No doubt we are living in times when energy companies have to face completely new scenarios.

One of the few positive outcomes of the current crisis is to be able to turn these times into a crash course in digitization, macro-economy and globalization.

In particular, it is clear that historically cash-rich Oil & Gas companies today are facing a tectonic shift.

On one side, the process of digitization and electrification of their client needs have been progressing for quite some time.

On the other side, the supply & demand imbalance has been exacerbated by a mix of political and economical forces.

The net result is that we are moving from a world where Oil & Gas crowded the top Fortune 500 list (as I mentioned in a pre-COVID times post) to a much more uncertain future.

Shell Ventures, one of the most active CVCs in the New Energies Oil&Gas industries, was already in the business of helping redesign the future of its industry.

The current environment has only accelerated its course.

Here are a few insights from my conversation with Kirk Coburn (Investment Director) and Giancarlo Savini (Implementation Manager):

• The need for mitigation of Climate Change, Digitization and Electrification were already at the core of Shell Ventures focus. The current crises could only reinforce that prior commitment
• With 6 locations around the world, the Shell Ventures scope is global. The focus is H2 (3-6 years) with some moonshots (8+ yrs, ie Hydrogen), 8-12 investments per year in the  $2-25M range
• The implementation team (4 people embedded in the venture arm) connects the portfolio companies with the BUs. The KPIs of the fund include tangible internal improvements (operational efficiency and cost savings) but also intangibles (bi-directional learnings, BUs<>Portfolio companies)
• EU today is best positioned to support (at government and regulatory level) the transition to renewable energy (as demonstrated by the European Commission Green Deal commitment)

With a growing population and a more pressing need for sustainable and CO2 neutral energy sources, the trails that entities as Shell Ventures are blazing, have profound implications that go way beyond their immediate financial return.

As suggested by our chat, we, citizens of the world, are all invited to make (better) informed decision: our choices, as consumers, have long term implications that cannot be underestimated.

TIMELINE:

1:45 Where is the Oil Industry headed today?

4:22 What does negative oil price mean?

6:12 Shell Ventures: structure

9:50 The Implementation team role within Ventures

11:50 Flow of information from BUs and CVC

13:51 Example of Grid Optimization portfolio integrated in a BU

15:10 Measuring KPIs beyond financial returns

22:10 Has COVID forced Shell Ventures focus on something different?

25:45 CVCs tend to retract investments in moments of crisis

28:45 Is lack of physical contact an issue to evaluate new investments?

32:00 Areas where you feel bullish (hydrogen, Renewables)

35:14 What countries are better approaching support of renewables?