The New Industry Ventures fund - a venture fund jointly owned by Gazprom Neft, Gazprombank, the Russian Venture Company (RVC) and VEB Ventures - has launched its first investment project directed at developing multi-bore well finishing technologies.

The “New Industry” fund has invested in ADL Completions, which specialises in the development and production of technological solutions in multilateral and multi-bore well completion. This innovative start-up has secured all necessary approvals, including from the Fund’s independent Technical Advisory and Investment Committees. Total investment stands at RUB100 million.

This fund-supported project is directed at developing multilateral completion technologies, allowing “side-tracks” to be built onto existing wells, maintaining the flow-rate into the main well. Having completed research and development and pilot testing a prototype system is now in place, ready for batch production.

Support from the New Industry fund will allow the developer to continue fine-tuning its multilateral completion technologies including intelligent completion and finishing under multi-stage fracking, allowing it to address more technically complex tasks, as well as increasing production capacity.

Vadim Yakovlev, Deputy CEO for Exploration and Production, Gazprom Neft commented:
"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. Undertaking the New Industry fund’s first 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".

Tatiana Morozova, CEO, New Industry commented:
"Multilateral completion will, over the next few years, move from being a premium to an economically viable and sought-after product for subsoil users".

Alexander Stepanov, Deputy Chairman of the Management Board, Gazprombank commented:
"Given the professionalism of the ADL team, the demand for these kinds of localised technologies, and the outlook for the company’s development, the b>ank and other members of the fund had full consensus on this first transaction - which, of course, is always the most responsible way to go. We hope Gazprombank’s experience, and that of our New Industry partners, will help ADL Completions strengthen its position in the market".

Alexey Basov, Deputy General Director - Investment Director, RVC commented:
"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. The ‘New Industry’ venture fund was established to support innovative companies and start-ups developing breakthrough technologies in the oil and gas industry. ADL Completions’ high-tech solutions have proved their effectiveness, successfully passing pilot testing at major Russian oil companies’ facilities. ADL Completions’ developments are highly competitive and will be in considerable demand both in Russia, and abroad".

Veronika Fidler, Chief Investment Officer, VEB Ventures commented:
"We are delighted that the fund has moved quickly into its investment phase. The transaction with ADL Completions is, without a doubt, very interesting both in terms of the product’s technology, and the demand for this, as well as in the quality of the partners who have now joined us in the capitalisation table. We expect 2020 to be a productive and dynamic year for the fund".

Background

The Russian Venture Company (RVC JSC) is a state fund of funds and a development institution in the Russian venture capital market. The main objectives of the RVC are to stimulate the development of the private venture investment industry in Russia and take on the role of project office for the National Technology Initiative (NTI). The RVC’s authorised capital amounts to more than RUB 30 billion. This is owned in full by the Russian Federation, represented by the Russian Federal Agency for State Property (Rosimushchestvo). The RVC now has 29 funds with a total value of RUB64.4 billion (of which RVC’s share is RUB37.3 billion). The RVC currently has funds in 180 portfolio companies. Total approved investments stand at RUB15.9 billion.

VEB Ventures (formerly VEB Innovations) is a company of the VEB.RF group, created to support high-tech projects through direct transactions and venture capital fund management. Among the priorities of VEB Ventures are financing promising companies using their own funds, private and public funds, as well as assisting Russian startups in entering international markets. The company offers projects not only venture capital investments, but also operational management support tools, as well as access to financial products of VEB.RF Group companies. This allows the company to formulate support schemes for Russian innovative companies taking into account their individual needs, including facilitating access to international markets.

ADL Completions is a start-up established in 2017 specifically to monetise developments in well finishing.

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