Source: Forbes

Australia is known for its plethoric natural resources. The abundant resource sector has long been a major contributor to the country’s economy. However, despite $200 billion of capital investments over the past decade, industries are experiencing a down turn in activity compared to the prosperous period of the mining boom. The oil sector, particularly, is showing a climactic decline due to a combination of exhausting mature oil fields and a lack of innovation to improve exploratory processes.
In a period of burgeoning optimism for Australian tech, this disequilibrium represents an opportunity for local startups to capitalize.
This demand is timely because there’s been an under-representation of technology in the industry. However recently, one company has begun executing at the intersection of innovation and oil exploration, which works to validate a direction for Australian startups to explore.
Petro River Oil (PTRC) is an “independent energy company focused on the exploration and development of conventional oil and gas assets.” The company uses 3D Seismic technology, innovation that allows it to identify under-tapped oil wells, as a means to improve the efficiency of exploratory projects.
The technology works by sending shockwaves through land formations and measuring the consequent seismic waves that reverberate off sub formations in the Earth. The results signal to exploratory teams which wells have sufficient oil reserves to justify drilling.
For Australian startups, this presents an opportunity to improve inefficiencies in the local oil industry. An industry, which until recently, had been positioned to drive the country’s economic growth for the long term.
In my recent conversation with Scot Cohen, CEO of Petro River Oil, he described how the technology applied to the process of oil exploration.
“Petro uses recent advancement in 3-D seismic technology to locate overlooked reserves and lower exploration risks… To simplify 3D Seismic, think of an MRI confirming what the X-ray shows. In essence, the 3-D imagines the reservoir revealing the structures below. Since we are entering older fields the cutting edge technology confirms and unlocks wells drilled as much as 50 years ago.”
This, again, has important implications for Australia because the country’s local reserves appear under-utilized.
The majority of Australia’s oil exploration currently occurs off-shore. This means on-shore reserves are largely untapped. The hesitancy to explore locally can be attributed to the inherent risk involved in identifying profitable oil reserves. The traditional “Ready – Aim – Fire approach to [oil] discovery” can be costly and time inefficient, which signals a demand for an alternative.

3D Seismic technology identifies under-tapped oil wells to improve the efficiency of exploratory projects.
According to Cohen, the potential of this technology is positioned as such an alternative.
“The recent advancement of 3-D Seismic technology could make onshore fields more attractive for Australian companies because of the proven mitigation of risk.”
This is telling to note.
The willingness for Australian startups to leverage this trend is driven by more than just market opportunities. It’s underpinned by the psychology of risk. Founders are predisposed to avoid risk because it represents the possibility of loss — time, finances, energy. Losses of any form are psychologically unattractive. They are experienced by the brain in the same way as physical pain and thus there is an incentive to avoid them.
As such, startups and companies alike tend to distance themselves from decisions that are perceived as too high risk.
However, when there is validation it reduces perceived risk. The yield of exploratory ventures using 3D Seismic validates the technology. The oil sector’s contribution to Australia’s overall GDP validates the market. The untapped oil reserves in Australia validates the opportunity.
This collective validation works to encourage local startups to see this technology as an opportunity.
Cohen echoed this sentiment by describing it as timely given the continual demand for oil in the foreseeable future.
“In 2017 and 2018 this could prove to be an opportunity to utilize 3-D Seismic technology to explore onshore fields in a manner that avoids the costly and often environmentally detrimental old-school process of massive fracking to accelerate oil discovery and production… Employing the technology along with experienced interpreters of the resulting data could provide the boost needed for startups as the demand for oil continues to grow.”
The mining boom in Australia pre-dated the current startup boom. Despite the dissipation of the former, the latter presents an opportunity to leverage Australia’s access to natural minerals. With the acceleration of technology, it seems timely to capitalize on the innovation that allows the country to benefit from its fortunate allocation of resources. Australian companies, by their very geography, have the advantage of proximity to a proven resource sector. 3D Seismic technology is an example of a new frontier that is uniquely tailored for the Australian market.
This appears the arbitrage for local startups to explore.
Disclaimer: OG Market Report has been compensated in the past, and expects to be compensated in the future, by Petro River Oil Corp. for investor relations services. OG Market Report reserves the right to be compensated for investor relations services by companies mentioned in this article. OG Market Report is not liable for any investment decisions by its readers or subscribers. OG Market Report is NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security.