Occidental Premium Oxy Low Carbon Ventures sent the 2 million barrels to Reliance Industries in a shipment for which greenhouse gas emissions associated with the entire crude lifecycle were completely offset, from well head through combustion of end products.
The shipment, produced in the vast Permian shale basin, constitutes the first step in what the company calls the development of net-zero oil involving the industrial-scale capture and sequestration of atmospheric CO2. Occidental has announced its intention to engage in net-zero oil production.
“We are taking important initial steps to work with our customers in hard-to-decarbonise industries to offer carbon-neutral and other low-carbon products that will leverage our expertise in carbon management to lower their total carbon impact and address Scope 3 emissions,” Richard Jackson, President of Oxy Low Carbon Ventures, said on the company website.
Occidental last year became the first U.S. based international energy company to announce an ambition to achieve net-zero greenhouse gas emissions associated with the use of its products by 2050.
The company believes its broad experience in enhanced oil production, including the injection of CO2 into oil wells and its work with the technology of carbon capture will help it work towards reduced emissions.
The company has already pointed out that it is taking greater action to reduce greenhouse gas emissions than Tesla, the manufacturer of electric vehicles. It says its actions have achieved a reduction in annual emissions equivalent to four million cars.
The oil delivery deal was arranged and structured by the Australian investment bank Macquarie Group. Compensation for the emissions was achieved through various projects overseen by the company.
Platts Analytics noted last month that rising demand for low-carbon oil could have an effect on prices on markets. The market, it said, could start to view carbon intensity as an attribute of oil in the same way sulfur content is viewed.
“Sulfur devalues crude roughly in line with its prevalence in the oil, all else equal. Likewise, the market could come to devalue crude produced at a relatively high rate of emissions,” the Platts Analytics report said.
