To bring in innovations and increase the involvement of startups in the petroleum sector, the ministry of petroleum and natural gas is looking to partner with startups and include them in core exploration and production activities.

“Oil companies shall not only be funding these startups but will include them in exploration activities as well. This is basically being done to bring in innovations in the sector that is difficult for bigger companies to come up with. Oil companies have promised Rs.315 crore till now as their startup fund which is expected to increase in the near future,” said a petroleum ministry official requesting anonymity.

This comes in the backdrop of Prime Minister Narendra Modi launching the Startup India initiative in New Delhi on 16 January.

“A dedicated startup fund worth Rs.10,000 crore will be created for funding of startups. Startups will be exempted from paying income tax on their profit for the first three years… The government is working on a simple exit policy for startups,” said the government in a statement on 16 January.

According to the official website of the Ministry of petroleum and natural gas, there are eleven public sector units under it.

“New ideas and innovations can only come about if there are smaller and new players involved. The ministry of petroleum has concrete plans to infuse these startups in the activities of these bigger public sector units. So the idea is not just to fund them but to make use of these startups in deriving technological innovations and involve them in some of the critical hydrocarbon related activities,” said a National Institution for Transforming India (Niti) Aayog official requesting anonymity.

Queries emailed to the spokespersons of Petroleum Ministry and Niti Aayog on 28 November remained unanswered.

Experts think there is no risk in including fresh players in the core processes.

“Startups have a lot of innovative ideas. For example, startups in the US are drilling for oil. They go and they takeover old abandoned fields and they develop technology through which they can figure how much oil is left and in what way drilling can be done. Large companies will not do this. So there are a lot of startups which have novel ideas and I think for a country like ours which imports a large part of its petroleum needs, this would be very good,” said Saurabh Srivastav, Chairman of Indian Angel Network.

Source:  vccircle