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

Occidental Petroleum’s Strategic Pivot: Building a Commercial DAC Ecosystem

From Foundational Investments to Operational Readiness

Between 2021 and 2024, Occidental Petroleum established the building blocks for a large-scale Direct Air Capture (DAC) business. The strategy was defined by foundational moves: the landmark $1.1 billion acquisition of technology provider Carbon Engineering and the initiation of its first commercial-scale plant, Stratos, backed by a significant $550 million investment from BlackRock. During this period, the application of DAC was largely centered on a single, ambitious project and future potential, including its use in enhanced oil recovery (EOR). The partnerships formed, such as with ADNOC and Enbridge, were exploratory, aimed at assessing future DAC hubs and CO2 transport infrastructure. This phase was about acquiring capability and proving financial bankability for a first-of-a-kind project.

The period from January 2025 onward marks a distinct inflection point, shifting from construction to operationalization and strategic replication. The key change is the de-risking of the end-to-end value chain. In April 2025, Occidental’s subsidiary 1PointFive secured critical EPA permits for CO2 sequestration in Texas, validating a pathway from atmospheric capture to permanent geological storage. This regulatory green light represents a crucial step toward commercial viability. Furthermore, the acquisition of a second DAC company, Holocene, signals a strategic pivot from reliance on a single technology to building a diversified portfolio. This variety indicates a maturing market approach, where Occidental is developing a repeatable playbook for DAC hub deployment, creating a new opportunity to become a technology-agnostic project developer rather than just a single-project operator. The primary threat remains the high cost and energy intensity of DAC, though this is being addressed through dedicated renewable power projects, like the new solar plant for Stratos.

Capitalizing the DAC Vision

Occidental has deployed significant capital to build its DAC business, moving from acquiring core technology to funding large-scale infrastructure and expanding its technology base. The initial phase saw major investments to acquire Carbon Engineering and fund the flagship Stratos plant. The period since 2025 demonstrates a continued financial commitment, including the acquisition of another DAC developer and dedicated funding for the renewable energy infrastructure required to power these facilities, underscoring a long-term, integrated investment strategy.

Table: Occidental Petroleum’s Direct Air Capture Investments

Forging Strategic Alliances for Scale

Occidental’s partnership strategy has evolved from exploratory agreements to concrete joint ventures aimed at execution. The earlier period focused on collaborations to investigate the potential for DAC and its supporting infrastructure. More recently, these relationships have matured into formal evaluations for new facilities and deeper collaborations on CCUS, signaling a transition from planning to implementation. These alliances are crucial for sharing capital risk, accessing new markets, and integrating DAC into the broader energy system.

Table: Occidental Petroleum’s Strategic DAC Partnerships

The Geographic Epicenter of DAC

The geographic focus of Occidental’s DAC activities has sharpened over time, solidifying the U.S. Gulf Coast as the primary theater for commercial deployment. Between 2021 and 2024, Texas was established as the launchpad with the Stratos DAC plant and the planned Enbridge CO2 hub near Corpus Christi. This was complemented by an exploratory international push into the UAE through the ADNOC partnership.

Since the start of 2025, the concentration in Texas has intensified and matured. The state, particularly South Texas, is no longer just a construction site but a fully-fledged ecosystem, validated by the issuance of the first EPA permits for CO2 injection wells to Occidental. This regulatory milestone makes Texas the leading region globally for a fully permitted DAC-to-sequestration value chain. The proposed joint venture with ADNOC’s XRG for another DAC facility in South Texas confirms this region’s strategic importance, likely due to its favorable geology for sequestration, existing energy infrastructure, and a clear regulatory pathway. While international ambitions remain, the U.S. has demonstrably become the mainstream commercialization hub for Occidental’s DAC strategy. The emerging risk is over-concentration in a single geographic and regulatory environment, though the benefits currently appear to outweigh this concern.

From Construction to Commercial Readiness

The maturity of Occidental’s DAC technology has advanced from a demonstration of intent to a state of operational readiness.

In the 2021–2024 period, the technology was in the first-of-a-kind commercialization phase. The primary validation points were financial and structural: the acquisition of Carbon Engineering provided the core technology, and the $1.3 billion investment in the Stratos plant demonstrated the ability to finance a commercial-scale project. The focus was on engineering and construction, proving that a megaproject of this nature could be physically and financially realized. The partnership with TAE Technologies to explore fusion power highlighted that the technology’s long-term energy needs were still a forward-looking, almost theoretical, challenge.

From 2025 to today, the technology has entered the operational and replication phase. The most significant validation point is regulatory, with the EPA granting permits for permanent CO2 sequestration. This moves DAC from being a capture technology to being part of a complete, viable carbon removal solution. The acquisition of Holocene marks a shift toward a more mature, multi-technology portfolio, de-risking reliance on a single technical solution. Furthermore, the plan to power Stratos with a dedicated solar plant moves the project from a carbon-intensive construction phase to a lower-carbon operational model. This progress signals to investors that the technology is moving beyond the pilot stage and is readying for scalable, repeatable deployment.

SWOT Analysis: Occidental’s DAC Evolution

Table: SWOT Analysis of Occidental’s DAC Strategy

The Year Ahead: From Playbook to Performance

The data from 2025 signals that Occidental Petroleum is no longer just building a DAC plant; it is building a DAC business ecosystem. The year ahead will be less about announcements and more about execution and performance. The primary signal to watch is the operational commissioning of the Stratos plant and the release of its initial performance data—specifically, its capture efficiency, operating costs, and uptime. These metrics will serve as the first real-world validation of the technology at this scale and will heavily influence investor confidence for future projects.

Market actors should pay close attention to the progress of the joint venture evaluation with ADNOC’s XRG in South Texas. A positive final investment decision would confirm that Occidental’s DAC hub model is repeatable and attractive to major international energy partners. The integration of Holocene’s technology should also be monitored, as it will reveal whether Occidental’s strategy is to optimize a single design or deploy different technologies for different applications. The momentum is clearly behind a full-stack, hub-based approach in the U.S. Gulf Coast. The next critical test is proving that this model is not just technically viable and fully permitted, but also commercially scalable.

Frequently Asked Questions

How has Occidental’s strategy for Direct Air Capture (DAC) changed since the beginning of 2025?
Since 2025, Occidental’s strategy has shifted from proving the concept with a single large project (Stratos) to operationalizing and replicating a full DAC ecosystem. Key changes include securing EPA permits for permanent CO2 storage, which de-risks the entire value chain, and acquiring a second DAC company (Holocene) to diversify its technology portfolio and become a technology-agnostic project developer.

Why did Occidental acquire a second DAC company, Holocene, after already buying Carbon Engineering?
The acquisition of Holocene signals a strategic pivot to avoid reliance on a single technology. By building a diversified portfolio of DAC technologies, Occidental mitigates technical risk and can develop a repeatable ‘playbook’ for deploying different types of DAC hubs, positioning itself as a flexible project developer rather than an operator tied to one specific design.

How is Occidental addressing the high energy costs associated with DAC technology?
Occidental is directly addressing the high energy intensity by investing in dedicated renewable power projects. For its flagship Stratos plant, the company is building a $415 million solar plant specifically to power the facility, creating a lower-carbon operational model and tackling one of the primary weaknesses of DAC technology.

What is the most significant validation of Occidental’s DAC business model mentioned in the text?
The most significant validation was securing the first-ever EPA permits for CO2 injection and sequestration wells in Texas in April 2025. This regulatory green light was a crucial milestone that proved the commercial viability of the entire DAC-to-storage value chain, moving the business from a theoretical concept to a fully permitted, end-to-end carbon removal solution.

What are the main offtake markets or uses for the CO2 Occidental plans to capture?
Initially, a key use for the captured CO2 was enhanced oil recovery (EOR). However, the strategy is evolving to include newer, higher-value markets. A recent partnership with United Airlines and Cemvita Factory aims to explore converting captured CO2 into Sustainable Aviation Fuel (SAF), creating a new potential revenue stream.

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