Indian energy company launches $15m incubator
Oil and Natural Gas Corporation (ONGC), an energy sector supplier under the Indian government, has launched a INR1 billion ($15 million) venture fund to promote entrepreneurship in the struggling local fuel industry.
According to a statement, the vehicle known as ONGC Start-up will offer seed capital, mentoring, market linkage and follow-up support with an aim to increase the contribution of fresh implementable ideas in oil and gas. The initiative is expected to establish an oil and gas ecosystem with potential to generate technology-enabled business solutions.
The move represents part of the government's Startup India campaign, which is aimed at driving bank financing for early-stage companies while offering workshop and incubator services. The program will leverage a INR100 billion fund-of-funds and is expected to benefit from a broader policy shift mooted earlier this year including recommendations to facilitate venture investment.
ONGC is the largest producer of oil and gas in India, contributing around 70% of domestic production. The firm has a market capitalization of about $27 billion and has invested some INR700 billion since April 2014 in field development projects.
India is highly dependent on foreign crude as a result of domestic inefficiencies related to a lack of private producers versus state-owned companies. Plans to relieve pressure on the oil industry by constructing gas pipelines with neighboring countries have been complicated by regional border disputes.
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