Editor’s note: All dollar figures are U.S. currency unless otherwise noted.

CPP Investments’ door is to oil and gas investment stories as the giant Canada Pension Plan wants to double its energy portfolio to $50 billion in the coming years.

“Our $25 billion [energy] portfolio is half renewables and low-carbon and half traditional energy,” Bill Rogers, a CPP Investments managing director and its global head of sustainable energies, said at the recent CERAWeek by S&P Global conference in Houston.

“And as we double to $50 billion [in energy], we'll look to maintain that diversification.”

Based in London, Rogers joined CPP from Macquarie Group and began his career at Shell Oil and McKinsey & Co.

Its money is long-hold, unlike traditionally build-and-flip private equity investment funds, he said.

“We're quite unusual,” Rogers said.

Also, it’s hands-on, unlike pension funds, institutional funds and others. “As a half-trillion-[U.S.]-dollar fund, we can hire our own team investing in private and public equity,” Rogers said.

Launched in 1999 with CA$12.1 million that has grown to CA$700 billion as of year-end 2024, “we are a young pension fund; our liabilities are quite backdated. So we have a lot more inflows, which means that we're investing for long-term capital growth.”

Most pension funds invest through managers. “They may be directly investing in public markets, but they'll be investing through the VCs [venture-capital shops], private-equity firms and infrastructure funds.”

CPP’s investment spree

Some of CPP’s current oil and gas holdings include $1.3 billion in Utica Shale oil-focused Encino Acquisition Partners, including an additional $300 million last spring.

Also in Appalachia, it has a more than $1 billion, 35% stake in a midstream joint venture with Williams Cos. in the Utica and Marcellus shales.

In the Rockies, CPP’s Crestone Peak Resources merged with Extraction Oil & Gas and Bonanza Creek in 2021, forming Civitas Resources. CPP held a 16.5% stake in the stock, according to Civitas’ most recent DEF 14A filing with the U.S. Securities and Exchange Commission.

CPP invested more than $800 million in Denver-based gas pipeline operator Tallgrass Energy in August.

In U.S. oilfield services, its VoltaGrid Technologies provides in-field power to well-completion pressure-pumping operations.

In western Canada, it holds positions in oil and gas producer Teine Energy and in pipeline company Wolf Midstream, which holds 100% of Access pipeline.

Offshore Ireland, in a joint venture with Canada’s Vermilion Energy, its Nephin Energy operates the Corrib gas field and is Ireland’s largest gas producer.

Not divesting

“Our CEO likes to say that divestment is a short on human ingenuity,” Rogers said.

Some investment funds have a mandate to divest oil and gas.

“Quite a few pension funds have an inability to invest in traditional energy because of the carbon content and they've also locked into net-zero pathways that mean they need to divest,” Rogers said.

But locking in a low- or no-carbon-only tack results in a lack of diversification in the overall energy space, he added.

While some Canada Pension Plan stakeholders don’t want it to finance oil and gas, CPP Investments is also financing no-carbon energy.

“We've said we're going to double our renewables investments over time. But we've said we are absolutely going to keep investing in traditional energy,” Rogers said.

It’s necessary to maximize returns and reduce the risk of losses, “and we think that diversification is important in an uncertain energy transition.”

Oil and gas companies “are fundamental in achieving an energy transition. So what we want to be doing is providing capital to support their activities.”

Oil, gas plus carbon capture

CPP has also found ways to combine some oil and gas investments with a net-zero asset.

With a 49% position in California-focused producer Aera Energy Services, acquired from Shell Oil and Exxon Mobil, it merged this with another producer, California Resources Corp., which was spun out of Occidental Petroleum.

The combination formed CRC Resources, which has added carbon-capture to its operations.

“That's a transaction that many of our [pension fund] brethren couldn't do because of their [net-zero] mandate restrictions,” he said.

“But actually, it delivered a great return for our beneficiaries and [is helping to] decarbonize the California economy.”

Another example is western Canadian oil and gas pipeline operator Wolf Midstream building a CO2 trunkline.

“We're in a growing market. There's going to be a need for more energy, so let's continue to build out low-cost energy as [we keep an] eye on the sustainability side as possible,” Rogers said.

“I think you keep doing that, over time you should be alright.”

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