Occidental Petroleum Continues Working Toward Capturing This Potential $5 Trillion Future Market Opportunity

Core Viewpoint - Occidental Petroleum and ExxonMobil anticipate that carbon capture and storage (CCS) could evolve into a significant global market, with estimates ranging from $3 trillion to $5 trillion by the future, and ExxonMobil projecting a $4 trillion market by 2050 [1][2]. Group 1: Company Initiatives - Occidental Petroleum has signed a deal with XRG to evaluate a joint venture for a direct air capture (DAC) facility in South Texas, with potential investment of up to $500 million to capture 500,000 tonnes of carbon dioxide annually [4]. - The company is progressing on its first DAC facility, STRATOS, in West Texas, which is set to begin commercial operations this year and will also capture 500,000 tonnes of carbon dioxide per year, supported by a $550 million investment from BlackRock [5]. - Occidental has received up to $650 million in funding from the U.S. Department of Energy to support the development of its South Texas DAC hub, which has the potential to remove up to 30 million metric tons of carbon dioxide annually [6]. Group 2: Commercial Agreements - Occidental has commercialized its DAC technology by selling carbon removal credits, including a significant agreement with Microsoft to sell 500,000 metric tons of credits over six years, marking the largest single purchase of such credits [8]. - The company has also signed agreements with AT&T, Amazon, and TD for carbon credits, and a 25-year agreement with CF Industries to store 2.3 million metric tons of carbon dioxide per year at its Pelican Sequestration Hub in Louisiana [10]. - In 2022, Occidental entered an agreement with SK Trading International to supply up to 200,000 barrels of net-zero oil over five years, offsetting lifecycle emissions through carbon injection [9]. Group 3: Future Outlook - Both Occidental and ExxonMobil believe that their commercial agreements are just the beginning, with Occidental projecting that earnings from CCS could match current oil and gas earnings, while Exxon sees CCS as a potential multibillion-dollar business [12]. - Occidental is actively seeking funding partners and commercial agreements to expand its CCS platform, which could create significant value for investors if the CCS market develops as anticipated [13].