Press release here https://www.oxylowcarbon.com/news/worlds-first-shipment-of-carbon-neutral-oil
HOUSTON— January 28, 2021 –– Oxy Low Carbon Ventures (OLCV), a division of Occidental (NYSE:OXY) announced today the delivery of two million barrels of carbon-neutral oil1 to Reliance Industries in India. This transaction, which was arranged in conjunction with Macquarie Group’s Commodities and Global Markets group (Macquarie), is the energy industry’s first major petroleum shipment for which greenhouse gas (GHG) emissions associated with the entire crude lifecycle, well head through combustion of end products, have been offset.
This transaction is a first step in the creation of a new market for climate-differentiated crude oil. It is also a bridge to the development of a further differentiated petroleum product, net-zero oil2, which Occidental intends to eventually produce through the capture and sequestration of atmospheric CO2 via industrial-scale direct air capture (DAC) facilities and geological sequestration. The transaction is an example of Macquarie’s commitment to innovation in the environmental products space and to being a leader in energy transition.
The oil was produced in the U.S. Permian Basin by Occidental and delivered to Reliance in India. Macquarie arranged and structured the bundled offset supply and retirement. The offsets were sourced from a variety of projects verified under the Verra Verified Carbon Standard meeting eligibility criteria for the UN’s International Civil Aviation Organization’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). The volume of offsets applied against the cargo are sufficient to cover the expected GHG emissions from the entire crude lifecycle including oil extraction, transport, storage, shipping, refining, subsequent use, and combustion.
This type of transaction, which involves the bundling of high-quality carbon offsets with crude oil, is an immediate executable solution that helps promote investments in longer-term, industrial-scale decarbonization strategies. It is also a step in the furtherance of Occidental’s net-zero ambitions and commitment to addressing climate change today.
Occidental, the first U.S. based international energy company to announce an ambition to achieve net-zero GHG emissions associated with the use of its products by 2050, has been using carbon-dioxide in its enhanced oil recovery operations in the Permian for over 40 years. During this time, it has developed market-leading expertise in carbon capture, utilization and storage (CCUS). In 2019, OLCV made an investment in Carbon Engineering’s Direct Air Capture (DAC) technology and announced plans, through its development company 1PointFive, to proceed with engineering the world’s largest DAC and sequestration plant. This project will utilize Occidental’s existing Permian Basin enhanced oil recovery infrastructure and its market-leading carbon management expertise to permanently sequester captured atmospheric carbon-dioxide. OLCV expects net-zero oil from DAC to be available to customers in 2024.
The two companies also recognize that technology will play an important role in decarbonization of the industry. Occidental and Macquarie both invested last year in Xpansiv, a technology-based environmental commodities platform and exchange, which was leveraged in this transaction. At the same time, Occidental is working with Carbon Finance Labs who has supported this transaction and is developing a differentiated, distributed ledger-based carbon accounting platform for tracking end-to-end lifecycle carbon emissions through commodities supply chains.
“We are taking important initial steps to work with our customers in hard-to-decarbonize industries to offer carbon-neutral and other low-carbon products that will leverage our expertise in carbon management to lower their total carbon impact and address Scope 3 emissions,” said Richard Jackson, President Oxy Low Carbon Ventures.
“Macquarie is delighted to have worked with Occidental in developing this innovative solution. We look forward to continued collaboration with the company on realizing their ambitious carbon-neutral goals.” said Ozzie Pagan, Senior Managing Director for Macquarie in the Americas. “Macquarie is working to lead the energy transition through innovation and investments focused on advancing de-carbonization. We seek to develop, along with our clients, actionable strategies today and sustainable innovations for the future.”
The Very Large Crude Carrier (VLCC) Sea Pearl containing the carbon-neutral oil finished unloading in India today.
About Oxy Low Carbon Ventures
Oxy Low Carbon Ventures, LLC (OLCV) is a subsidiary of Occidental, an international energy company with operations in the United States, Middle East, Africa and Latin America. OLCV is focused on advancing cutting-edge, low-carbon technologies and business solutions that enhance Occidental’s business while reducing emissions. OLCV also invests in the development of low-carbon fuels and products, as well as sequestration services to support carbon capture projects globally. Visit www.oxylowcarbon.com for more information.
About Macquarie
Macquarie is a global leader in environmental products and the energy transition more generally. It was recently awarded a number of awards at the Energy Risk Awards, including 2020 Environmental Products Bank of the Year, 2020 Oil & Products and Derivatives House of the Year and the 2019 Natural Gas/LNG House of the Year. Macquarie is active in both voluntary and compliance carbon markets globally and continues to innovate in the delivery of environmental commodities products and markets. See here for more information.
1 The term “carbon-neutral oil” indicates that Oxy Low Carbon Ventures and Macquarie have engaged in a structured transaction that results in the offset of an amount of carbon dioxide equivalent to that associated with the production, delivery and refining of the crude oil and the use of the resulting product through the retirement of carbon offset credits.
2 The term “net-zero oil” indicates that Occidental produced oil through the abatement of atmospheric carbon dioxide in an amount equivalent to the carbon dioxide associated with the production, delivery and refining of the crude oil and the use of the resulting product.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this release relating to expectations, beliefs, plans or forecasts are forward-looking statements. These statements are typically identified by words such as “potential,” “will,” “would,” “should,” “may,” “plan,” “anticipate,” “believe,” “expect,” “ambition,” “effort” or similar expressions that convey the prospective nature of events or outcomes. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Actual results may differ from anticipated results, sometimes materially, and reported or expected results should not be considered an indication of future performance. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Unless legally required, Occidental does not undertake any obligation to update any forward-looking statements, as a result of new information, future events or otherwise. Material risks that may affect the results of Occidental and its subsidiaries appear in Part I, Item 1A “Risk Factors” of Occidental’s Annual Report on Form 10-K for the year ended December 31, 2019 and in Occidental’s other filings with the SEC.
Contact
Melissa E. Schoeb
713-366-5615
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