I spoke to Richard Riggs, of Saudi Aramco Energy Ventures. Saudi Aramco Energy Ventures (SAEV) is the corporate venturing subsidiary of Saudi Arabian Oil Company (Saudi Aramco). Headquartered in Dhahran with offices in North America and Europe, SAEV invests in upstream and downstream oil and gas, petrochemicals, renewables, energy efficiency and water sectors. The group was established in 2012 with a $500m investment capital allocation. Typical investments are $5m to $10m.
The world’s largest oil producer, Aramco has ambitious aims to grow its petrochemicals business. SAEV will help fulfil this ambition by investing in breakthrough advanced materials technology businesses that can provide competitive advantage to Aramco’s chemicals businesses midstream and downstream. The advanced materials investments in its portfolio include:
Siluria technologies: a California-based business whose nanotech-enabled catalytic process transforms methane into commodity chemicals.
Novomer: a Massachusetts-based business commercialising a novel catalyst system that transforms waste carbon dioxide and carbon monoxide into high-performance, low-cost polymers.
Rive technology: a New Jersey-based catalytic and separations processes business using “molecular highway” technology to refine petroleum, produce chemicals and biofuels, and purify air and water.
Riggs joined SAEV’s Aberdeen-based team in his native Scotland last year after eight years at German chemicals group BASF, most recently in its corporate venturing unit. One of his responsibilities at SAEV is to help increase the number of advanced materials technology businesses in the portfolio.
SAEV is sponsoring the Leif Global Corporate Venturing programme on advanced materials.
SAEV’s current advanced materials investments are all based on innovative catalysts. What is the relevance of advanced materials to catalysts?
Catalysts are materials that accelerate chemical reactions. They are universal in the chemicals industry. Through new catalysts, chemical processes can be improved or indeed new chemical processes and products can be developed.
Such catalyst technology requires innovation in materials science – catalysts can be seen as advanced materials themselves. We have good examples of this within our portfolio. Through nanotech innovation, Siluria Technologies has greatly increased the surface area of catalysts, thereby increasing their efficiency and significantly lowering costs in the conversion of methane to ethylene, which is the world’s most widely-used basic chemical feedstock. Novomer, which is based in Massachusetts, uses novel catalysts developed at Cornell University that enable the cost-effective co-polymerisation of carbon dioxide with other basic chemical feed stocks like ethylene oxide or propylene oxide. New Jersey-based Rive Technology improves the performance of catalysts at the molecular level to enhance their performance.
SAEV’s investments have to have strategic relevance to Aramco and Saudi Arabia. What impact will advanced catalysts and catalytic processes have on the ground for aramco?
Saudi Arabia has the largest reserves of the most important chemical feedstock, oil. What is more, oil is cheaper to produce in Saudi Arabia than anywhere else in the world. So we already have a strategic advantage, which we want to build on. We are interested in catalytic process that can transform oil into chemicals as quickly and efficiently as possible, as well as those which allow the development of novel value-added materials systems. We are also interested in advanced materials innovation that allows us to use gas as a chemical feedstock, and there is an abundance of unconventional feed stocks such as carbon monoxide and carbon dioxide, which can be captured and used to create valuable products.
What are SAEV’s interests in advanced materials outside the realm of catalysts?
SAEV is interested in materials innovation that can improve all the processes of an integrated oil and gas company. Solar and water are also strategic issues for Aramco and Saudi Arabia.
Materials that can eliminate or reduce corrosion are at the top of our wish-list, along with new membrane materials that can be used for gas separation and water desalination. Other areas of interest include fuel additives, water treatment systems, drilling and well treatment materials, enhanced oil recovery systems, tracer materials, desulphurisation systems, high-efficiency photovoltaic systems, and thermal insulation and heat transfer materials.
How does aramco work with SAEV portfolio companies?
SAEV will invest only in companies where we see a strong possibility that the technology will be adopted in Saudi Arabia. SAEV has an in-house business development team whose job is to connect our portfolio companies to the right technical specialists in business groups in Saudi Aramco, whether for piloting, commercial deployment, or for joint development projects. We also aim to support portfolio companies doing business in Saudi Arabia by helping them navigate contracting processes, providing support with setting up local operations, introductions to other potential customers in Saudi Arabia, and so on.
On the other hand our investment team consists of a highly-experienced group of professionals with backgrounds in venture capital, corporate venturing, corporate development, investment banking, entrepreneurial management and strategy consulting. We are actively engaged with our portfolio companies at management level, often taking seats on the board and helping wherever we can to support the companies’ growth. Our aim is to be known in the market as a value-adding strategic investor.
Who are the other active investors in this sector?
The venture units of the other oil and gas majors are also active, though they may have priorities different from ours. But there are several other co-investors in SAEV’s advanced materials portfolio that are not focused exclusively or even mainly on oil and gas. Corporate venturing groups in the chemicals, automotive, power and industrial sectors are active in this area. It is good for companies when they have investors from different industries behind them. There are also several highly experienced financial venture capitalists with an advanced materials focus. We have co-invested with some and are keen to do more in the future.
From which parts of the world do you expect to source your investments?
The Aberdeen office where I am based looks at Europe, though SAEV invests globally. Besides Saudi Arabia, we have offices in North America, Japan and Korea. My experience in European venture capital gives me confidence that we will not lack dealflow in Europe.
What areas of technology innovation excite you most? Where do you foresee technological breakthroughs?
Technology innovation can come from all sectors. However, it is pretty difficult to predict what is coming up next. It is important to be open to all sorts of technologies, and from different sources. Some of the most exciting innovations come from cross-fertilisation between sectors. For example Siluria has used biological processes in the manufacture of its innovative catalyst systems. Advances in computing, microfluidics, nanotechnology and genetics are already driving innovation in new materials, and we expect this to continue.