Corporate Venture Capital

Transcription

1 Corporate Venture Capital Imran Kizilbash Vice President Schlumberger Venture Fund 1

2 Agenda Introduction to Schlumberger Macro environment Corporate Venture Capital Schlumberger Objectives and Rationale Historical Portfolio Companies Focus Areas and Ambition Current Portfolio Companies Conclusions 2

3 Schlumberger at a Glance Schlumberger is the worlds leading provider of technology and solutions in Oil & Gas industry since 1926 Characterization Wireline Testing & Process WesternGeco Software Integrated Solutions Integrated Services Management Drilling Drilling & Measurements Drilling Tools & Bits M-I SWACO Integrated Drilling Services Land Rigs Production Well Services Completions Artificial Lift Solutions Integrated Production Services Production Management 2016 Financials Revenue Net Income 1 R&E $27.8 billion $ 1.6 billion $ 1.0 billion 16 GeoMarkets in 2 Hemispheres Approximately 100,000 2 People Representing 140 Nationalities Working in more than 85 countries Cameron OneSubsea Drilling Systems Surface Systems Valves & Measurement 95 Research, Engineering & Manufacturing Centers located in 18 countries Number of clients ~ 7500 Number of suppliers ~ 55,000 3 *Notes: (1) Net income, excluding charges and credits, (2) Total employee headcount, Jan 2017

4 Worst Oil & Gas Downturn Looking for Growth Oil Price USD/bbl Industry Headcount Reduction* Thousands of employees Upstream Capex Spend USD Billion Schlumberger Revenue Excluding CAM USD Million 15, ,000 5,000 4 Well Services Drilling Suppliers E&P Total Upstream Job Cuts *During the downturn period of Source: IEA, IHS, RigZone, IEA

5 Commitment to R&E is a hallmark of Schlumberger R&E Spend (Oilfield Service Sector 3 largest competitors) Billion USD 1.6 Billion USD 1.6 R&E Spend Schlumberger Source: SEC Filings

6 Increasing Pace of Innovation and Adoption Innovation: Increasing global IP development More open innovation shortens development time First mover technological advantage increasing in importance Increasing competition for partnering with Universities and academia increasing monetizing these relationship and IP Adoption: Rate of innovation adoption has greatly increased Speed to market has become a more important competitive advantage 6

7 Schlumberger Corporate Venture Capital Effort Nearly a decade of experience ~ since 2008 Small team of ~ 4 team members + legal/financial support from corporate Portfolio of ~ 20 companies 7

8 Objectives and Business Case Strategic Strategic Drivers Schlumberger Financial Access to technology, especially from other verticals Future disruptive innovation Faster response to market changes Explore new areas for growth (white spaces) Create demand for parents company s products and services Partnering with other firms Financial Driver ~ to ensure that the corporate venture program is economically robust 8

9 Link to operational capability Investment Rationale Tight Driving (advance strategy of current business) Enabling (complements strategy of current business) Emergent (allows exploration of potential new business) Passive (provides financial return only) Loose Strategic Corporate Investment Objective Financial 9 Source: Harvard Business Review Articles, 2002 and 2013

10 Historical Portfolio Companies Liquid Robotics Silicon Valley and Hawaii based startup Autonomous marine surface measurement platform propelled by ocean waves Applications: Military applications Meteorological measurements Schlumberger interest in seismic and subsea. Exit to Boeing in December

11 Historical Portfolio Companies Contour Energy Services Caltech battery technology spin-off, Nobel Laureate Founder Initially developing both Primary and Secondary cells Applications: Consumer battery applications Multiple industrial applications Schlumberger interest was in downhole high temperature batteries Company failed in 2014 Schlumberger commercialized three different batteries for downhole tools that are currently in use 11

12 Ambition Build a portfolio of companies. Capital deployment of a few hundred million by end of 2021 Transact ~ 5+ new opportunities each year Strategic Successful joint technology development with Schlumberger business lines Business development successes for Schlumberger Growth in some white spaces Financial Delivering to corporate a financial return slight higher than our WACC (weighted average cost of capital) Self sustaining business unit in 5 years time 12

13 Business and Technology Areas of Interest Upstream Oil & Gas Business Verticals Energy (beyond traditional Oil & Gas i.e. Geothermal, renewables) Mid stream and downstream Oil & Gas Energy storage (batteries, fuel cells ) Transport and mobility Resources mining Technologies Alternative and renewable energy Emissions monitoring Robotics and automation Novel sensors and instrumentation Industrial internet of things Battery and energy storage technologies Advanced materials, chemistry and nanotechnology Additive manufacturing AI, analytics and machine learning Secure data transmission and storage Data and video analytics 13

14 Current Portfolio Companies CelluForce Montreal based startup Collaboration with Waterloo University, FP Innovations, Domtar Nanocrystalline cellulose (a non toxic byproduct of wood pulping process) produced via innovative manufacturing process Applications: Reinforced composites Adhesives Optical films Pigments and inks Drug delivery Schlumberger applications are around non-toxic well construction and stimulation Completed field trials in 6 well. Expected to be commercial end of

15 Current Portfolio Companies WiTricity Boston based MIT spin off Wireless power transfer over short to medium distances via resonant magnetic coupling Listed as one of the top inventions of 2014 by Time Magazine Applications: EV (electric vehicle charging) Consumer product applications (Dell computers ) Schlumberger interest wireless downhole and surface power applications in Oil & Gas 15

16 Conclusions Schlumberger corporate venture capital group has a decade of experience Portfolio of ~ 20 companies Main driver for investments are strategic Need to deliver a certain threshold of financial performance Portfolio companies are bringing value to Schlumberger in terms of technology, applications from other verticals and potential growth opportunities We have a broad remit beyond Oil & Gas and an ambition to grow our portfolio of investments 16