Oil and Gas Technology Investment Opportunity


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.

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