Venture Capital Oil and Gas

Venture Capital Oil and Gas

The majority of venture capital discussions in the area of energy revolve around the search for alternatives to gas and oil. This should not be taken to mean that venture capital for oil and gas production is not an important element of the industry. To see more about corporate venture capital Click at

There are many reasons why people feel we must find alternatives to oil and gas to supply the energy needs of the world. Just about everyone has their pet one. Since a large portion of the gas and oil supply exists in politically unstable regions of the world, we must find an alternative. Since gas and oil refining, transport, and use presents such serious environmental issues, we must find an alternative. Since the price of gasoline at the pump has risen so drastically, we must find an alternative. It would seem that the proper place for venture capital as regards oil and gas would be to invest in companies seeking an alternative.

There is no doubt that the search for a viable alternative fuel represents a very cutting edge area of venture capital investing. A very high percentage of all venture capital deals are involved in energy related companies. It will remain a serious search until an answer is found and the problems addressed. This is the fuel for venture investment interest in alternative fuels.

Venture Capital Oil and Gas

Yet, alternative fuels represent only one side of the picture. If we are over dependent on foreign oil and if we face shortages and if the price of oil has increased, it also means finding more of it locally represents a very profitable short term solution also. Venture capital investment in oil and gas drilling may be a short term solution to a serious international problem, but it can also be a way to short term investment opportunity.

There are two different approaches to gas and oil exploration. The first is a search for new major oil fields that can be developed. This is a highly speculative return to the “wildcatting” mentality of the original oil rush days. It raises the eyebrows of most venture capitalists because many see this as an example of investing in a golden opportunity whose time has passed. The second approach is what is catching the attention today. This involves the improvement and expansion of existing wells in proven production areas.

The Government has made the tax structure of new drilling operations so generous in its desire to increase domestic oil production that there are opportunities still available. Some major venture capital firms are specializing in putting together investment groups to exploit existing oil fields by the strategy of drilling in proven areas reducing the risk of failure. It may be true that alternative fuels represent the future of energy investment, but gas and oil still represent its very profitable present. Coleman Duel Fuel stove has an important role in oil and gas production.


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