Occidental Petroleum Hydrogen Initiatives for 2025: Key Projects, Strategies and Partnerships

Occidental’s DAC Gambit: Analyzing the Shift from Strategy to Commercial Scale

Occidental Petroleum has embarked on one of the most ambitious corporate transformations in the energy sector, pivoting from a traditional oil and gas producer to a leader in carbon management. At the heart of this strategy is Direct Air Capture (DAC), a technology designed to remove CO₂ directly from the atmosphere. By examining Occidental’s activities, we can map the rapid evolution of DAC from a conceptual climate solution to a tangible, industrial-scale business. This analysis tracks Occidental’s journey, revealing key inflection points in technology, investment, and global adoption that signal a maturing market.

From Strategic Blueprint to Operational Reality

Between 2021 and 2024, Occidental’s approach to DAC was primarily foundational. The strategy centered on acquiring core technology and securing the financial and logistical partnerships necessary to build its first large-scale plant. The landmark $1.1 billion acquisition of Carbon Engineering in 2023 was a clear signal of intent, internalizing the intellectual property that would underpin its ambitions. This period was characterized by partnerships aimed at building a future ecosystem, such as the 2022 agreement with Enbridge to develop CO₂ transportation infrastructure in Texas and a collaboration with United Airlines to explore DAC-to-jet-fuel pathways. The applications were varied but largely theoretical, focused on potential offtake markets like sustainable aviation fuel (SAF) and enhanced oil recovery (EOR). The primary focus was the construction of the STRATOS plant, a massive demonstration of commercial intent.

The period from 2025 to the present marks a decisive inflection point from planning to execution. The most significant development is the STRATOS facility commencing operations, transitioning DAC from a construction project into an operational asset. This shift has catalyzed a new phase of activity focused on scaling and optimization. The potential joint venture with ADNOC’s XRG to build a *second* DAC facility in Texas demonstrates a move toward a replicable, “copy-and-paste” model for expansion. Furthermore, the range of applications has become more concrete. The 2025 partnership with TAE Technologies to explore fusion energy as a power source for DAC facilities reveals a sophisticated, second-order focus on decarbonizing the capture process itself—a clear sign of a maturing industry addressing operational efficiency and life-cycle emissions. This evolution from a single-project focus to a multi-project, multi-technology portfolio signals that broader adoption is no longer a distant goal but an active, ongoing process.

Investment: Securing the Financial Foundation for Scale

Occidental’s DAC strategy has been underpinned by a series of strategic and high-value investments. These financial commitments have evolved from acquiring foundational technology to securing project-level capital and diversifying the technology portfolio, demonstrating a clear pathway from R&D to commercial deployment. Early-stage investments secured the core technology and flagship project, while more recent moves indicate a strategy focused on scaling and technological enhancement.

Table: Occidental DAC-Related Investments

Partnerships: Building a Global DAC Ecosystem

Partnerships have been the primary vehicle for Occidental to de-risk its DAC strategy, build necessary infrastructure, secure future offtake, and explore international markets. The nature of these collaborations has shifted from establishing a domestic foundation to enabling global replication and technological optimization, reflecting the growing maturity of Occidental’s DAC business unit.

Table: Occidental DAC-Related Partnerships

From a Texas Hub to a Global Blueprint

Between 2021 and 2024, Occidental’s DAC activities were geographically concentrated in the United States, particularly the Texas Permian Basin and Gulf Coast. This region offered a unique combination of favorable geology for CO₂ sequestration, existing energy infrastructure, and a supportive policy environment. The development of the STRATOS plant in the Permian Basin and the partnership with Enbridge for a sequestration hub near Corpus Christi solidified Texas as the epicenter of Occidental’s DAC world. Early-stage MoUs with partners in the UAE (ADNOC) and Oman (OQGN) in late 2023 hinted at global ambitions but remained preliminary.

Since the start of 2025, the geographic strategy has entered a new phase of expansion and replication. Texas remains the operational core, validated by the launch of Stratos and the plan for a second DAC facility in South Texas with ADNOC. However, Occidental is now actively leveraging this proven expertise to establish a footprint in international markets. The 2025 MoU with Sonatrach to explore projects in Algeria and the ongoing work with OQGN in Oman demonstrate a concerted effort to export its carbon management model. This shift shows that DAC is moving from a localized U.S. solution toward a global business line for Occidental, though this expansion introduces new geopolitical and regulatory risks alongside the commercial opportunities.

Technology Maturity: From Acquisition to Operation

In the 2021–2024 timeframe, DAC technology, from Occidental’s perspective, was in a phase of commercial validation. The primary milestone was not invention but acquisition and integration. By purchasing Carbon Engineering in 2023, Occidental took a technology that had been proven at the pilot level and committed to deploying it at an unprecedented commercial scale with the STRATOS plant. The technology was therefore in a pre-operational, large-scale demonstration phase. The ecosystem partnerships formed during this time were all built around the promise of a future, operational asset.

The period from 2025 to today has pushed the technology across a critical threshold into commercial operation. The commencement of operations at STRATOS is the most significant validation point to date for large-scale DAC, moving the technology out of the construction phase and into the operational phase. The immediate plan to build a second plant with ADNOC suggests the technology is now considered commercially replicable and ready for scaling. Simultaneously, Occidental is already pursuing next-generation improvements. The partnership with TAE Technologies to explore powering DAC with fusion energy is a clear signal of a maturing technology. The focus is no longer just on making it work, but on making it cheaper, more efficient, and with a lower life-cycle carbon intensity, which is essential for long-term viability.

Table: SWOT Analysis of Occidental’s DAC Strategy

Forward-Looking Insights: The Path to a Scalable Carbon Business

The most recent data from 2025 signals that Occidental has successfully transitioned its DAC ambitions from concept to reality. The year ahead will be defined by two parallel priorities: proving operational excellence and accelerating global replication. The market should pay close attention to the operational metrics from the STRATOS facility once it begins full CO₂ capture later this year, as this data will determine the economic viability and replicability of the model.

The most powerful forward-looking signal is the ADNOC partnership for a second DAC hub. A final investment decision on this project would be a monumental validation, proving that the model can attract significant international capital and is ready to scale. Concurrently, initiatives like the TAE Technologies partnership and the Holocene acquisition indicate that Occidental is not resting on its laurels. It is actively building “DAC 2.0″—a future where the technology is cheaper, more efficient, and deployable across diverse energy landscapes. Occidental’s journey shows that while the first step was to prove DAC could work at scale, the next, more critical step is to prove it can become a profitable, global business.

Frequently Asked Questions

What is the most significant shift in Occidental’s DAC strategy since the start of 2025?
The most significant shift has been from planning and construction to operational execution and scaling. The key event is the STRATOS facility commencing operations, which has moved the focus toward replicating this model (e.g., the potential second plant with ADNOC) and optimizing the technology’s efficiency (e.g., the fusion energy partnership with TAE Technologies).

Why was Occidental’s acquisition of Carbon Engineering in 2023 so important?
The $1.1 billion acquisition of Carbon Engineering was a critical strategic move because it gave Occidental direct ownership of the core DAC technology. This internalized the intellectual property, securing the technological foundation for its flagship STRATOS plant and all future facilities, turning Occidental from a technology user into a technology owner.

How is Occidental addressing the high energy consumption of its DAC plants?
Occidental is actively working to decarbonize the energy source for its DAC operations. The 2025 partnership with TAE Technologies to explore using fusion energy for emissions-free power and heat is the primary example. This initiative aims to improve the technology’s energy efficiency and lower its overall life-cycle carbon footprint, a key step for long-term viability.

How has the main risk to Occidental’s DAC strategy evolved over time?
The risks have shifted from project-specific to market-level. In the 2021-2024 period, the primary threats were construction delays and cost overruns for the unproven STRATOS plant. Now, with the plant operational, the risks have evolved to include the high energy cost of the technology, competition from other DAC providers, and the geopolitical and regulatory risks associated with global expansion into markets like Algeria and the Middle East.

Is Occidental’s DAC strategy focused only on Texas?
No. While Texas is the operational core where the first plant (STRATOS) was built and a second is planned, Occidental is actively expanding its strategy globally. Recent partnerships, such as the MoU with Sonatrach to explore opportunities in Algeria and ongoing studies with partners in Oman and the UAE, demonstrate a clear effort to export its DAC business model to international markets.

Want strategic insights like this on your target company or market?

Build clean tech reports in minutes — not days — with real data on partnerships, commercial activities, sustainability strategies, and emerging trends.