazprombank, a financial arm of the state-controlled energy giant; RVC, the state fund of funds dedicated to innovation; and the VEB Innovation center of competence, which is part of VEB.RF (previously known as Vnesheconombank).
Aiming to lower Russia’s reliance on foreign technology in the oil industry, New Industry Fund targets tech companies, including startups, specializing in new materials, technologies, products and services for the oil and gas, petrochemicals and energy industries. Its investment focus will also include resource-management and energy-saving technologies, as well as digital products including Industry 4.0 solutions.
The case of ADL Completions illustrates this strategy. The startup claims its solutions “allow for using domestic equipment in high-tech projects at lower capital expenditures and improved cost effectiveness”, while “over 90% of multilateral completion equipment available on the Russian market are currently supplied from abroad,” resulting in negative project profitability.
