Startups Emerge in Iran Oil Sector
Startups are mushrooming all across the globe, creating lucrative businesses. There are many who have ideas in their minds, but have not had the chance to develop them mainly due to economic restrictions.
Iran has been no exception. In recent years, Snapp, the e-hailing service modelled on Uber, has grown popular and profitable.
Now that the US has imposed the toughest ever sanctions on Iran’s petroleum industry, startups may be a good idea for the prosperity of this sector. Many may sound pessimistic as the United States is restricting Iran’s oil sales, but a startup does not cost too much and is less affected by economic conditions. Most Iranian startups have been set up in the past ten years during which Iran has twice been under tough sanctions.
The energy sector depends more than others on startups and accelerators. This is currently transpiring the world.
Mohsen Ebrahimi, director of planning at the Office of Deputy Minister of Petroleum for Research and Technology, told Iran Petroleum that I.TECH is the first Iranian accelerator in the energy sector.
“The high level of energy consumption in the country necessitates the presence of startups and accelerators in this sector we need to benefit from this ecosystem. A startup success story in Iran is Snapp which was implemented by a foreign company in Iran. But unfortunately, startups have not been much active in the petroleum industry in Iran mainly because the petroleum industry and the energy sector are in the hands of state,” he said.
Ebrahimi said the establishment of oil and gas startups in Iran was due to efforts made by Iran’s Petroleum Minister Bijan Zangeneh.
He added that Iranian startups showcased their achievements at Tehran’s 24th annual Oil Show, which was a turning point in the history of this exhibition.
He said that the complex nature of processes in the oil and gas industry does not allow for more diversity in the startups.
I.TECH is currently cooperating with Iran’s Petroleum Ministry. I.TECH examined a caseload of more than 50 startups and finally chose 15 to put their achievements on exhibit at the Oil Show.
The most significant function of startups is training, empowering and advising companies. Their agenda also includes providing basic capital, preparing a venue for joint work with other companies and linkage to the market.
The products of startups are analysis-based and may not involve hardware. They accomplish their mission just by processing the recovered data. TECH has concentrated on IT in the petroleum industry.
Ebrahimi said there are currently about 500 startups in the world, 90% of which involved in IT either directly or indirectly.
Another startup which Iran hopes to be able to implement is Enercoin, a blockchain-based digital asset and currency designed for management and optimization of energy consumption. The startup is permissible in line with Article 12 of Law on Removal of Obstacles to Production. The Petroleum Ministry is in talks with 120 scientific forums at universities across Iran in a bid to implement Enercoin in the best possible manner in the energy sector.
Enercoin is currently effective in some districts in Tehran in order to help save on gas consumption. Iran is home to 80 million people, but its energy consumption equals entire Europe’s.
Decision on Startups
Parviz Sangin, general director of technology commercialization and procurement at the Petroleum Ministry, said the mission for following up on startup work had been assigned to the Office of Deputy Minister of Petroleum for Engineering, Research and Technology. The office would examine and evaluate the activity of developers of ideas.
He said that startup activities in Iran are of high significance because they are supposed to equip the petroleum industry with necessary technologies.
“We are seeking to make maximum benefit from the past and current experience of the Office of Vice-President for Science and Technology that specifically followed up on the issue of startups in order to integrate these experiences for the Department of Procurement and Commercialization,” said Sangin. “We are doing our best to clear the way for cooperation between us and startups as soon as possible, because under the present critical conditions the country is faced with the role of startups as well as solutions they offer would undoubtedly help overcome challenges.”
He said under a short-term plan envisaged for this purpose, startups will be chosen so that they would be presented with needs.
“We also plan to receive permission from the Petroleum Minister within three months and finalize the case of startups in the first half of the current [calendar] year,” he added.
Readiness for Cooperation with Startups
Ebrahim Taleqani, director of research and technology at National Iranian Oil Company (NIOC), said startups and knowledge-based companies had not been clearly defined in Iran.
“The main challenge and problem is to know why we have not been adequately successful in assigning work to knowledge-based companies. There is sufficient capacity, but our success has been meager,” he said.
Taleqani said the main reason was that the support offered for the activity of such companies had not been well organized.
“With regard to technological cooperation with universities, there are many mechanisms for knowledge-based companies and startups, but enough work has not been done,” he said.
He said “executive and not idealistic proposals” had to be given for overcoming challenges.
“Therefore, in order to benefit from the potentialities available, we need to list challenges and plan for their removal. We have to make optimal and effective use of idea-developing companies,” said Taleqani.
He expressed NIOC’s readiness to support knowledge-based companies and startups.
Facility of Knowledge-Based Activity
Saeed Pakseresht, director of research and technology at National Iranian Gas Company (NIGC), said: “New businesses are taking shape and undoubtedly any entry of new players will face resistance. The government have to help facilitate the affairs of these companies that have done too much in the formation of ecosystem to bring together various components and elements.”
He went on to highlight some problems faced by knowledge-based companies, saying: “We need to reconsider rules and regulations and we have to facilitate the process of work by easing regulations.”
“We expect self-declared knowledge-based companies to realistically develop science and offer a product with technological aspects,” said Pakseresht.
Investment in startups started growing in 2005. North America is the main contributor to this ecosystem, followed by the Asian nations of China and India.