Photo: Illustration; Source: Occidental

Occidental: Low-carbon business earnings could match oil

The chief executive of U.S. oil company Occidental Petroleum has stated that the company’s low-carbon business would generate earnings equal to its oil and gas production business in the coming decades.

Occidental has been an early mover among U.S. oil producers in setting ambitious net-zero emissions goals and last year created a low-carbon group to commercialize pulling carbon dioxide out of the atmosphere through a process known as direct air capture.

Vicki Hollub; Source: Occidental
Vicki Hollub; Source: Occidental

Chief executive and president of Occidental Petroleum Vicki Hollub told analysts on Tuesday: “As part of our low-carbon strategy, we can provide a solution for partners and other industries as well, which is airlines and utilities. Those industries may not have an alternative means to significantly lower their carbon footprint”.

It is worth noting that the impact of severe winter storms in Texas last week that shuttered oil output was temporary, with 90 per cent of Occidental’s oil and gas production and its chemicals business back in operation, Hollub said.

The costs of shutdowns and restarts from the winter storm are not yet quantified. “But the good thing is we see no permanent damage with anything, and the wells are starting back and looking very good”, Hollub added.

According to a Reuters article, the U.S. producer posted on Monday after market close a larger-than-expected fourth-quarter loss despite higher oil and gas prices as an asset sale weighed on results.

Occidental had a pre-tax loss of $1.1 billion in their oil and gas business for the quarter, though that unit had profits of $921 million in the fourth quarter of 2019.

We remain committed to strengthening our balance sheet and transitioned into 2021 with an improved financial position by achieving our 2020 divestiture target, reducing debt and successfully extending debt maturities.

In the fourth quarter, our businesses again outperformed as our teams continue to leverage our technical expertise to mitigate production decline while relentlessly lowering costs. We continue to make progress on our debt structure and have significantly exceeded our cost savings targets while delivering operational excellence across our business.

These decisive financial and operational actions reflect our leadership as a low-cost operator, positioning us for success when market conditions improve“, Vicki Hollub stated in the company’s financial results.

It is worth reminding that Occidental claimed in January that it was doing more than American electric vehicle and clean energy company Tesla to reduce greenhouse gas emissions. In the same month, the company delivered the world’s first shipment of carbon-neutral oil to India.