Carbon capture and storage

Oxy Attracts World's Largest Investment House to World's Largest DAC Project

New York-based BlackRock will put more than half a billion dollars into Occidental's first direct air capture project, which is now 30% completed.

Artist rendering of the Stratos DAC facility currently under construction in the Permian Basin, Ector County, Texas.
Artist rendering of the Stratos DAC facility currently under construction in the Permian Basin, Ector County, Texas.
Source: 1PointFive/Occidental Petroleum.

Occidental Petroleum (Oxy) is gaining momentum in its effort to attract low-carbon business partners after it announced this week that BlackRock will invest $550 million in its first direct air capture (DAC) project in Texas.

The DAC facility, called Stratos by Oxy and located in the oil-rich Permian Basin region, will be the world’s largest when it begins operations in 2025 with an annual nameplate capture and storage capacity of up to 500,000 tonnes of CO2. Oxy’s announcement said the new funding will advance construction efforts which were said to be 30% complete.

Vicki Hollub, CEO of Oxy, said in a release that the joint venture with BlackRock shows DAC “is becoming an investable technology” and “underscores its importance and potential for the word.”

New York-based BlackRock, the world's largest investment firm with more than $9.4 trillion in assets, will participate in the project via a joint venture inked with Oxy’s 1PointFive subsidiary that was spun up in 2020 to oversee the oil and gas producer’s DAC business.

Larry Fink, CEO of BlackRock, said the DAC facility “represents an incredible investment opportunity” for the firm's clients and “underscores the critical role of American energy companies in climate technology innovation.”

Oxy is among the few large US oil and gas companies spearheading megascale carbon capture projects in an attempt to carve out a significant piece of the emerging carbon credit business. The company has so far signed carbon credit purchase agreements with several big firms including Amazon, Airbus, All Nippon Airways, and two professional sports teams in Houston.

In addition to the Permian facility, Oxy is moving forward with plans to build a second DAC project in south Texas and is in talks with national oil company ADNOC to build one in the UAE. In August, Oxy made more low-carbon news when it announced a $1.1 billion all-cash deal to acquire smaller DAC company Carbon Engineering.