Occidental Petroleum DAC Strategy, $550 M Black Rock JV, 2.3 MMTPA Sequestration Deal, and 2 Partnerships (2025)

Industry Adoption: Occidental Petroleum’s Carbon-First Strategy Diverges from LNG Expansion

While major energy firms expand into the global Liquefied Natural Gas (LNG) market, Occidental Petroleum has executed a strategic pivot, forgoing LNG investments to establish a first-mover position in the commercial-scale carbon management industry. This decision places the company on a divergent path from peers who are capitalizing on projected U.S. LNG exports of 14.2 billion cubic feet per day (Bcf/d) in 2025. Instead of building liquefaction capacity, Occidental’s 2025 activities are defined by building a business centered on Direct Air Capture (DAC) and Carbon Capture, Utilization, and Storage (CCUS).

The Contrarian Move Away from a $160 B LNG Market

In 2025, with the global LNG market valued at $160.75 billion, Occidental’s absence is a calculated strategic decision, not an oversight. Analysis of the company’s activities reveals no participation in LNG projects, offtake agreements, or infrastructure development. This contrasts sharply with the period between 2021 and 2024, where the company’s focus remained primarily on optimizing its traditional upstream oil and gas portfolio. The shift in 2025 is validated by the divestment of non-core assets, such as the Midland Basin natural gas gathering affiliate, indicating a deliberate reallocation of capital away from traditional midstream gas infrastructure and toward its low-carbon ventures.

Establishing a Carbon Management Business Model

Occidental’s strategy materializes through its subsidiary, 1 Point Five, which is developing the infrastructure for a carbon management economy. This includes securing a joint venture with Black Rock for the STRATOS DAC plant and another with Enbridge for a CO 2 sequestration hub. A pivotal commercial agreement to sequester 2.3 million metric tons of CO₂ annually for a blue ammonia project in Louisiana demonstrates a tangible revenue model. This approach leverages existing expertise in CO₂ handling for Enhanced Oil Recovery (EOR) to create a new service-based business line focused on industrial decarbonization, supported by incentives like the 45 Q tax credit.

$550 M in Capital, Occidental Petroleum Validates Its DAC Commercialization Path

In 2025, Occidental Petroleum secured significant external capital, validating its high-stakes strategy to commercialize DAC technology and build a profitable carbon management business. This influx of third-party investment de-risks the capital-intensive nature of its projects and signals strong market confidence in the long-term viability of its low-carbon model, a clear departure from the project financing structures common in the LNG sector.

Table: Occidental Petroleum 2025 Key Investments and Divestitures

Occidental Petroleum 2 Key Alliances, Enbridge and Black Rock (2025)

Occidental’s 2025 partnerships are exclusively concentrated on creating the physical and financial infrastructure for its carbon management business, with a complete absence of LNG-related alliances. These collaborations are structured to build out CO 2 transportation and sequestration hubs and to secure the funding necessary to scale its DAC technology. This targeted approach contrasts with the broader, more diversified partnership ecosystems pursued by competitors active in both traditional energy and renewables.

Enbridge JV for CO 2 Infrastructure

A pivotal 50/50 joint venture was formed with Enbridge on November 7, 2025, to develop a CO 2 sequestration hub. This partnership combines Occidental’s expertise in geology and reservoir management with Enbridge’s extensive experience in pipeline development and operations. The collaboration is designed to create a large-scale, cost-effective network for transporting and permanently storing CO₂ captured from industrial sources and Occidental’s own DAC facilities. This move is foundational to creating a viable, service-oriented carbon management business on the U.S. Gulf Coast.

Black Rock JV for STRATOS DAC Plant

The joint venture with a fund managed by Black Rock to develop the STRATOS DAC plant represents a critical financial and strategic partnership. Black Rock’s $550 million commitment not only provides a substantial portion of the required capital but also serves as a powerful market signal validating the commercial potential of DAC technology. This alliance structure allows Occidental to de-risk the project and accelerate its development, positioning the company as a leader in atmospheric carbon removal.

US Gulf Coast Focus, Occidental Petroleum Cements Carbon Hub Strategy

Occidental’s geographic focus in 2025 consolidated around the U.S. Gulf Coast, specifically Texas and Louisiana, as the epicenter for its carbon management enterprise, while maintaining and optimizing valuable international production assets. This regional strategy leverages the area’s unique combination of dense industrial emissions sources, favorable geology for sequestration, and existing energy infrastructure. This represents a significant geographic concentration compared to the more globally dispersed operational footprint typical between 2021-2024.

• The selection of the U.S. Gulf Coast is strategic for developing sequestration hubs like the one planned with Enbridge. The region’s geology is well-suited for permanent CO₂ storage, and its concentration of industrial facilities, including refineries and chemical plants, provides a large addressable market for decarbonization services.
• A commercial agreement to transport and sequester CO₂ for a major blue ammonia facility in Louisiana anchors the regional strategy. This project serves as a commercial proof point, demonstrating the viability of the entire carbon capture and storage value chain in the area.
• While the carbon management business is centered in the U.S., Occidental continues to secure its long-term resource base abroad. The May 2025 agreement to extend operations at Block 53 in Oman ensures continued hydrocarbon production, which funds the low-carbon transition and can be made more carbon-efficient through EOR.

Technology Maturity: Commercializing DAC While Forgoing Mature LNG Tech

In 2025, Occidental’s technology strategy is defined by its commitment to scaling nascent Direct Air Capture technology to commercial viability, a stark contrast to the industry’s widespread deployment of mature and de-risked LNG liquefaction technology. This focus on pioneering a new technology category, rather than competing in an established one, underscores a corporate appetite for higher technical risk in pursuit of a durable, long-term competitive advantage in a decarbonizing world.

• The STRATOS project, backed by Black Rock, is the centerpiece of Occidental’s effort to prove DAC can be scaled and operated economically. Success hinges on moving the technology from the pilot phase, which characterized the period up to 2024, to a large-scale industrial process capable of capturing significant volumes of atmospheric CO₂.
• The company is leveraging its long-standing expertise in using CO₂ for Enhanced Oil Recovery as a technological bridge. EOR provides a current, revenue-generating use for captured CO₂, helping to underwrite the cost of CCUS infrastructure while the market for pure sequestration and carbon credits matures.
• Occidental’s investment in ventures like Carbon Upcycling, which incorporates captured CO₂ into concrete, shows a strategy to create value from captured carbon beyond sequestration. This approach diversifies the business model and creates markets for CO₂ as a feedstock, improving the overall economics of the carbon capture process.

SWOT Analysis, Occidental Petroleum Strengths and Execution Risks

Occidental’s strategic pivot in 2025 away from LNG and toward carbon management has reshaped its risk profile and competitive positioning. This analysis evaluates the strengths, weaknesses, opportunities, and threats associated with its focused, high-stakes strategy based on events and conditions observed from 2021 through 2025.

Table: SWOT Analysis for Occidental Petroleum’s Carbon Management Strategy

Scenario Modelling: 1 Point Five Must Secure More Offtake Deals to De-Risk Its Model

The critical factor for Occidental Petroleum’s strategy going forward is its ability to convert its technological and infrastructure investments into a portfolio of bankable, long-term revenue streams. The success of its subsidiary, 1 Point Five, depends on signing additional large-scale CO₂ sequestration and transportation agreements with industrial emitters. Without these commercial offtake deals, the significant capital invested in DAC and sequestration hubs remains speculative.

• If 1 Point Five announces two or more sequestration agreements similar in scale to the 2.3 MMTPA blue ammonia deal, watch for an accelerated final investment decision on the sequestration hub with Enbridge. This would signal that market demand is solidifying and that the service-based model is gaining commercial traction beyond a single anchor client.
• If construction and operational milestones for the STRATOS DAC plant are met on or ahead of schedule, expect increased investor interest and potentially new partnerships for subsequent DAC facilities. This would validate the technical scalability and project execution capabilities, de-risking future investments in the technology.
• If there are proposed or enacted changes to the 45 Q tax credit or related carbon policies, observe Occidental’s public statements and capital allocation plans closely. The financial viability of these projects is highly sensitive to the regulatory framework, and any instability could slow or halt development.
• If competitors begin to announce large-scale DAC or CCUS hub projects, this could be a sign that Occidental’s strategy is being validated by the broader market. This would increase competition but also help build the overall market and supporting infrastructure for carbon management services.

The questions your competitors are already asking

This report covers one angle of Occidental Petroleum’s pivot to carbon management. The questions that matter most depend on your work.

• Other oil companies investing in carbon capture
• Profitability of direct air capture plants
• Carbon capture offtake agreements signed
• Status of 45Q tax credit legislation

This report does not answer these. Enki Brief Pro does.

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