In the forum held in Shanghai on Sep.17, Hao Duan, CEO of ZFA Technologies Inc. has won bursts of applause by his speech. The topic of his speech is a little special, which is “Yan’an spirit in entrepreneurial company”. Starting his career in old revolutionary area - Yan’an, this young man has already expanded business to whole China even the world.
Environmental protection is highly valued during recent years, and Hao Duan is gradually known to the public in this trend. Graduated from Economic Department in University of Houston, and being greatly influenced by his parents and the environment nearby, he was obsessed with biology ever since he was a little boy. When living in China in his childhood, he always did research on the mushroom cultured by the uncles and aunts nearby in Institute of Biology in Chinese Academy of Science. And he was confused by the question why they cultured mushroom for years, that’s where his interest in biology starts.
“Biotechnology could provide new biological varieties or new products for human beings, which will have tremendous influence on the politics, economics, life etc, while providing beautiful future to solve the problems of resources, environment and human health etc. in the world”, Hao Duan says that he hopes to regard biology as his lifelong career, and the reason why he studies economics is also to better promote biotechnology.
Hao Duan has persisted in this field for nearly ten years from technology research and development in the early stage to the later product promotion. At present, he has ushered in the spring of industrialization
There is an autonomous research and development technology in Hao Duan’s company- BERO biosurfactant, mainly used in the tertiary oil recovery to enhance oil recovery by biological enzyme technology. Not only could it enhance oil recovery rate, but also has higher economic benefit. What’s more valuable, it’s totally environmental friendly compared with the widely used chemical flooding.
“China is not a lean oil country, then how to release the oil if we cannot explore it. And the previous investment would in vain if it could not release oil using chemical methods, and pollution occurs even if it released. But the biotechnology could solve these problems. ” When talking about the technology, it just like talking about his own kid with pride in his face.
Actually, as the main component of BERO Biosurfactant is enzyme – non-active protein, it can adapt to different formation and wells without influence by mineralization of water, pressure and temperature. Besides, it could apply to clean oil layer in wells to enhance recovery of crude oil. While the characteristics of enzyme determine its facilitating a certain reaction without participating in the reaction. So it’s totally environmental friendly.
After working for many years in America, Hao Duan chose to bring his invention- BERO Biosurfactant to China for entrepreneurship in 2012. Before that he has done the pilot experiments in the major oilfields in China and abroad for 8 years and registered ZFA Technologies Inc. after key breakthrough achieved in his technology.
“Through testing for a long period of time, we have found more optimized technical scheme, a better proportion and model. And we invent this scheme, master the law, keep improving it by continuous accumulation of experience according to our understanding.” says by Hao Duan. Biological oil recovery was not promoted in large scale due to high cot and unstable effect. MEOR( microbial enhanced oil recovery) is widely used in China, which has complicated operation, many variable and uncontrollable factor, and the fomula of which is under grope, and it’s custom-made rather than popular to each one, being effective to this well, not necessarily effective to that one.
“The technology is still under exploring. And it takes much capital investment, research and development investment, time, accumulation of experience, and luck to break technical barriers. The core is luck and to master its law.”Hao Duan is quite sentimental when recalling the past.
The data has shown that the success rate of BERO biosurfactant is more than 90%, with average annual increased production above 1000 bbls, average annual production increase rate 120%, and the effective time lasting for more than 12 months.
“BERO biosurfactant is the third era of biotechnology, and there is no similar product with the same index till now. We have our own uniqueness, and our leading primacy could be guaranteed by unique stimulation process and unique ingredient research and developed by unique fermentation principle. ”Hao Duan says that he will face the domestic market competition as well as market competition in the world.
Before establishing ZFA Technologies Inc., Hao Duan is the vice president of LUCA International Energy Group in America with the annual income of $120,000. He could live a life of ease, and working in the mature company is much easier than entrepreneurship. However, he insisted on coming back to China to start his own business.
From vice president to the CEO of entrepreneurial firm, Hao Duan changed a lot in mentality. Although experienced glory and success, he was filled with joy in his heart because of the entrepreneurship experience. Even if facing with difficulty and pressure, he could convert it to motivation and willing to accept challenge.
During the primary research and development stage of more than 8 years, Hao Duan had uneasy entrepreneurial path. He often shuttles at the big oilfield at home and abroad and overcome the difficulty in adverse environment and high altitude reaction，which is not the hardest in his opinion.
Engaged in microbial enhanced oil recovery is a “thankless work” Hao Duan says frankly, but he is willing to persist in it. And he says that he wants to create benefit for the customers and the society as the cost of treatment of oil pollution is quite high and the effect is not so good.
Speaking of challenge, Hao Duan mentioned sales firstly. When established Zefang in January last year, he has suffered from a lot of cold-shoulder treatment in order to promote BERO biosurfactant as the recognition degree of environmental protection cannot compared with that of today.
Hao Duan says that China's oil industry is monopolized by a few giant companies currently. They get used to geological exploration, pay attention to explore a new well while stimulation technology is not a top priority for them. Compared with the relatively traditional secondary oil recovery, biological oil recovery is a new field and the conservative oil companies do not have the motivation to try.
What’s more important, during the process of promotion, the probation period is 3-6 months in China, but the technology needs about 1 year to take into effect, thus no company is willing to break the convention. Although feeling desperate after being refused for many times, he does not discourage and he believes that it could be accepted soon or later.
“If developing with low cost in traditional way, the company could get the economic profit. However, the investment in environmental protection in the future must higher than its economic profit.”Hao Duan said. Take the regulation of Love River in Gaoxiong City, Taiwan as example, Love River is the common memory of most people in Gaoxiong City. However, it brings many serious environmental pollution as well as public health problems behind the prosperous economic development. Then Love River cannot absorb large variety of pollutants any more. The dirty black river finally looked like ink smelly river, totally lost the function of recreation and fishery. The mayor in Gaoxiong City said that the profit in earlier stage basically invested into the regulation of Love River later.
So in the previous stage of technical communication with customers, Hao Duan points out clearly that the biggest advantage of ZFA technologies is friendly to the environment, and it will not pollute the environment on the premise of improving energy efficiency to achieve green environmental protection and sustainable development.
The reason why he is so adamant is that he sees the technology’s friendliness to the environment. Hao Duan says that we could not seek short-time interests with the traditional destructive exploit method. And we need to be more high-efficiency, safe, environment friendly, circular and sustainable development to achieve green environmental protection.
Hao Duan is quite confident in promoting his technology in China. Because environmental protection has always been a top priority in China and China's support for environmental protection is beyond that of other countries, such as the Environmental Protection Bureau has the one ticket veto right in terms of project approval.
Hao Duan deeply felt the unease of startup. And he says that his everlasting persistence originated from love, “I hope the social value ZFA creates is much greater than the money I earn. And I feel quite steadfast while working because of trusting its value. ”If promoting the advanced technology of tertiary oil recovery in China, then supply-demand imbalance can be broken in oil industry.
Hao Duan talks about “patriotism” with smile in his face. And he says “patriotism is quite an empty word for most people. But it’s natural for us to have this feeling who staying too long abroad. The reason why I choose to start up is that I hope to make my technology known and popularly used by the public. And I also hope that my technology could bring more social value to our country. Only in this way, could we walk along this road and obtain peace in our heart no matter happy or painful.”
The economics is quite useful to help him turn his attention to abroad. Many wells in America are operated by small and medium-sized oil companies, and situation is quite common that there are many wells while the production per well is lower. So they are quite sensitive to the cost, and environmental protection in America is quite strict, which lead to their less use or no use of chemical products.
And Hao Duan’s “No Cure No Pay” helps him open the market in America. As BERO biosurfactant is fermented by microorganism, the stimulation process is relatively complex. So it does not have the advantage in price and its cost became the market compared with chemical products. Hao Duan then came up with an idea to start with the production increase effect. And the customers do not need to pay if there is no effect. And it could enhance production of the wells on the basis of not spending any money, equipment and personnel.
Hao Duan also says that “my promotion in the market abroad is what happens without extra effort and there are many clients. In addition, the demand of domestic market is greater than that of abroad. And the formation decides that there are lots of low-production wells in China. And the situation is even worse. But the difficulty of the promotion in China is greater.”
But nowadays, as environmental protection is highly valued in China plus with the successful promotion experience in America, Hao Duan feels “like a fish in water” in domestic market.
Hao Duan’s technology is much more highly accepted by oil industry. Hao Duan mentions that the popularity is not as wide as chemical product as the cost of biological product is relatively higher in the past. And the oil industry pays much more attention on environmental protection and they also pay much more attention on it.
ZFA Technologies Inc. has conducted wide technical testing and stimulation cooperation with Daqing Oilfield, Jilin Oilfield, Karamay oilfield, Nanyang Oilfield, Zhongyuan Oilfield, Qinghai Oilfield, Yanchang Oilfield etc in China, and has obtained obvious economic benefit and social benefit.
The difficulty hardens himself as well as helping him achieve his goal. Hao Duan says:”Difficulty teaches me a lot and forces me to overcome it. ”
Hao Duan thinks that biotechnology has a wide application as well as bright prospect, and it may become one of China’s pillar industries. And he believes that oil companies would choose more safe and green technology as this industry pays much more attention on environmental protection.