Occidental announced an agreement with an affiliate of SK Trading International, a subsidiary of SK Innovation Co. Ltd. for the first net-zero oil created by combining crude oil together with environmental attributes generated from the sequestration of atmospheric carbon dioxide captured via 1PointFive’s planned large-scale Direct Air Capture facility and sequestered in Occidental’s enhanced oil recovery reservoirs in the U.S. Permian Basin. SK Trading International expects to convert the net-zero oil into net-zero products. This is one step both companies are taking together in furtherance of their net-zero ambitions and commitments to address climate change.
Under the agreement, Occidental’s marketing affiliate may provide SK Trading International’s affiliate with an opportunity to purchase up to 200,000 barrels of net-zero oil per year for five years. To produce the environmental attributes that are utilized for the net-zero oil for this agreement, Occidental plans to inject approximately 100,000 tonnes of captured atmospheric CO2 volumes per year, which is equal to the expected CO2 emissions from the entire crude oil lifecycle, including extraction, transportation, storage, shipping, refining, subsequent use, and combustion. Net-zero oil, which is compatible with existing refinery infrastructure, can help hard-to-abate industries advance their net-zero commitments by providing an affordable, scalable fuel option that does not contribute to additional atmospheric CO2.
1PointFive's first DAC facility, which is expected to be online in late 2024 and also will include pure sequestration, is in the process of being deployed using Carbon Engineering's industrial-scale DAC solution. The facility will extract atmospheric CO2 and permanently store it deep underground in geologic formations delivering permanent and verifiable carbon dioxide removal.
“Net-zero oil is an important component of the energy transition and provides a critical bridge as society moves to a net-zero economy. As Occidental advances our Pathway to Net Zero, we are excited to partner with SK Trading International and leverage our licensed direct air capture technology and EOR experience to create a new solution for the transportation sector,”
Richard Jackson, President, U.S. Onshore Resources and Carbon Management, Operations, Occidental
SK Trading International, along with SK Innovation, has declared its 2050 Net Zero Journey and is actively developing its action plans to become net zero and even accomplish it earlier than planned. Under its “Carbon to Green” strategy, the company is transforming its overall portfolio with an emphasis on low-carbon business, and is also pursuing measures to manage Scope 3 carbon emission intensity. The introduction of net-zero oil is well aligned with the company’s net-zero commitments and is expected to not only tackle climate change but also accelerate the company’s sustainable growth.
“We are pleased to be a part of the world’s first carbon emission reduction initiative that is underpinned by processing net-zero oil on a life-cycle analysis basis. We are also thrilled to team up with Occidental, one of the most respected energy companies in the world,” said SUH Sokwon, President & CEO of SK Trading International and President of SK Energy Refinery Business.
He added, “In the midst of energy transition, one of the biggest changes in our time, the sustainable business ecosystem built around net-zero oil and low carbon products will contribute to Global Net Zero efforts in a new way.”
(1) The term “net-zero oil” indicates crude oil combined together with environmental attributes generated through the removal and sequestration of atmospheric CO2 through an EOR process in an amount equivalent to the CO2 associated with the production, delivery and refining of the crude oil and the use of the resulting product.
About Occidental
Occidental is an international energy company with assets primarily in the United States, the Middle East and North Africa. We are one of the largest oil producers in the U.S., including a leading producer in the Permian and DJ basins, and offshore Gulf of Mexico. Our midstream and marketing segment provides flow assurance and maximizes the value of our oil and gas. Our chemical subsidiary OxyChem manufactures the building blocks for life-enhancing products. Our Oxy Low Carbon Ventures subsidiary is advancing leading-edge technologies and business solutions that economically grow our business while reducing emissions. We are committed to using our global leadership in carbon management to advance a lower-carbon world.
About SK Innovation
Established as South Korea’s first oil refining company in 1962, SK Innovation engages in diverse areas of business, including exploration and production (E&P), batteries, and information and electronics materials. It owns SK Energy, South Korea’s No. 1 refining company; SK geo centric, the leader in the domestic petrochemical industry; SK Lubricants, a global lubricants company; SK Incheon Petrochem, a refining and chemical company; SK Trading International, a trader of crude oils and petrochemicals; SK Earthon, South Korea's longest and largest independent exploration and production company; and SK IE Technology, a global information and electronic material solution company. As part of their management system, SK Innovation pursues the maximization of happiness for all stakeholders.