Chevron VC unit backs Soane Energy

Heavy equipment mines the oil tar sands near Fort McMurray, Alberta in this May 23, 2006 file photo.

SAN FRANCISCO (Private Equity Week) – Cambridge, Mass.-based Soane Energy, which is aiming to cut the impact of crude oil exploration and production, recently raised an undisclosed amount of early stage funding from venture capitalists.

Intervale Capital led the investment with support from CTTV Investments, which is also known as Chevron Technology Ventures, the VC unit of Chevron Corp.

“Our reliance on fossil fuels will increase over the next two decades,” said company founder David Soane.

“While alternative energy will fulfill our power needs of tomorrow, Soane Energy’s technology can be applied today to improve the efficiency of oil and gas extraction and reduce the environmental impact of exploration and production.”

The company’s technology uses chemistry to improve the process of extracting oil from oil sands. Also known as tar sands, they are a naturally occurring mixture of sand or clay that includes a thick form of petroleum.

The oil sands are found throughout the world, especially in large quantities in Canada and Venezuela. Up until recently, oil sands were considered unprofitable for oil extraction because of the difficultly of extracting and refining it. There may be as much as 175 billion barrels of petroleum sitting in Canada’s sands waiting to be extracted, according to Soane, a repeat entrepreneur who was formerly a chemical engineering professor at the University of California at Berkeley,

Soane’s startup, however, is one of several dozen new companies in the market that are looking to tap into oil sands

“The market is quite large,” says Wes Raffel. “There aren’t too many that are larger.”

Raffel, a former general partner with Advanced Technology Ventures, previously partnered with Charles River Ventures and Nth Power to back Rive Technology, a startup focused on making better refining processes for oil companies. To date, Cambridge, Mass.-based Rive has raised $23.3 million from investors to pursue its technology.

Another example is Houston-based GloriOil, which has developed technology to ease the extraction of oil out of nearly tapped wells. The company, which claims that its technology leads to a 200% increase in oil extraction, has raised $10 million in venture capital from Kleiner Perkins Caufield & Byers and other investors.