SAN FRANCISCO BP Ventures will continue to expand beyond alternative energy to more mainstream energy investments, said Issam Dairanieh, BP Ventures' director of global ventures.
The venture arm of the oil and gas giant BP (BP.L) made its first refining and processing investment two years ago and its first exploration and production investment last year, Dairanieh told Reuters in a telephone interview.
The moves represent a broadening for BP Ventures, which was founded in 2006 with the goal of alternative-energy investing.
"In general the support the industry needs is not only money that may come from financial venture-capital groups, but it also has to be about people who know how to scale technologies," Dairanieh said, referring to start-ups in the energy sector. "People like us are able to take a big role."
Like many venture firms, BP Ventures invests around broader investment theses related to market trends. One big thesis has been water issues, leading to discussions with a water company that he declined to identify because negotiations are ongoing.
BP Ventures has not yet invested in companies that can tap into the natural-gas boom, but plans to once it finds the right fit, Dairanieh said.
Since 2006, it has invested in more than 30 companies, including its single biggest investment a biofuels company he declined to name.
The portfolio company he believes that is closest to an "exit", meaning the company could be acquired or undergo an initial public offering, is solar company Brightsource. It previously filed for an IPO but pulled it last year due to difficult market conditions in the sector.
Parent company BP decided to exit the solar business in late 2011, but BP Ventures is sticking with it, Dairanieh said.
(Reporting by Sarah McBride; Editing by Bob Burgdorfer)