Occidental DAC Strategy, $12 B Crown Rock Deal, $450 M Low Carbon Budget, and 4 Key Partnerships (2021 to 2026)

Occidental 4 Key Low-Carbon Agreements and Project Shifts (2021 to 2026)

Occidental Petroleum’s engagement with the Liquefied Natural Gas market transformed from being a passive feedstock supplier to an active enabler of low-carbon gas, a strategic shift solidified through key partnerships and projects in 2025. This approach leverages the company’s core upstream production and its leadership in carbon management technologies to create a differentiated position, focusing on decarbonizing the gas value chain rather than owning liquefaction infrastructure.

• Prior to 2025, Occidental’s role in the LNG sector was primarily implicit. As a leading producer in the Permian and DJ basins, its natural gas production served as a major source of feedstock for the growing U.S. Gulf Coast LNG export terminals, but without direct strategic involvement in LNG projects.
• In 2025, the strategy became explicit with a partnership to supply natural gas to the 12 million ton per year Atlantic LNG export facility in Trinidad and Tobago. This move provided a dedicated international demand outlet for its offshore gas resources and marked a direct engagement with a major LNG project.
• A partnership with NET Power further defined this strategy, aiming to use a novel gas-fired power system that captures nearly all CO 2 emissions. This technology provides a pathway to power LNG liquefaction with a minimal carbon footprint, positioning Occidental to facilitate the production of lower-carbon LNG.
• The company’s low-carbon strategy gained international validation through a joint venture exploration with Abu Dhabi National Oil Co. (ADNOC). ADNOC agreed to explore co-investment in Occidental’s STRATOS Direct Air Capture (DAC) facility, signaling market confidence in its carbon management as a service.

$12 B Crown Rock Acquisition, Occidental’s Upstream and Low-Carbon Funding

In 2025, Occidental’s capital allocation strategy was defined by a two-pronged approach: fortifying its upstream gas supply through major acquisitions while channeling significant funds into its capital-intensive carbon capture business. This spending pattern confirms the company’s focus on being a feedstock and decarbonization provider, deliberately avoiding direct capital expenditure on multi-billion-dollar LNG export terminals.

• Occidental executed a $12 billion acquisition of Crown Rock, a strategic move to increase its high-quality inventory in the Permian Basin. This secures a long-term supply of natural gas, the essential feedstock for the expanding U.S. LNG export market.
• The company projected a total capital expenditure of $7.1 billion to $7.3 billion for 2025. Within this budget, approximately $450 million was specifically allocated to its subsidiary, Oxy Low Carbon Ventures, to fund initiatives like the STRATOS DAC facility.
• Financial discipline was demonstrated through planned divestitures and debt reduction. The company announced $950 million in proceeds from asset sales and repaid approximately $7.5 billion in debt, strengthening its balance sheet to support its dual investment strategy.
• Looking ahead to 2026, Occidental anticipates a $1 billion improvement in free cash flow. This is expected as capital spending on large projects like the STRATOS plant begins to decrease, freeing up funds for further debt reduction or reinvestment into its carbon management business.

Oil & Gas E&P Market to Triple by 2035

The chart’s projection of a tripling Oil & Gas Exploration & Production (E&P) market provides the financial and strategic context for Occidental’s $12 billion acquisition of Crown Rock. It highlights the continued perceived value in upstream assets, which helps fund the company’s low-carbon initiatives.

(Source: Precedence Research)

Table: Occidental Strategic Investments (2025-2026)

Occidental Stock Surges 40% in Volatile Market

The chart showing a significant surge in Occidental’s stock price provides a measure of investor confidence in the company’s strategy. This market validation serves as powerful context for the strategic investments detailed in the accompanying table.

(Source: QuantVPS)

Strategic Alliances, Occidental’s NET Power and Carbon Capture Deals

Occidental established a network of strategic alliances in 2025 that moved beyond traditional upstream joint ventures to focus on the technology and infrastructure required for its low-carbon gas strategy. These partnerships are designed to create a defensible market position in decarbonization services for the energy industry, including LNG producers.

• The partnership with NET Power is central to its low-carbon LNG ambitions. By supporting the development of a zero-emission gas power cycle, Occidental is helping create the technology needed to produce low-carbon electricity for liquefaction, with the Atlantic LNG project as a key target.
• A 50/50 joint venture with Enbridge, announced in November 2025, aims to develop a CO 2 sequestration hub on the U.S. Gulf Coast. This provides the critical midstream infrastructure for a large-scale carbon capture and storage market, a service that can be sold to industrial emitters including future LNG facilities.
• International validation for its technology came from an agreement with ADNOC to explore a joint venture for the STRATOS DAC facility. This alliance opens the door to global deployment and collaboration with a major national oil company.
• While pursuing new technology partnerships, Occidental maintained its core upstream strength by renewing a joint venture with Ecopetrol in the Permian Basin, ensuring continued access to the natural gas feedstock that underpins its entire strategy.

Industrial Gases Market to Exceed $136B by 2032

This chart provides context for Occidental’s carbon-focused alliances by highlighting the significant market value of industrial gases, which includes CO2. As NET Power and carbon capture technologies revolve around managing and utilizing CO2, the growth of this market underscores the commercial potential of these strategic deals.

(Source: Persistence Market Research)

Table: Occidental Key Partnerships (2025)

Oil & Gas Majors’ Market Share in 2025

This chart illustrates the competitive landscape among oil and gas majors, providing essential context for Occidental’s key partnerships. It helps the reader understand whether these alliances are aimed at consolidating market share, challenging larger players, or entering new segments.

(Source: Drilling Maps)

US vs. International, Occidental’s Geographic Focus for LNG Enablement

Occidental’s geographic strategy in 2025 became highly focused on two distinct regions: the U.S. Gulf Coast as its hub for large-scale gas supply and carbon management infrastructure, and Trinidad and Tobago as a targeted international project to demonstrate its low-carbon LNG model.

• From 2021-2024, Occidental’s geographic footprint was defined by its status as a top producer in U.S. basins like the Permian. Its connection to LNG was indirect, flowing through the national pipeline network to Gulf Coast export terminals.
• In 2025, the U.S. Gulf Coast became the epicenter of its carbon management strategy. The development of its STRATOS DAC plant in Texas and the CO 2 sequestration hub with Enbridge are designed to serve the dense corridor of industrial emitters and future LNG facilities in the region.
• This domestic activity supports the U.S. LNG boom, which is projected to add approximately 11 Bcf/d of new liquefaction capacity. Occidental’s Permian production is positioned as a primary feedstock source for this expansion.
• Internationally, the company’s activities narrowed to a specific, high-impact project. The gas supply partnership for the Atlantic LNG facility in Trinidad and Tobago provides a direct, offshore-to-LNG value chain where it can potentially integrate low-carbon solutions.

North America to Dominate Oil & Gas Projects

This chart contextualizes Occidental’s geographic focus by showing North America’s projected dominance in oil and gas projects. This market concentration justifies a strategy centered on the US for LNG enablement and infrastructure development.

(Source: Market Research Future)

Occidental’s DAC and CCUS Technology Moves to Commercial Scale

In 2025, Occidental’s low-carbon technology portfolio transitioned from a conceptual framework, primarily centered on Enhanced Oil Recovery, to concrete commercial-scale execution. The construction of the STRATOS DAC plant and the application of Carbon Capture, Utilization, and Storage (CCUS) for low-carbon power generation mark this pivot, though its economic viability remains tied to policy support.

• Between 2021-2024, CCUS was a mature technology within Occidental but largely applied to EOR. Direct Air Capture was in an earlier, pre-commercial phase, with technology and costs being refined.
• The start of construction on STRATOS in 2025 represents the most significant validation point for DAC technology. As the first commercial-scale plant, its success is critical for creating a viable carbon-removal-as-a-service market, including deals like the one secured with Occidental Carbon Capture 2026.
• The partnership with NET Power pushes the application of CCUS beyond EOR and into power generation. This is a crucial step toward decarbonizing energy-intensive industrial processes like LNG liquefaction.
• The technology’s commercial maturity is still developing, as its business model relies heavily on the 45 Q tax credit, which offers up to $180 per ton of captured CO 2. This policy dependence is a key risk factor, as the current capture cost is estimated at $400-$600 per ton.

Global Carbon Capture Capacity to Surge

The chart illustrates the significant growth anticipated in the global carbon capture market, which underpins the strategic rationale for Occidental’s investment and push towards commercializing its Direct Air Capture (DAC) and Carbon Capture, Utilization, and Storage (CCUS) technologies.

(Source: Natural Gas Intelligence)

SWOT Analysis, Occidental’s LNG Enablement Strategy

Occidental’s strategic pivot to an indirect LNG player leverages its established upstream strengths and first-mover advantage in carbon management. However, this unique approach exposes the company to significant policy and market maturation risks that are distinct from those faced by traditional, vertically integrated LNG infrastructure owners.

• The company’s key strength is its premier asset base in the Permian Basin, which provides a massive and low-cost supply of natural gas, combined with decades of experience in CO 2 handling and sequestration.
• A primary weakness is the high capital cost and nascent economics of its DAC technology, which remains heavily dependent on government incentives like the 45 Q tax credit for commercial viability.
• The opportunity lies in creating a new market for premium-priced, low-carbon energy products and carbon management services, positioning Occidental as a critical partner for industries facing decarbonization mandates.
• Major threats include regulatory uncertainty, such as the 2025 pause on new U.S. LNG export terminal approvals, and the risk of policy changes that could undermine the economic model for CCUS and DAC.

Table: SWOT Analysis for Occidental’s LNG Enablement Strategy

U.S. Oil & Gas Market To Reach $717B by 2034

Highlighting the substantial growth forecasted for the U.S. oil and gas market, this chart directly supports the ‘Opportunity’ component of Occidental’s SWOT analysis. It quantifies the primary market for the company’s U.S.-focused LNG enablement strategy.

(Source: Market Data Forecast)

What to Watch, Occidental’s Low-Carbon LNG and 45 Q Tax Credit Reliance

The success of Occidental’s indirect LNG strategy in 2026 will be determined by its ability to secure the first binding commercial agreement for a carbon-neutral gas product. This critical milestone depends almost entirely on continued federal policy support for carbon capture and demonstrated cost reductions at its flagship STRATOS DAC facility.

• If the U.S. government’s pause on new LNG export terminal approvals persists through 2026, it could suppress long-term domestic natural gas demand. Watch for any change in this policy, as it directly impacts the growth assumptions for Occidental’s core upstream business.
• The key signal to monitor is the announcement of the first offtake agreement that pairs Occidental’s natural gas supply with its carbon capture and sequestration services. Such a deal would validate the market demand for a premium, low-carbon energy product and prove the commercial viability of its strategy.
• Progress on technology cost reduction is essential. Occidental must demonstrate tangible progress in lowering the cost of DAC from the current $400-$600/ton range toward its sub-$200/ton target. Any pilot results or engineering updates confirming this trajectory will be a significant catalyst.

Oil & Gas Infrastructure Market to Reach $1.46T

The chart illustrates the massive scale of the oil and gas infrastructure market, which is critical for enabling Occidental’s future low-carbon LNG strategy. This forecast highlights the capital-intensive nature of the venture and the substantial market opportunity Occidental is targeting.

(Source: Global Market Insights)

The questions your competitors are already asking

This report covers one angle of Occidental Petroleum’s strategy for low-carbon gas and LNG. The questions that matter most depend on your work.

• Which upstream producers are gaining or losing ground in the market for differentiated, low-carbon gas supply to LNG projects?
• What is the status of Occidental’s partnership with NET Power? Is the initiative progressing from pilot to commercial deployment for LNG liquefaction?
• What is the outlook for low-carbon gas supply agreements for new U.S. Gulf Coast LNG projects by 2030?
• Which LNG project developers are adopting partnerships with upstream producers, following the model of Occidental’s Atlantic LNG deal?

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

Your question, your angle, your framework. SWOT, PESTL, scenario modelling. The same niche depth, built around the decision your work actually depends on.

Run your first brief in Enki Brief Pro