First investment by oilsands investment fund comes after years of false starts

September 27, 2016 Financial Post

By: Jesse Snyder

CALGARY — An investment fund led by two major oilsands players announced new investments in clean technology companies Tuesday, part of a broader attempt to speed up the development of technologies and reduce the companies’ environmental footprints.

Evok Innovations, a venture capital fund between Calgary-based Suncor Energy Inc. and Cenovus Energy Inc., announced in January that it would invest up to $100 million in clean technology companies.

Tuesday’s announcement marks the fund’s first investment, the value of which it did not disclose. The investment is in five energy startup firms, ranging in scope from a designer of electric pumps to a bio-remediation company.

Evok is one in a long list of corporate venture funds that oil and gas producers have created in an attempt to discover new technologies, diversify revenues or clean up their image as heavy polluters. The energy industry’s adoption of such funds dates back to the 1970s, when super-majors such as Exxon Mobil Corp. and Royal Dutch Shell Plc opened investment divisions.

Decades later oilsands operators in Canada began doing the same, with dismal results. International companies such as Total E&P Canada and Saudi Aramco launched Canadian investment divisions, alongside Canadian firms Suncor, Cenovus, Encana Corp. and pipeline giant Enbridge Inc.

Those funds were either shut down or suspended, as company executives decided to focus on their core operations rather than put money into risky ventures. The failure of some funds kicked off a broader debate about whether oil producers should dip their feet into the investment business.

Evok CEO Marty Reed said Evok is structured differently than past funds, and aims in part to mimic the investment philosophies of successful Silicon Valley VC firms.

“What differentiates us is that we truly are independent from our funders,” he said. “We operate much like a traditional venture capital firm might.”

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