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].

Core Viewpoint - Occidental Petroleum is positioning itself as a leader in the decarbonization movement while diversifying its revenue streams to mitigate oil price volatility [2][3]. Group 1: Carbon Capture Initiatives - Occidental's carbon capture ambitions began in 2019 through a partnership with Carbon Engineering, supported by Bill Gates [2]. - The company plans to invest up to $1 billion in its first large-scale direct air capture (DAC) plant, STRATOS, located in Texas's Permian Basin [2][3]. - In 2023, Occidental acquired Carbon Engineering for $1.1 billion, securing DAC technology ownership [3]. Group 2: 1PointFive Subsidiary - Occidental formed a subsidiary, 1PointFive, to pre-sell carbon credits, aiming to limit global temperature rise to 1.5 degrees Celsius by 2050 [4]. - 1PointFive has already secured a deal with Airbus to sell 400,000 tonnes of carbon dioxide removal credits after STRATOS launches [4]. Group 3: STRATOS Plant and Future Plans - STRATOS is set to launch in mid-2025 with an annual capacity of 500,000 tons, requiring significant infrastructure [5]. - The carbon credits generated can be valued between $500 to $1,100 per metric ton, providing various monetization options [6]. Group 4: Revenue Potential and Partnerships - 1PointFive has struck significant carbon credit deals, including a 10-year agreement with Amazon for 250,000 metric tons [7]. - A deal with Microsoft for 500,000 metric tons over six years could generate between $250 million and $500 million, depending on the price per ton [8]. - If Occidental successfully opens 100 more DAC plants by 2035, the revenue potential could reach billions [8].