Traditional drilling techniques can leave oil trapped in reservoirs, and one startup has built a business model around recovering what’s left behind.
“It’s a terrible waste of a natural resource,” says Glori Energy CEO Stuart Page. “The industry does all it can do to keep replacing the reserves that it has and keep providing for the inevitably increasing demand for oil in the world, but it leaves most of the oil it ever discovers behind.” Page estimates that as many as 2.4 trillion barrels of oil have been abandoned by companies drilling for oil.
Page says Glori Energy’s AERO system offers a solution by freeing up the trapped oil in a way that doesn’t take brute force or additional drilling.
“The oil is held within the parameters of the rock in the porosity, and we think about it as a macro problem to solve where really it’s a micro problem,” says Page. “These pore spaces are really, really small, and the only thing that really works is the bacteria.” Glori’s process causes the bacteria to grow and interact, which the company says has the effect of producing mobility in the oil reserves.
Glori launched in 2005. At the beginning of 2012, it raised $20 million in a Series C round co-led by Gentry Venture Partners and Advantage Capital Partners, in addition to Glori’s previous investors, such as Energy Technology Ventures and Kleiner Perkins Caufield & Byers. This brings Glori’s total funding to $56 million, according to Page.
However, the oil industry has been slow to recognize Glori’s technological innovation.
“Getting the oil industry to accept microbiology is probably more difficult than getting investors to see it,” says Page.
Persistence is crucial, he says, in gaining industry buy-in for a disruptive technology. The company is currently planning expansion to oil fields in countries like Brazil, Russia and China, in addition to the number of projects underway in the United States and Canada.
“Keep pushing and gradually the word spreads. Gradually people start to hear about what you’re doing and get more interested,” says Page.
In the fall of 2011, Glori filed for an IPO, which it eventually withdrew, citing current market conditions. According to Page, Glori’s anticipated revenue for 2013 is $4 million, more than double the company’s revenue the previous year.