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)
Recommended Reading
API Gulf Coast Head Touts Global Emissions Benefits of US LNG
2024-04-01 - The U.S. and Louisiana have the ability to change global emissions through the export of LNG, although new applications have been frozen by the Biden administration.
ConocoPhillips CEO Ryan Lance Calls LNG Pause ‘Shortsighted’
2024-02-14 - ConocoPhillips chairman and CEO Ryan Lance called U.S. President Joe Biden’s recent decision to pause new applications for the export of American LNG “shortsighted in the short-term.”
CERAWeek: JERA CEO Touts Importance of US LNG Supply
2024-03-22 - JERA Co. Global CEO Yukio Kani said during CERAWeek by S&P Global that it was important to have a portfolio of diversified LNG supply sources, especially from the U.S.
White House Open to Ending LNG Export Pause in Push for Ukraine Aid, Sources Say
2024-04-02 - Reversing the pause could be tolerable to the White House in order to advance Ukraine aid, in part because the pause has no bearing on near-term LNG exports, the White House sources said.
Exclusive: Activists Sending 'Wrong Signal' on US LNG
2024-02-23 - Anne Bradbury, the CEO of the American Exploration & Production Council, says the Biden administration's pause on U.S. LNG export approvals sends a wrong message about the importance of LNG to the American economy and the climate, in this Hart Energy LIVE Exclusive interview.