The growth of Houston’s startup ecosystem is gaining attention from established players in the city’s legacy industries. The Ion, an incubator based in Houston’s Midtown, demonstrated that growth by naming Houston-based Occidental Petroleum Corp. (NYSE: OXY), Chicago-based United Airlines Ventures, and Australia-based Woodside Energy Group Ltd. (NYSE: WDS) as partners in May.
The announcement came ahead of the Ion’s second annual Activation Festival, an event celebrating innovation in Houston. Jeff Simmons, chief petrotechnical officer and senior vice president at Occidental, confirmed to Houston Inno that the energy company’s partnership with the Ion was as a sponsor but said Oxy was open to upgrading to a tenant membership in the future.
Simmons, who also manages Oxy’s internal Strategic Technical Excellence Programs, said the Ion’s growth since its 2021 opening had given Oxy no choice but to take note. He said the incubator’s focus on events and event space aligned with Oxy’s innovation strategy.
“We want to have company events there where we can interact with people that are in this space and take advantage of that,” Simmons said. “When we interact with joint industry projects such as this, my experience is that it is a participation sport, so I want to see how our employees engage there.”
According to Simmons, Oxy began looking into opportunities in the past year. He said the Ion’s plans for its expansion into a retail and potential living district was another factor in the partnership.
Jan Odegard, executive director at the Ion, recently told the Houston Business Journal that the Ion's goal was to create density around tech and innovation in Houston, and its expansion plans were designed for users to have an all-in-one experience. The Ion has currently leased 86% of the former Sears building on Main Street to tenants, ranging from tech companies to restaurants.
“You’re looking for that place where your office is next door and you have access to things that you wouldn’t have access to otherwise,” Odegard said. “I think all of these spaces are amenities that actually create value even for residential spaces.”
The announcement of Oxy's Ion partnership followed the company’s groundbreaking of its $1.1 billion direct air capture project in the Permian Basin. The facility, which will be the largest direct-air capture facility in the world once completed, is expected to begin operations in mid-2025 and employ over 1,000 people during construction. Oxy is working on the project under its joint venture subsidiary 1PointFive.
Simmons said that in addition to its Ion partnership, Oxy has also been looking into potential opportunities with Greentown Labs Houston, another Midtown incubator, but said there was no agreement currently.
Pitchbook highlighted carbon and emissions tech as one sector that has resisted the current downturn in venture capital. The report highlighted San Francisco-based Generate Capital’s $880.6 million deal as an example of investors’ faith in the carbon sector. Generate Capital itself committed up to $250 million for Greentown Labs member Ambient Fuels’ green hydrogen projects in May.
Houston has also attracted international attention as a landing spot for energy transition projects. The U.K.-based Drax Group announced in late May that its North American carbon operations HQ would be established in the Bayou City. Company officials told the HBJ that over 100 people would be hired for the office, which does not have a precise location selected.
Occidental Petroleum is No. 8 on the HBJ's 2022 Largest Houston-Area Public Companies List, based on its 2021 revenue of $25.96 billion. For 2022, the company's revenue was $36.63 billion. The 2023 List will be out later this summer.
The company also ranked No. 4 on the HBJ's 2023 Largest Houston-Area Energy Employers List, based on its estimated 7,000 local employees.
