The Department of Justice (DOJ) Friday said it will not oppose on antitrust grounds a proposal by a group of oil and natural gas producers, oilfield service companies and the University of Texas to engage in joint research and development involving the application of nanotechnology to the exploration and production of oil and gas.

The goal of the joint venture, called the Advanced Energy Consortium (AEC), is to develop subsurface nanosensors that can be injected into oil and natural gas well bores. Because of their very small size, the sensors would migrate out of the well bores and into the pores of surrounding geological structure to collect data about the physical characteristics of hydrocarbon reservoirs. The data collected potentially could clear the way for more efficient exploitation of hydrocarbon resources, the DOJ said.

The department stated its position in a business review letter to AEC. The joint venture, in seeking the review letter, asked DOJ’s Antitrust Division to outline its enforcement intentions with respect to the creation and operation of AEC.

AEC “appears to be structured so that its proposed business conduct will not create any risks to competition,” wrote Assistant Attorney General Thomas O. Barnett, who heads up DOJ’s Antitrust Division, in the letter to AEC. “To the extent that the AEC engages in research efforts that would not be undertaken by individual firms, the joint venture may have the pro-competitive effect of promoting innovation.”

AEC’s current members are BP America Inc., ConocoPhillips Co., Marathon Oil Co., Occidental Oil and Gas Corp., Shell International E&P Inc., Schlumberger Technology Corp. and Halliburton Energy Services Inc., with management provided by the University of Texas at Austin, TX.

Under the AEC proposal, the oil and gas industry members each will contribute to funding the research, which will be carried out by the university, according to the DOJ. The university will own all inventions resulting from the research. Each industry member that contributes to the development of any invention will receive a royalty-free, nonexclusive, irrevocable, worldwide perpetual license to use the invention for noncommercial internal purposes and will also have the independent right to make, use and sell any patented inventions, subject to the payment of patenting costs, the department said.

All AEC members will retain the right to engage in independent research and development and to obtain intellectual property rights relating to the research, the DOJ noted.

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