Oxy and Macquarie deliver world's first shipment of carbon-neutral oil

Oxy Low Carbon Ventures (OLCV), a division of Occidental, has announced the delivery of two million barrels of carbon-neutral oil to Reliance Industries in India.

This transaction, which was arranged in conjunction with Macquarie Group's Commodities and Global Markets group (Macquarie), is the energy industry's first major petroleum shipment for which greenhouse gas (GHG) emissions associated with the entire crude lifecycle have been offset.

This transaction is a first step in the creation of a new market for climate-differentiated crude oil. It is also a bridge to the development of a further differentiated petroleum product, net-zero oil, which Occidental intends to eventually produce through the capture and sequestration of atmospheric CO2 via industrial-scale direct air capture (DAC) facilities and geological sequestration.

The transaction is an example of Macquarie's commitment to innovation in the environmental products space and to being a leader in energy transition. The oil was produced in the US Permian Basin by Occidental and delivered to Reliance in India.

Macquarie arranged and structured the bundled offset supply and retirement. The offsets were sourced from a variety of projects verified under the Verra Verified Carbon Standard, meeting the eligibility criteria for the UN's International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

This project will utilise Occidental's existing Permian Basin enhanced oil recovery infrastructure and its market-leading carbon management expertise to permanently sequester captured atmospheric carbon-dioxide.


OLCV expects net-zero oil from DAC to be available to customers in 2024. The two companies also recognise that technology will play an important role in decarbonisation of the industry. Last year, both Occidental and Macquarie had invested in Xpansiv, a technology-based environmental commodities platform and exchange, which was leveraged in this transaction.

"We are taking important initial steps to work with our customers in hard-to-decarbonize 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," said Richard Jackson, President, Oxy Low Carbon Ventures.

"Macquarie is delighted to have worked with Occidental in developing this innovative solution. We look forward to continued collaboration with the company on realizing their ambitious carbon-neutral goals," said Ozzie Pagan, senior Managing Director for Macquarie in the Americas.


"Macquarie is working to lead the energy transition through innovation and investments focused on advancing decarbonisation. We seek to develop, along with our clients, actionable strategies today and sustainable innovations for the future," Pagan added.

The Very Large Crude Carrier (VLCC) Sea Pearl containing the carbon-neutral oil has finished unloading in India. - IANS