Occidental’s most recent agreement will enhance its carbon capture operations

Occidental Petroleum Acquires Carbon Engineering in $1 Billion Deal

In a major move signaling the growing interest in carbon mitigation among oil majors, Occidental Petroleum has announced its acquisition of Carbon Engineering in a deal valued at over $1 billion. This transaction, slated to close by the end of the year, is set to bolster Occidental’s efforts in developing carbon air capture solutions as clean energy gains prominence in the corporate world.

The partnership between Occidental Petroleum and Carbon Engineering is not entirely new, as the two companies have collaborated on projects in the past. Occidental, a top holding of Warren Buffett’s Berkshire Hathaway, is among the companies actively exploring the capture, use, and storage of carbon as a long-term business venture. The increasing focus on CCUS (Carbon Capture, Utilization, and Storage) is seen as a pivotal component in the larger transition towards clean energy, offering an alternative approach to managing emissions that are difficult to eliminate completely.

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According to Gordon Haskett analyst Don Bilson, the acquisition of Carbon Engineering by Occidental is expected to accelerate the company’s timeline for introducing a global carbon removal offering. This move aligns with Occidental’s existing work through its subsidiary, 1PointFive, in advancing carbon capture technology.

While CCUS projects have gained traction in recent years, the global volume of carbon storage will need to increase significantly in order to limit global warming to below 1.5 degrees above pre-industrial levels. As a result, companies like Occidental are receiving attention from investors and analysts, with Goldman Sachs identifying them as potential beneficiaries of incentives for carbon storage under the Inflation Reduction Act.

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Wall Street is also eyeing other key players in the carbon technology space, including Baker Hughes, Weyerhaeuser, and Bloom Energy, as potential winners amidst the growing emphasis on carbon capture and utilization. To delve deeper into the world of carbon capture and learn about major stocks in this sector, you can read more from CNBC Pro.

Overall, Occidental Petroleum’s acquisition of Carbon Engineering reflects a strategic move towards advancing sustainable solutions in the energy sector and underscores the company’s commitment to addressing climate change through innovative technologies.

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