Occidental Petroleum Buys Canadian Carbon Capture Startup with USD1.1bn

US oil and gas producer Occidental Petroleum [OXY:US] is set to acquire Canadian startup Carbon Engineering for USD1.1bn, as reported by Reuters on August 15. The acquisition comes after a four-year collaboration between Occidental and Carbon Engineering. Specifically, Occidental has been integrating Carbon Engineering’s direct air capture (DAC) technologies into its Stratos project located in West Texas, which is projected to become the world’s largest DAC plant by 2025. This acquisition is expected to bolster Occidental’s position as a key player in carbon dioxide (CO2) removal from the atmosphere, with plans to establish around 100 DAC technology-based plants.

DAC technology presents an alternative approach to conventional carbon capture methods that are typically implemented at emissions sources like industrial facilities. As this technology is still in its early stages of commercialization, it requires substantial investments to become financially viable. Beyond the Stratos project in west Texas, Occidental intends to deploy Carbon Engineering’s technology in its King Ranch DAC hub in south Texas. Notably, the hub is among the two DAC projects recently chosen by the US Department of Energy (DOE) to receive USD1.2bn in federal funding. Over the next decade, the DOE will allocate a total of USD3.5bn to establish four DAC hubs, with the overarching goal of promoting the commercialization of this technology and driving down its costs.

Sources:

https://www.reuters.com/markets/deals/occidental-petroleum-buy-carbon-engineering-11-bln-2023-08-15/

https://www.bloomberg.com/news/articles/2023-08-15/occidental-to-buy-carbon-engineering-for-1-1-billion-in-cash-llcr78ou?srnd=green

https://www.oxy.com/news/news-releases/1pointfive-selected-for-u.s.-department-of-energy-grant-to-develop-south-texas-direct-air-capture-hub/