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Chevron Arm Offers Venture Capital

Zacks Equity Research

Chevron Technology Ventures LLC (“CTV”), a business segment of the integrated energy behemoth, Chevron Corp. (CVX), launched a venture capital fund worth $90 million. The CTV Fund V is the fifth of its kind since 1999.

The fund is directed toward early to mid-stage companies as well as limited partnership funds. The focus will be on those companies that develop upcoming technology and can aid Chevron in enhancing its businesses and exploring new options.

Management of CTV believes that using venture capital as a channel will help Chevron in easier and speedier integration of innovative and emerging technologies into its businesses. CTV evaluates over 400 investment options every year. However, it chooses as few as one to three opportunities in which to invest, keeping Chevron’s growth in mind.  

CTV is one of the three technological companies of Chevron that are entrusted with providing the latter with cutting-edge technologies for its businesses. Incorporated in 1999, CTV presently has 37 companies in its portfolio.

San Ramon, Calif.-based Chevron is one of the largest publicly traded oil and gas companies in the world, based on proved reserves. It is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals and other energy-related businesses. The company’s operations are mainly divided into two segments, Upstream and Downstream.

Earlier in the month, Chevron entered into an agreement with prosecutors in Brazil for the settlement of lawsuits concerning an oil spill, off the country’s coast of Rio de Janeiro. The company will have to make a payment of only $41.6 million, which is far below the Brazilian prosecutors’ initially estimated figure of $20 billion, as regulatory government authorities concluded that damages owing to the oil spillage were not that grave.

Chevron currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider other stocks in the energy sector such as Dril-Quip, Inc. (DRQ), Magellan Midstream Partners LP (MMP) and Seacor Holdings Inc. (CKH) as attractive investment opportunities. All these currently hold a Zacks Rank #1 (Strong Buy).  
 

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