Gaule: Give a brief introduction to yourself.
Cooper: I manage the early phase investment programme, essentially our corporate venturing activity within Schlumberger. I also look after our external alliances and collaborations with sister industries such as Boeing, Intel, GM and Lockheed Martin.
Gaule: Give a brief description of the purpose of your venture, when it was formed and how the process occurs in your organisation.
Cooper: Schlumberger’s Venture activity was formed in 2008 with the remit to source and secure access to technologies that could disrupt the oilfield services business, in addition to adapting existing venture backed companies that have novel technologies that could be adapted to solve unique problems we face in the typically harsh environments encountered in the oilfield, particularly downhole. We now see it as one of the key pillars of technology development.
When we started, we spent the first six months putting our process together for sourcing, reviewing and investing, and deciding what kind of corporate venturing activity we wanted to be. It was very clear early on that we were going to source technologies and invest in those that would primarily be of strategic benefit. We have more than 6,000 people in research and development so we take advantage of their technical breadth and depth in both sourcing and reviewing the opportunities. We have an investment committee comprising senior technical and business segment management, including representation from intellectual property, legal and finance. We meet twice a year and review 60 to 70 companies in detail. This is distilled from the 300 to 400 we scan every year.
Gaule: How has the venture unit changed over the years?
Cooper: When we started, I would say we were more scattershot in our approach to sourcing. Once we found an interesting opportunity, we would take our time reviewing with the business units to assess whether it met a strategic need. Our investment in Liquid Robotics is a good example of this. Here is a marine-based measurement platform that clearly has a wide range of applications, but how to decide where best to target? Now we are directly involving the business groups very early in the sourcing process, taking their key issues and directly searching for solutions. We have grown in size too. There are now two of us in the team, with a colleague joining us from Massachusetts Institute of Technology last year. Of course, we have a much wider support group within finance, legal, mergers and acquisitions, and engineering and research that assists with our investments. We are also more open to partnering other strategics than when we started, whereas when we started we were more focused on having a top-quartile traditional financial venture partner leading the round.
Gaule: Outline the strategic and financial benefits you bring to your core business and how you have gone about measuring the benefits.
Cooper: The oilfield service business is highly competitive so I cannot say too much. However, we have had pressure from both finance and business units to assess the value of the technologies. To me, and this is more of a personal statement, there is nothing more satisfying that seeing a technology deployed in the field. Right now, we have three of our portfolio investments – we currently have 10, with four licence-only deals – in field test, with a view to commercialising this year. That is an obvious, black-and-white metric.
However, we did assess the innovation capital concept from Synchrony as a novel way of actually putting dollar figures on the strategic benefit. The numbers can still be fuzzy, but there is no doubt that their approach encompasses many of the attributes that lead to strategic value. On the financial side, we have not been through an exit yet, and it is unlikely that we will be the exit for most of our investments, but we do keep a keen eye, via our board seats and observers, on the growth of the portfolio companies in their main business areas. There are many other intangible benefits that our group brings to product development, whether it is just a sanity check that internally we are going in the right direction, or sourcing a component-level technology that can immediately slot into a programme, with no investment necessary. Additionally, the tighter ties to key universities, via their commercialisation arms, also facilitate potential recruitment opportunities.
Gaule: On what key strategic areas are you currently focused?
Cooper: That would be telling. As a company that has very broad oilfield service remit, from exploration through drilling, stimulation, completion, all the way to well abandonment, we naturally have a very broad range of technical interests.
This is reflected in the structure of our research centres too, which tend to focus on the application of fundamental sciences.
Chemistry and materials science have been a growing focus, but we are not constrained in our group, so we will also look at technologies spun out of pharma and biotech.
Gaule: Give a brief overview of the people in the team and the partners you work with.
Cooper: There is essentially two of us in the team. I come with 20 years’ experience in the oil and gas business, having developed many technologies for a wide range of the Schlumberger businesses as well as heading up drilling research and product development for our well services business. I also hold 25 patents so have a keen eye for intellectual property. Christina Karapataki just joined, but already comes with venture experience from her time interning at Venrock, and with oil and gas experience from time at Exxon. With degrees from Cambridge and MIT, she is also frighteningly smart.
Gaule: How do you work with your partners in the exploration ecosystems to do your venturing?
Cooper: We like to syndicate and most deals have been brought to us by venture partners. We work closely with them in exploring the applicability of a technology in the field and I think they expect us to do a lot of the heavy lifting when it comes to the technical due diligence, which is our real strength. We are geographically agnostic, and have sourced deals from all over the world.
Gaule: What has been your most interesting recent deal?
Cooper: It is hard to single out a specific investment, as they all have appealed to us with their novelty. Certainly the Liquid Robotics deal has been a very interesting one, and easily met the I-wish-I-had-thought-of-that test, now that we have a full blown joint venture with them, called Liquid Robotics Oil & Gas. Automation and robotics will be key themes in the coming years in the oilfield, and this first foray should be very interesting as the technology matures.