San Diego Business Journal

Verenium Expands Oilfield Services Unit With New Enzyme Product for Cleanup

Tuesday, January 17, 2012

Industrial biotech company Verenium Corp. has developed an environmentally friendly alternative to traditional chemicals that oil-drilling companies use to break down the “filter cake” that builds up along the sides of wells.

For San Diego-based Verenium, its new offering — Vereflow — marks a major expansion of its oilfield services business unit. Until now, that unit has been comprised of just a single product, Pyrolase. Both Vereflow and Pyrolase are enzymes that help with toxic cleanup.

Verenium will be marketing the product to oilfield giants as such as Schlumberger, Halliburton Co. and Baker Hughes Inc., all of which have U.S. operations based out of Houston.

“When we looked across our business, we identified this as a channel where we could be selling more products,” said James Levine, Verenium’s president and CEO. “Vereflow is going to go toward the drilling application, but the end customer tends to be the same (as for Pyrolase).”

Verenium estimates the addressable global market for Vereflow in the United States to be approximately $20 million per year, just a fraction of the $250 million market for Pyroloase, which serves broader applications, Levine said.

“We’re a $60 million company,” he said. “We are looking to be opportunistic, and we’re looking to be scrappy.”

Levine said the company is manufacturing Vereflow in Mexico City under its agreement with Fermic S.A. de C.V.

“The idea is to replace harsh chemicals with safe alternatives,” Levine said. He said the company is in supply agreement discussions with one of the top three oil-drilling players, named above.

Filter cake is the gritty substance that builds up at the opening of the well bore during the oil-drilling process. “Once you’re done drilling, you want to remove that filter cake,” Levine said. “Traditionally, one might use acids, but acids can be damaging to steel equipment that’s inside the well. We found that enzymes can also be effective in removing that cake.”

— Kelly Quigley