And how can they now conquer the market for oil refining technologies?

Associate Professor of the Department of Petrochemistry at the St. Petersburg Institute of Technology Dmitry Sibarov spent an hour talking to the vice-president of the Indian Oil oil company Sunil Rajagopal about the advantages of producing gasoline using the technology invented by his students Oleg Parputs and Oleg Giyazov. The Indian looked satisfied, and the two Olegs were rubbing their hands: the likelihood that Indian Oil would sign a contract with their startup Global RRT was growing before our eyes.

The St. Petersburg residents completed the first levels of the quest “sell the technology to an Indian state corporation” themselves, and saved the gray-bearded “professor” for the decisive blow. His speech inspired Indian Oil managers, who have respect for the luminaries of science. Until this day, oil companies agreed to buy the technology of Parputs and Giyazov, but with one condition - that the know-how be tested by someone else's oil refinery. Now, after Sibarov’s speech, the partners were close to entering the oil refining technology market, having signed the first contract - with Indian Oil.

Giyazov (23 years old) and Parputs (33 years old) met at the St. Petersburg company Lenkor Engineering, which since 2008 has been consulting oil companies and designing refineries for Chinese and Korean clients. A couple of years earlier, Parputz defended his PhD in chemistry and put forward the hypothesis that the conversion of light gasoline fractions could take place in one column, and not in several (as in the traditional production scheme of modern refineries). A similar approach is used in the pharmaceutical industry and in chemistry (production of rubbers, plastics, bags), but Parputz was the first to introduce it at refineries. Calculations showed that this was possible, and in the spring of 2011 the partners set out to find funds for the experiment.

The market for catalytic process technologies, where the startup was planning to break into, is not friendly to newcomers. For several decades, this $3.1 billion sector (Markets & Markets estimate) has been controlled by two major players - the French Axens and the American UOP (a division of Honeywell). Their clients, oil refineries, are conservative, explains Albert Sultanov, technical director of the consulting company Red Mountain Energy. A typical story for this market, according to Sultanov, occurred when UOP spent 15 years testing Canmet technology (a variation of hydrocracking) and still could not sell a single unit.

This fact did not frighten Parputs and Giyazov. They beat out several funds investing in Russian enterprises. Global RRT was rejected by everyone except Forsight Ventures (founders John Zhdanovsky, Andrei Kazakov, Val Yerdes and Vladislav Sviblov), who agreed as an exception - previously they only financed Internet services - to invest $100,000. Six months later, Parputs proved that the technology can work for factories Several articles by Western researchers have been published in the journal Chemical Engineering and Processing and other scientific publications confirming the viability of his proposal.

The partners needed their own research center, where they could build the column in the form in which it is installed at the refinery. Having the results of applied research, it was easier to raise investments, and soon Global RRT received $1.5 million from the Bright Capital fund, in which Mikhail Abyzov was the anchor investor. After two rounds, control of the company remained with the founders. With the money received, the partners equipped a laboratory in one of the buildings of the St. Petersburg Institute of Technology and hired several oil students to conduct research.

Then Parputs and Giyazov became concerned with sales. Their technology was suitable for factories that are restructuring production to meet new environmental requirements for gasoline. As Markets and Markets notes, conversion costs worldwide will amount to more than $1 billion. Global RRT targeted this tidbit and selected three markets where standards are already changing (USA) or will change (Russia, India).

Since 2013, gasoline from Russian refineries must comply with the Euro-4 standard. Oil workers, according to Parputs and Giyazov, have complacently accepted the Global RRT technology, which, according to Gazprom Neft Vice President Sergei Vakulenko, allows them to save 2-3 rubles per liter of gasoline. But there was no deal. According to Giyazov, the oil workers first wanted to see what the first buyer of the technology would get in an industrial environment.

Then Parputs and Giyazov switched to the USA and India and first of all went to recruit country managers. Through fourth hands, they managed to show the presentation to former TNK-BP vice president Douglas Harris, who, after leaving BP, founded his own company and advised refineries on the choice of technological solutions. Harris read it from his laptop while on a business trip to Africa and changed his route from Los Angeles to Moscow. “He immediately told us: “If these numbers are true, then that’s cool!” - recalls Parputs.

“Doug became our shareholder more out of interest,” admits Giyazov. “He is a business machine, a corporate tank, capable of pushing through opponents in negotiations.” Harris agreed to the option to become CEO of Global RRT, but was unable to push through the sale of the “single column” technology to American refineries.

But in India, a local representative was found quite quickly and acted more efficiently. After a Skype interview, Global RRT hired Adarsh Tripathi, an engineering company employee who was pursuing an MBA at Calcutta University. “I was impressed by the technology and realized that this could be a real breakthrough,” Tripathi told Forbes.

However, the startupers had no idea that the “real breakthrough” in their business would come thanks to Tripathi himself. He managed (according to the founders of Global RRT, using family connections) to arrange a meeting with the director of science of the largest oil company in India, Indian Oil (annual refining volume of 45 million tons), Sanjar Kumar Ray. The partners wanted to involve Harris and present the company as American, but Tripathi protested. It turned out that almost all the technologies used by the local oil industry are imported from the United States, and state-owned Indian Oil seeks to diversify geopolitical risks.

The negotiations ended successfully, and Vice President Rajagopal Sunil arranged a meeting for the St. Petersburg residents. Then Parputs sent his scientific opponent Sibarov to fly to India for a day and convincingly talk about the new technology. The trick worked - Indian Oil purchased a license to use the technology and accompanying documentation from Global RRT for $6 million.

After signing the contract and speaking at industry exhibitions, mini-refinery owners who wanted to master the production of Euro-4 gasoline began to show interest in Global RRT. “Our refinery with a processing capacity of 2.5 million tons per year is interested in this technology if the pilot project shows that with the declared savings on structural materials (two or three processes occur in one column), the technological process is proceeding normally,” Roman Skachkov told Forbes, Deputy Director of the Oil Technology Center of the Yug Rusi Company.

Two St. Petersburg chemists made gasoline cheaper. How did they do it?