Occidental Enters into Agreement to Acquire Direct Air Capture Technology Innovator Carbon Engineering
15 Agosto 2023 - 5:15PM
Occidental (NYSE: OXY) today announced that a wholly owned
subsidiary has entered into a definitive purchase agreement to
acquire all the outstanding equity of Carbon Engineering Ltd. for
total cash consideration of approximately $1.1 billion, to be made
in three approximately equivalent annual payments, with the first
at closing. This transaction is expected to close before the end of
2023, subject to Canadian court reviews, Canadian and U.S.
regulatory approvals and other customary closing conditions.
Occidental has been working with Carbon Engineering on direct
air capture (DAC) deployment since 2019. Acquiring Carbon
Engineering aligns with Occidental’s integrated net-zero strategy
and provides Occidental, through its 1PointFive subsidiary, the
opportunity to rapidly advance DAC technology breakthroughs and
accelerate deployment of DAC as a large-scale, cost effective,
global carbon removal solution. Carbon Engineering’s DAC-based
climate solutions utilize standardized processes and proven
industrial equipment.
“We expect the acquisition of Carbon Engineering to deliver our
shareholders value through an improved drive for technology
innovation and accelerated DAC cost reductions. The technology
partnership also adds new revenue streams in the form of technology
licensing and royalties. Importantly, the acquisition enables
Occidental to catalyze broader development partnerships for DAC
deployment in the most capital efficient and valuable way,” said
Occidental President and CEO Vicki Hollub.
“We look forward to continuing our collaboration with the Carbon
Engineering team, which has been a leader in pioneering and
advancing DAC technology,” Hollub said. “Together, Occidental and
Carbon Engineering can accelerate plans to globally deploy DAC
technology at a climate-relevant scale and make DAC the preferred
solution for businesses seeking to remove their hard-to-abate
emissions.”
Upon closing, Carbon Engineering would become a wholly owned
subsidiary of Oxy Low Carbon Ventures. Carbon Engineering’s
personnel will continue to drive ongoing DAC technology development
efforts and work closely with the Occidental and 1PointFive teams
to bring DAC solutions to market. Carbon Engineering’s research and
development activities and Innovation Center will remain in
Squamish, British Columbia.
“We have always believed that global partnerships and
cross-industry collaboration would be required to deploy DAC
infrastructure at the scale required to make a climate-relevant
impact. Carbon Engineering and Occidental have been working
increasingly close together for the past five years to address the
CO2 problem, making Occidental a trusted and committed partner for
this next chapter in Carbon Engineering’s journey,” said Carbon
Engineering CEO Daniel Friedmann. “At the core of this deeper
relationship is the commitment to invest in the development of our
technology here in Canada, and the global reach to accelerate
implementation of DAC-based climate solutions in the U.S. and
around the world.”
1PointFive is building Stratos, the world’s largest DAC plant,
which is expected to be commercially operational in mid-2025, in
Ector County, Texas. Occidental and Carbon Engineering are also
adapting Stratos’ front-end engineering and design study for a DAC
plant to be built at King Ranch in Kleberg County, which is part of
the South Texas DAC Hub that was selected to receive a grant from
the U.S. Department of Energy’s Office of Clean Energy
Demonstrations.
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. Visit oxy.com for more information.
About 1PointFive
1PointFive is a Carbon Capture, Utilization and Sequestration
(CCUS) platform that is working to help curb global temperature
rise to 1.5°C by 2050 through the deployment of decarbonization
solutions, including Carbon Engineering's Direct Air Capture (DAC)
and AIR TO FUELS™ technologies alongside geologic sequestration
hubs. More at 1PointFive.com.
AIR TO FUELS™ is a registered trademark of Carbon Engineering
Ltd.
About Carbon Engineering
Carbon Engineering (CE) is a climate solutions company. CE is
focused on the global deployment of large-scale Direct Air Capture
(DAC) technology that captures carbon dioxide out of the atmosphere
so it can be permanently stored deep underground or used to produce
clean, affordable transportation fuels. With its partners, CE is
working to deploy large-scale, commercial DAC facilities in
multiple markets around the globe. More
at carbonengineering.com.
Forward-Looking Statements
This news release contains “forward-looking statements” within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, including those relating
to the completion of the proposed transaction and the expected
benefits thereof, DOE funding’s benefits and related impact on
carbon emissions, Occidental’s and 1PointFive’s deployment and use
of DAC technology and project-related community benefits, which are
based on Occidental’s current expectations, beliefs, plans,
estimates, and forecasts. All statements other than statements of
historical fact are forward-looking statements for purposes of
federal and state securities laws. Words such as “will,” “may,”
“expect,” “plan,” or similar expressions that convey the
prospective nature of events or outcomes are generally indicative
of forward-looking statements. You should not place undue reliance
on these forward-looking statements, which speak only as of the
date of this news release. Unless legally required, Occidental does
not undertake any obligation to update, modify, or withdraw any
forward-looking statements as a result of new information, future
events, or otherwise.
These statements are not guarantees of future performance as
they involve assumptions that may prove to be incorrect and risks
and uncertainties, including those that are beyond Occidental’s
control. Factors that may cause actual results to differ materially
from forward-looking statements include the occurrence of any
event, change or other circumstances that could give rise to the
termination of the arrangement agreement relating to the proposed
transaction, the risk that the necessary court[, shareholder] or
regulatory approvals may not be obtained as a result of conditions
that are not anticipated, risks that any of the closing conditions
to the proposed transaction may not be satisfied in a timely
manner, the failure to realize the benefits of the transaction, the
effect of the announcement of the transaction on the ability of
Occidental and/o Carbon Engineering to retain customers and key
personnel and to maintain relationships with suppliers,
Occidental’s, 1PointFive’s and Carbon Engineering’s ability to
access necessary technology, to develop and employ existing or new
technology on a commercial scale, to access capital, to collaborate
with third parties and customers, and to receive approvals from
regulatory bodies, as well as market conditions, geopolitical
events, and scientific developments. Additional factors that may
affect Occidental’s and 1PointFive’s ability to deploy DAC
technology can be found in Occidental’s public disclosure and its
existing and subsequent filings with the U.S. Securities and
Exchange Commission (SEC), which may be accessed at Occidental’s
website at oxy.com or the SEC’s website at sec.gov. Information
included herein is not necessarily material to an investor in
Occidental’s securities.
Contacts
Media |
Investors |
Eric
Moses713-497-2017eric_moses@oxy.com |
Neil
Backhouse713-552-8811investors@oxy.com |
Occidental Petroleum (NYSE:OXY)
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