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The Octane management team believes the
oil and gas technology sector offers a compelling opportunity
for venture capital investment. The Petroleum industry
has annual expenditures in excess of $180 billion in
upstream oil and gas exploration and production alone.
Technology has added at least 25 million barrels per
day more oil ($620B per year) and has the potential
to add more capacity . Despite the size and breadth
of this industry and the success of technology, adoption
of technology from concept to mainstream usage for major
innovations is the slowest of any major industry .
The industry has entered uncharted territory
where worldwide demand for energy is outpacing the E&P
industry’s ability to find and develop new reserves
. Emerging nations including China and India continue
to grow which requires more energy. Exploration and
development costs are the highest in history yet the
size and breadth of new reserve discoveries continue
to decline. The wealth that has been created from high
energy prices has accrued to the owners of established
reserves as opposed to the explorers and developers
of new reserves. This imbalance has served to stunt
the growth of the oil and gas technology industry. The
increased demand for resources and the challenges of
the industry to meet demand combined with relatively
high oil and gas prices have created a huge opportunity
for targeted investment in oil and gas technology.
New company formation and deal flow in
oil and gas technology are robust as a result of both
increasing market demand and technological advancements
in materials science, biosciences, communications, and
information technologies that enable more cost-effective
solutions to energy and environmental problems. Demand
for capital to support the businesses that are developing
and deploying these solutions is also growing.
There are opportunities available in oil
and gas technologies that cut significant costs, increase
the amount of recoverable reserves and deliver efficiencies
throughout the E&P value chain. The broad oil and
gas technology sector has historically been under-represented
in the venture capital community. As a result, the Principals
see good opportunities for a skilled investment team
to invest on terms that are attractive relative to other
technology sectors targeted by private equity firms. |
