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Roughly a decade ago, oil and gas majors began launching corporate venture funds dedicated to nudging innovation in clean energy.
While the original goal was to outsource R&D efforts, achieve operational efficiencies and improve profitability, these venture funds have helped oil majors navigate the challenges of a broader energy transition and achieve ESG goals, Samuel Dibble, partner at Baker Botts, told Hart Energy.
“Corporate venture funds are a hot topic…the amount of money and commitments that larger corporations have made is quite staggering,” he said.
With incentives and policies driving a greener business agenda, Dibble explained how corporates’ VC arms are increasingly placing their bets on alternative energy including solar, wind, biomass and nuclear, carbon capture and other environmentally friendly technologies.
For instance, Occidental-backed Oxy Low Carbon Venture has partnered with tech companies to build a direct-air capture facility in the Permian Basin. Additionally, both Shell Ventures and Chevron Technology Ventures have backed Veros Systems, which makes data and analytics software for predictive monitoring of industrial asset reliability and production efficiency.
“Everyone in the oil and gas industry is looking to diversify…They have all their eggs in one basket and the basket is under fire from investors and climate activists for pollution, global warming and a long list of climate issues,” Dibble noted.
“What’s surprising is the extent to which capital has been devoted to these funds,” he continued.
“Since they were first brought online roughly a decade ago, the amount of money committed to them doubled in the first five years and then it took another couple of years ago to double again, which has doubled again since the pandemic—a trend that is expected to continue accelerating," he said.
Jump to a topic:
- CVCs and energy transition (0:32)
- How cleantech investment is tied to ESG (4:00)
- Current legislation (8:25)
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