February 23, 2011 at 11:55 pm #2368
ConocoPhillips Drills Into New Technologies, Stock A Tad Expensive
Feb. 23 2011 – 4:44 pm
Posted by Trefis Team
ConocoPhillips, one of the largest oil and gas exploration and production companies in the world, recently announced that it will partner with NRG Energy and GE Capital to invest $300 million in a joint venture that will promote emerging energy technologies  . ConocoPhillips has been a leader in development of new energy technologies with several of its activities focused on power generation and new technologies. Its main competitors are ExxonMobil, British Petroleum, Anadarko and Chevron.
We maintain a $68.44 price estimate for ConocoPhillips stock, which is roughly 10% below market price.
The new joint venture, named Energy Technology Venture, will fund approximately 30 venture and growth-stage companies over the next four years from the $300 million in total capital that the three partners have committed. Among the first beneficiaries of this fund are Alta Devices (manufacturer of solar photo-voltaic cells), Ciris Energy (developer of cleaner coal), and CoolPlanetBioFuels (which produces clean bio-fuels).
According to ConocoPhillips press release, the wide range of deep technical and financial expertise, relationships, services and products, of the three companies behind Energy Technology Ventures will help start-ups develop next generation energy technologies.
Emerging Business Activities
ConocoPhillips actively seeks investment opportunities in wind, solar and geothermal energy to provide new opportunities for future growth. As a part of its emerging business, ConocoPhillips owns a 1,180 megawatt power plant in the U.K. that provides steam and electricity to the Humber Refinery and also provides steam to a neighboring refinery. It owns a gas-fired co-generation plant in Texas and offers a gasification technology (E-Gas) that uses petroleum coke, coal, and other low-value hydrocarbons as feedstock, and results in high-value synthesis gas used for a slate of products, including power, substitute natural gas, hydrogen and chemicals.
ConocoPhillips emerging business segment generated revenues of about $600 million in 2009. We estimate that the companys revenue from emerging business will see a steady uptick towards $1.1 billion by the end of our forecast period. However, as ConocoPhillips core business is the production and refining of oil and gas, these new initiatives would still represent a relatively small portion of the companys total revenues.
February 24, 2011 at 12:09 am #5245
I found this Forbes recap of COP news release today about COP’s new Energy JV.
Sounds like lot work mentioned is going to fall under an Alternative Energy business unit. It also appears to have been created about 6 months ago and from other news items & comments it seems to be completely separated from COP Power Generation & Technology business unit (which holds power project development as well as E-Gas and LNG licensing).
So I guess that down the road you will see COP touting this as ‘creating green jobs’, and maybe that is why their are two groups: A real working application in EGas / LNG licensing and this Green Energy Technology Venture that isnt likely go anywhere (like GE’s other attempts in this area).
Since this seems to be ~6 month old avenue for COP, I am assuming it could be brain-fart one new Exec’s they imported from majors like XOM & CVX who are used to trying put green blanket over oil industry hoping to get favorable treatment from Environmentalist – they haven’t had original idea in decades and one look at outcome for BP & Shell tells you its stupid tactic (besides losing butt load cash). When energy prices will get back fundamental levels away from speculators built in fear premiums spiking volatility …… the high cost of these alternate energy areas go back to sucking wind.
I think EGas like Refining is going have good earnings run for existing assets & business units before consolidation and down cycle. I think its sad that the postive comments on EGas business application for petcoke & clean coal applications
actually came from this Forbes business analyst who recaped the news release and not from COP folks doing the release.
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