One of Calgary’s best-known drilling executives is leaving the oil field service sector for a new venture capital fund focused on energy transition technologies for oil and gas.
Kevin Krausert recently resigned as president and chief executive officer of Beaver Drilling Ltd. He will take up a new position as chief executive of Avatar Innovations Inc., which he’s co-founding with Toronto capital markets professional Bryan Trudel, who will serve as chief financial officer.
The venture capital arm, Avatar Ventures, will capitalize and take an equity stake in companies that eventually form partnerships with big energy players to commercialize new technologies. Examples include hydrogen, carbon trunk lines and sequestration, carbon markets, renewable natural gas, digitization in oil and gas, geothermal, bitumen beyond combustion and nature-based climate solutions.
Mr. Krausert said he wants to be part of a movement to accelerate new business and job opportunities for his home province, heavily dependent on exporting oil to the United States. The economy has been rocked by a drop in worldwide oil demand, oil price wars, lack of pipeline access to major markets and a global capital market increasingly reluctant to invest in carbon-heavy projects or companies.
“The challenges facing the oil and gas industry are, frankly, existential,” Mr. Krausert said.
At the same time, “there is so much horsepower and talent inside oil and gas, that is so passionate and capable," he added. "The one piece of the puzzle that was always lacking was capital.”
A strategy of focusing on the oil and gas sector in collaboration with big energy companies is what will distinguish the Calgary-based clean tech fund from others, Mr. Trudel said.
“We believe that the oil and gas incumbents are in the single-best position to tackle decarbonization, and to put a major dent in greenhouse gas emissions due to their scale, resources, ingenuity, experience with energy and technical excellence," said Mr. Trudel, formerly of Canadian Imperial Bank of Commerce.
The two founders said they are in talks with investors and hope to have capital in place by the middle of 2021. More details are set to come in a formal announcement on Wednesday.
Mr. Krausert’s roots in the Alberta energy sector run deep. His grandfather, Sam Krausert, worked as a roughneck in Turner Valley and eventually co-founded Beaver Drilling in 1965 in a bid to take on U.S.-based drilling companies active in Canada.
But the move toward a venture capital fund stems from Mr. Krausert’s push on “oil and gas beyond baby boomers." It has already led to the creation of the Avatar online training and leadership forum, in which young energy professionals develop projects with an eye to creating new business lines.
He has also been leading the charge in geothermal development, and the potential for Alberta to open up old oil and gas wells to extract underground energy – to cool or warm buildings, or generate electricity, without burning any fossil fuels.
The fund founders said any significant progress in reducing the country’s greenhouse gas emissions is going to have to come with help from Alberta.
As early as this week, the federal government is set to introduce legislation that will formally commit Canada to the already-stated goal of net-zero GHG emissions by 2050, according to a report from CBC. While Canada’s GHG emissions from electricity have trended down the past three decades, the country’s overall rise in emissions has come both from the transportation sector and oil and gas production. Alberta has the highest emissions among the provinces.
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