Occidental Petroleum has announced an agreement with SK Trading International for the first net-zero oil created by combining crude oil with environmental attributes generated from the sequestration of atmospheric carbon dioxide (CO₂) captured via 1PointFive’s planned large-scale Direct Air Capture (DAC) facility and sequestered in Occidental’s enhanced oil recovery (EOR) reservoirs in the U.S. Permian Basin. SK Trading International expects to convert the net-zero oil into net-zero products. This is one step both companies are taking together to further their net-zero ambitions and commitments to address climate change.

Under the agreement, Occidental Petroleum may provide SK Trading International with an opportunity to purchase up to 200,000 barrels of net-zero oil per year for five years. To produce the environmental attributes that are used for the net-zero oil for this agreement, Occidental plans to inject approximately 100,000 tonnes of captured atmospheric CO₂ volumes per year, which is equal to the expected CO₂ emissions from the entire crude oil lifecycle, including extraction, transportation, storage, shipping, refining, subsequent use and combustion. Net-zero oil, which is compatible with existing refinery infrastructure, can help hard-to-abate industries advance their net-zero commitments by providing an affordable, scalable fuel option that does not contribute to additional atmospheric CO₂.

Source: Occidental Petroleum

1PointFive's first DAC facility, which is expected to be online in late 2024 and also will include pure sequestration, is in the process of being deployed using Carbon Engineering's industrial-scale DAC solution. The facility will extract atmospheric CO₂ and permanently store it deep underground in geologic formations delivering permanent and verifiable carbon dioxide removal.

“Net-zero oil is an important component of the energy transition and provides a critical bridge as society moves to a net-zero economy. As Occidental advances our Pathway to Net Zero, we are excited to partner with SK Trading International and leverage our licensed direct air capture technology and EOR experience to create a new solution for the transportation sector,” said Richard Jackson, President, U.S. Onshore Resources and Carbon Management, Operations, Occidental Petroleum.