Oman, Royal Dutch Shell invest $53 million in GlassPoint Solar

Glasspoint’s solar steam generators can reduce an oilfield’s natural gas consumption by up to 80% — reason enough for Oman’s State General Reserve Fund (SGRF) and Royal Dutch Shell to invest $53 million in the California-based company.

The investment, which also included contributions from Glasspoint’s existing investors, will accelerate deployment of solar steam generators on the field.

Solar-powered oil production will save valuable gas resources that can be used to establish new industries and create new jobs for Omanis,” said Glasspoint President and CEO Rod MacGregor. He addied that the company is looking to develop "a world-class solar manufacturing capability and local supply chain" in Oman.

The chief exec pointed out that the funding from the Omani state fund and from Shell Technology Ventures validated solar enhanced oil recovery (EOR) technology and its role in driving economic growth.

Geert van de Wouw, managing director of Shell Technology Ventures, added, "GlassPoint’s solar steam generators are a truly innovative response to the challenge society faces to deliver energy in a sustainable way to meet rising demand. Together with Petroleum Development Oman (PDO), we are pleased to support technology innovation while bringing tangible benefits to Oman, a country with which we have an 80-year partnership."

GlassPoint’s pilot project in southern Oman with PDO has been operating successfully since late 2012 and continues to exceed contracted performance targets. The system, which generates an average of 50 tons of steam daily, serves as an operational baseline for large-scale projects in Oman and throughout the region.

Unlike solar panels that generate electricity, GlassPoint’s enclosed trough technology uses large, curved mirrors to concentrate sunlight on a boiler tube containing water. The concentrated energy boils the water to produce high-pressured steam, which is injected into an oil reservoir to loosen deposits and boost production. GlassPoint encloses the system inside a glasshouse structure to protect the solar collectors from the wind, sand and dust common in Middle Eastern oilfields. An automated washing system cleans the glasshouse to maintain performance in the dusty desert environment and reduce operation and maintenance costs.

SGRF Executive President Abdulsalam Al Murshidi said the investment, the fund’s first in alternative energy, was in line with the fund’s mission. “Our portfolio is designed to secure the future prosperity of Oman and its people by creating a diversified asset base to complement the country’s wealth of natural resources. GlassPoint’s technology can provide a multitude of tangible economic benefits to Oman and any country with abundant sunshine and a scarcity of alternative fuel for thermal EOR."

Al Murshidi added that the investment would have “profound implications on the economy beyond the direct impact it brings to the oil and gas sector” by diverting natural gas from oil production to power new industries.

The investment in GlassPoint also supports the country’s goals to diversify its economy. According to the National Centre of Statistics and Information (NCSI), total natural gas consumption in Oman rose to 39,114 million cubic meters in 2013. Gas used at Oman’s oil fields accounted for 9,047 million cubic meters, accounting for more than 23% of the country’s total gas use. The figures will continue to increase as EOR projects grow to contribute nearly a third of the country’s crude oil production in the next five years. At the same time, more gas will be needed to meet future demand for power generation, desalination, industrial development and liquid natural gas exports.

As new GlassPoint investors, SGRF and Shell will hold seats on the company’s board of directors. Hisham Al-Sheedi, SGRF deputy investment manager, and Peter de Wit, a Shell nominated independent director, will rep the Omani fund and the oil giant, respectively. Glasspoint’s existing investors, Chrysalix Energy Venture Capital, Nth Power and RockPort Capital, also contributed to the $53 million funding round.