21 July 2013

Oil & Gas Companies May Help Boost Water Technologies

An article recently published online states that oil and gas companies are investing more in water technologies because of the new techniques involved in oil and gas exploration. This could bode well for water and waste water treatment in general - as more investment means further advances in the technology, as well as theoretical cost reduction. In the recent water security course I attended at University of East Anglia the idea of water and environmental groups partnering with corporate interests came up strong. This idea is becoming more popular - as it should. The corporate interests are usually the ones pushing politicians to relax regulations on water resources. If there are stricter regulations, instead of corporations pushing to change this, they could partner with special interest groups to capitalize on responsible water resources use...

Too optimistic?

Please consider the article below.

“Hundreds of millions” set to be invested in water tech by oil & gas companies

Investment in water technology companies is set to soar as major oil and gas companies look to meet the growing challenges of water scarcity and regulations, according to new research.

A report produced by the London Environmental Investment Forum (LEIF), in association with Global Corporate Venturing, shows a growing interest in water technology from the oil and gas majors as they move into more scarce regions, expand into unconventional resources such as shale gas, and deal with new regulations regarding treatment of wastewater.
Leading corporations are establishing venture units, charged with finding new technologies to solve the company’s problems.
LEIF Chairman Tom Whitehouse, author of the report, said the motivation was simple.
“The oil and gas industry needs to reduce its water costs, get water to work more efficiently in extracting hydrocarbons and stay on the right side of the politics of water,” he said.
“For big energy, water venturing is not driven by the desire to diversify. It is directly related to the future success of their core business, the extraction of hydrocarbons.”
The report profiles many venture investors backed by, or linked to, large oil and gas corporations and their investment strategies in the coming years.
BP established its venture unit in 2006, but changed its name from BP Alternative Energy Ventures to BP Ventures in 2011 to reflect an evolution in strategy – BP is now making investments on behalf of its oil and gas operations as well as its alternative energy interests.
“While financial returns are important, our venturing business is driven by the need for technology access. So, that is what drives our investment strategy and style,” said Sandra Eager, BP Ventures Technology Manager.
She added: “Seven key areas have been identified. Recycling and reuse is top in terms of importance because regulation is only going to increase and become ever tighter … EOR [enhanced oil recovery] is equal top in importance, explaining our interest in desalination technologies.”
BP’s strategic interest in water typifies a wider trend. New venturing units set up over the last two years by ConocoPhillips, Statoil, Saudi Aramco and Shell also have an express interest in water. The venture teams at Total, Cenovus and Chevron have been around a little longer and have all already made water technology investments.
“[Water] is a part of our energy-tech focus. We want to use and extract energy more efficiently,” said George Coyle, of ConocoPhillips Technology Ventures, which has made several watertech investments.
“The common theme across all [water-tech investments] is that they have the potential to significantly reduce our water costs and improve our stewardship of the environment,” he added.
The willingness of corporate venturing firms to invest in early-stage technology is significant, the report says. A lot of the water technologies required by the oil and gas industry are in their infancy, making some financial venture capitalists wary of early-stage investing unless corporates are also involved. New technology companies’ best hope of raising capital may be to start with the corporates, the report suggests.
Tom Whitehouse said:
“Oil and gas corporate venturing units are typically not afraid of early stage technologies, are prepared to invest globally and are aware of the need to provide hands-on support to their investments to help them penetrate their conservative industry.
“For some, acquisition is the end game, but for most technology development is the priority.”
There is a significant array of water technologies in play. Some technologies address the need to reduce or eliminate water used during extraction, while others address technologies which will be deployed at the end of the pipe – they will treat waste water produced after extraction.
Despite ever increasing interest and investment in water technologies from the oil & gas sector, start-ups have a long road ahead. The report concludes that:
“The conservatism of the oil and gas industry is just one of the challenges faced by water-tech companies. A lot of patient and determined capital is required to commercialise. But for the oil and gas industry, water-tech is not merely a nice-to-have, a municipal recycling facility that could be built next year or next decade. It is a strategic necessity.”