Head of Chevron Technology Ventures on the Realities of Investing Amid a Pandemic
Barbara Burger says the key interest areas for the supermajor’s portfolio of startup investments remains unchanged despite a new industry downturn. However, the environment is tighter and the way in which deals are made has already seen notable change.
Chevron Technology Ventures (CTV) has been involved in the emerging technology space for more than 20 years, making it the largest and most experienced corporate investment arm in the oil and gas business.
But like every other organization in the industry today, it is facing new realities as a result of a global pandemic that is suppressing energy demand and forcing key business operations to be done remotely.
Barbara Burger, the president of CTV, offered fresh perspectives in an interview on SPE Live on how the pandemic and the resulting industry downturn has impacted the industry’s startup ecosystem, which she emphasized remains “vibrant” and “needed.”
Along these lines, Burger said the fundamentals of CTV’s investing philosophy have not changed, nor its key interest areas. New technologies that can bring clear value to Chevron by improving its understanding of the subsurface, drive efficiencies in drilling, or ensure asset integrity all have a chance of earning a coveted spot within the supermajor’s investment portfolio.
However, the sudden southward movement of market conditions has raised the bar on which startups will receive new funding. “We’re having to prioritize more, which means by definition some folks don’t make the list,” said Burger, who summed up that the impact of the pandemic and ensuing downturn “has not been a positive message” for the startup community.
As activity levels drop across the board, Burger said downhole and hardware technologies will have fewer opportunities for trials, at least in the short term. And while CTV and most of the industry’s other venture groups remain active in their pursuit of new companies, she said some have curtailed their activity.
For the companies already in CTV’s basket of investments, the pandemic spurred each of them to reassess their operations and business plans in preparation for a tighter marketplace. Burger added that a number of the youngest technology developers still courting venture groups for investments have adapted to the situation by lowering their valuations.
“That’s always good as an investor,” she quipped before noting that the new normal represents a mixed bag for the funding side of the equation. “We’re having to do due diligence and our early engagement with startups in a different way,” she said. “We always want to go and see them—kind of see what’s there and kick the tires.” But for now, because of the need for social distancing and travel restrictions, all of those highly valued meet and greets must be done virtually.
While the intimacy of face-to-face meetings cannot be replaced by video conferences, Burger shared the silver lining is that the capability of today’s networking technology has allowed CTV’s team of analysts and investors to complete more introductory meetings with new prospects than they would have under normal circumstances.
Similar to its commitment to keep building its upstream and downstream investment portfolio, CTV remains undeterred in its pursuit of technologies that can lower emissions or provide entry into other forms of energy generation—a refrain echoed by most of the international majors in recent months.
“We know that the energy mix is going to be more diverse as we go forward,” said Burger as she cited various reports that estimate oil and gas will make up only about 50% of the world’s primary energy demand by 2040.
To stake a claim within the other half, Chevron established a $100-million “Future Energy Fund” in 2018. Today, that fund includes a growing number of investments in hydrogen generation innovations, clean heating solutions, mobility technologies, as well as innovations in the carbon capture and reuse space.
Some of these new innovations have direct applications to Chevron’s operations which helps put them on the track for internal trials. In other cases, there is no direct link to the business, “but we see them as important in the energy system of the future and we want to make sure we understand what it takes to be successful,” said Burger.
Just as its expansion into new energy moves forward despite the tough environment, Chevron will also continue to lean into the industry’s digital revolution. Burger noted that opportunities for advanced software are woven throughout its business interests—including in the aforementioned new energy sector.
The accelerated drive toward digital technologies is to a large extent a byproduct of the industry’s last downturn, less than 5 years in the rearview mirror. To that point, Burger reminded that it remains early days for many of the digital companies in the CTV portfolio.
“Transformational capabilities are being identified but its not overnight that you can actually implement these and implement them at scale,” she said, adding, “I think that’s the next inning.”
For more of Burger’s insights on CTV and other startup trends watch the full interview here.
Barbara Burger is the president of Chevron Technology Ventures where she has a long history as a business leader holding positions in the US and internationally. She is recognized, globally, for her commitment to energy innovation and the energy transition, serving MIT’s Energy Initiative Governing Board, the National Renewable Energy Laboratory External Advisory Board and as a frequent speaker at CERA Week, European Venture Faire and other industry conferences. Burger has an undergraduate degree from the University of Rochester. She also holds a doctoral degree in chemistry from the California Institute of Technology where she’s established endowments to support female graduate chemistry students pursuing careers beyond academia.