In the first round of startup funding by state oil firms, petroleum ministry, led by Dharmendra Pradhan has launched a scheme with 10 oil and gas companies to offer a financial support for startups working on technological or business innovations that could solve some of oil industry’s problems.
Ten state oil firms have created a corpus of Rs 320 crore to support startups in the oil sector to be disbursed over a 3-year period.
The state oil firms have agreed to offer a financial support of Rs 44 crore to about 32 startups, signed preliminary pacts with startups, mostly affiliated with IITs, to fund their business proposition.
Indian Oil signed up with maximum 11 startups, promising to pump in a total of Rs 20 crore in their ventures. ONGC has agreed to fund five startups, GAIL and HPCL four each, Engineers India three, Oil India and Numaligarh Refinery two each and Bharat Petroleum just one startup. The funding commitment ranges from Rs 40 lakh to Rs 2.5 crore for a startup, reported ET.
Also Read: Mukesh Ambani’s RIL to invest $25 Mn in Israel-based startup incubator
The investment will not give state oil companies any equity stake in startups, which will treat the funds as a grant.
Pradhan, who has recently been elevated to cabinet rank and given additional charge of the Ministry of Skill Development and Entrepreneurship, said India could not afford to miss out on the ongoing Industrial Revolution 4.0 that signifies the changes being wrought by information technology.
“The people we are partnering today will establish new benchmarks for India. We have to go for out of the box thinking and disruptive frameworks,” said Pradhan at the event.
This programme is based on the premise that “oil and gas companies have the required technical acumen and financial strength to act as venture capitalists to talented entrepreneurs who wish to build businesses,” he added.
Some of the innovative projects that signed the partnership with the ministry include for developing multiuse fuel from agri-waste, remotely operated vehicles for underwater inspections, converting waste plastic to high-value fuels, electronic leak detector for LPG and solar cookers.
Last week, Mining baron Anil Agarwal of Vedanta, the world’s sixth largest diversified mineral resource conglomerate, had announced to launch a venture capital fund worth $1 billion to help young Indian entrepreneurs in the natural resources space.
