University venture set to revolutionise oil industry

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The Independent Online

Scotland's biggest-ever university spin-off business could generate more than half a billion pounds within 10 years with a technique that could revolutionise the North Sea oil industry.

A team of researchers from Edinburgh's School of GeoSciences has raised more than £7.4m in a funding round led by Scottish Equity Partners and the Norwegian investment funds Energy Ventures and HitecVision to form MTEM. The company was created to utilise new technology that could potentially save the oil industry billions of pounds a year, which are currently wasted on drilling dry wells.

MTEM (multi-transient electromagnetic) technology, developed at the University of Edinburgh, measures electrical resistance data from seismic explosions to determine whether deep underground reservoirs contain oil or gas before drilling, and can also be used to find hidden oil in mature producing fields. It is estimated that in the UK sector of the North Sea alone, more than one billion barrels of additional oil could be located and produced using this technology.

Leon Walker, the chief executive of MTEM, who joined the company after holding a variety of senior management positions at Schlumberger, said: "The economic impact of this technology has the potential to extend far beyond simply the value of the oil produced. By identifying new pockets of oil and gas, MTEM could extend the life of many North Sea fields, increasing recovery rates also from the known reservoirs."

It is also hoped that the company will create hundreds of hi-tech jobs in Scotland. David Sneddon, the director of Scottish Equity Partners' energy-related technologies team, said: "The potential market for this technology is about £500m a year."