In a keynote speech at the Global Corporate Venturing Symposium, Issam Dairanieh, managing director of BP Ventures, explained how the unit was created out of the decision its parent company made in 2005 to focus more heavily on alternative energy.
Subsequently founded in 2007, BP Ventures operated as part of plans for BP to spend $8bn over the course of the next decade. However, in less than eight years, the money has already been invested in alternative energy ventures.
In 2010 BP Ventures’ direction changed, and instead of exclusively focusing on alternative energy, traditional energy was added to the mix.
Speaking with Global Corporate Venturing editor Toby Lewis, Dairanieh said: “To be part of a company that is really dominated by upstream in terms of revenues, if you want to be impactful, you have to work with the bigger guys in the company, and that is upstream.”
BP Ventures now has upstream assets in addition to its downstream investments, including biolubricants and biochemical investments, as well as alternative energy assets.
One of its strategies was to adopt external technologies, and then to employ the technology within the BP assets and businesses.
This was implemented through a pull and push model, the push element being where the BP team uses the relationships it has developed to research what is emerging. The ideas can then be brought into the company for review, though this method has had mixed success.
With the pull element, one part of the business is working with BP Ventures to help influence and accelerate the development of the technology. BP Ventures is set to launch pioneering technologies into the marketplace this year.
Dairanieh said: “We do not think we are the natural owner of the technology; we are putting it in a vehicle, for it to be met with the people who will deploy it and market it.”
The biggest trend for BP Ventures last year was digital, as the IT sector uses less capital and the time required to being a product to market is also less. Recent developments in the IT sector have been important to BP.
In an internal study carried out by BP, the benefits of deeper engagement in digital energy and the estimates in terms of returns span into the billions of dollars, and if digitisation or optimisation is used more effectively, it can be a way of moving the industry forward.