A startup developing air carbon extraction technology was sold to an oil giant for $1.1 billion.

A startup developing air carbon extraction technology was sold to an oil giant for $1.1 billion.

Occidental Acquires Carbon Engineering in a Push for Carbon Capture

Image Source: Fortune

In a surprising move that highlights the growing momentum behind carbon capture and sequestration (CCS), Occidental Petroleum Corporation has announced its acquisition of Carbon Engineering. Occidental, a leading US oil producer based in Houston, will pay for the acquisition in cash and expects the deal to close before the end of the year, pending regulatory approvals. This strategic move demonstrates Occidental’s commitment to technology innovation and its drive to accelerate cost reductions in direct air capture (DAC).

Chief Executive Officer of Occidental, Vicki Hollub, expressed her enthusiasm for the acquisition, stating, “We expect the acquisition of Carbon Engineering to deliver value to our shareholders through improved technology innovation and accelerated DAC cost reductions.” This acquisition is a major step forward for Occidental, as it has already been partnering with Carbon Engineering for the last four years. The collaboration aimed at utilizing Carbon Engineering’s technology for the Stratos project, based in West Texas, which is set to become the world’s largest direct air capture plant by 2025.

With the Inflation Reduction Act granting generous tax incentives for CCS technology, Big Oil companies like Occidental and Exxon Mobil Corp. are finding themselves with both the profits and the motivation to invest in these climate solutions. This acquisition marks the second CCS deal made by Big Oil in recent weeks, following Exxon Mobil Corp.’s $4.9 billion purchase of CO2 pipeline operator Denbury Inc. last month. The increasing interest and investment in carbon capture and sequestration further underscore the industry’s realization of the urgent need to combat climate change.

Aside from the Stratos project, Occidental also plans to leverage Carbon Engineering’s technology in its King Ranch DAC hub, which is currently being developed in south Texas. This project recently received financial backing from the Department of Energy, affirming the government’s support for carbon capture initiatives.

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The acquisition of Carbon Engineering by Occidental is a significant development in the push for carbon capture technology. By integrating Carbon Engineering’s expertise into its operations, Occidental is positioning itself at the forefront of climate solutions in the oil and gas industry. As the world continues to grapple with the challenges of global warming and environmental sustainability, the success of initiatives like these will be crucial in mitigating the effects of carbon emissions and transitioning towards a more sustainable future.

Key Points:

• Occidental Petroleum Corporation has acquired Carbon Engineering, a leading provider of direct air capture technology.
• The acquisition aims to drive technology innovation and accelerate cost reductions in carbon capture.
• Occidental has been partnering with Carbon Engineering for four years, utilizing its technology in the West Texas-based Stratos project.
• The acquisition follows a wave of interest in carbon capture and sequestration within the oil and gas industry.
• Occidental plans to incorporate Carbon Engineering’s technology in its King Ranch DAC hub in south Texas, with financial backing from the Department of Energy.
• The move showcases Occidental’s commitment to climate solutions and positions the company for a more sustainable future.