Occidental Petroleum Is Rebuilding Big Oil for a Carbon-Constrained Future

Occidental Petroleum is quietly morphing from a classic oil major into a carbon-management and low?carbon fuels platform. Here’s how its tech, assets, and strategy stack up against rivals.

The New Problem Occidental Petroleum Is Trying to Solve

Occidental Petroleum is no longer just another U.S. oil producer trying to squeeze a little more crude out of the Permian Basin. The company now wants to answer a harder question: how do you keep producing hydrocarbons in a world that is rapidly pricing carbon, electrifying transport, and demanding credible decarbonization at scale?

Occidental Petroleum is betting that the answer is not to walk away from oil, but to rewire the entire value chain around carbon management. That means three pillars: a highly efficient upstream business anchored in the Permian; an integrated chemicals and midstream footprint; and, most controversially, an aggressive push into direct air capture (DAC) and carbon capture, utilization and storage (CCUS) through its subsidiary 1PointFive.

This isn’t just branding. Occidental Petroleum is building what it hopes will be an industrial-scale platform for removing and storing CO₂, selling carbon removal credits to corporates that need to hit net?zero targets while using the same geoscience and underground engineering skills it honed in traditional oil and gas. If it works, Occidental Petroleum could become the template for how a legacy hydrocarbon firm survives—and even thrives—in a carbon?constrained economy.

Inside the Flagship: Occidental Petroleum

At its core, Occidental Petroleum remains a vertically integrated energy and chemical producer. The company’s flagship operating engine is its position in the Permian Basin, especially the Delaware and Midland sub?basins, where it operates some of the most prolific unconventional oil and gas assets in North America. Layered on top of that are its Gulf of Mexico deepwater operations, international assets in the Middle East and North Africa, and OxyChem, its chlor-alkali and PVC chemicals business.

What has changed is how Occidental Petroleum is packaging these assets and capabilities as a differentiated product in the global energy market. The company is now explicitly selling three things: secure barrels and molecules, low?carbon intensity operations, and carbon?removal as a service.

1. High?productivity, lower?cost barrels

Occidental Petroleum has spent the last several years rationalizing and deleveraging after its blockbuster acquisition of Anadarko Petroleum. The end result is a leaner, more disciplined upstream portfolio. The company has focused on lowering breakeven prices in its core shale plays through more efficient drilling and completions, longer laterals, and optimized development spacing. That gives Occidental Petroleum resilience in volatile price environments and keeps free cash flow robust enough to support both shareholder returns and a parallel investment in decarbonization technology.

2. A built?in chemicals and midstream advantage

Unlike some pure?play shale producers, Occidental Petroleum also owns OxyChem and significant midstream and marketing infrastructure. OxyChem is a steady cash generator tied to construction, packaging, and industrial demand rather than just crude prices, giving the company a diversified earnings base. The midstream and marketing unit helps Occidental Petroleum move hydrocarbons and manage price exposure, but it also sets up an under?appreciated advantage: this infrastructure and trading expertise can be repurposed to move CO₂, low?carbon fuels, and, ultimately, new molecules like hydrogen and ammonia.

3. Direct air capture and carbon management as a flagship product

The real pivot—and the feature that makes Occidental Petroleum stand out in a crowded oil patch—is its commitment to industrial-scale carbon management. Through its 1PointFive subsidiary and a partnership with technology provider Carbon Engineering, Occidental Petroleum is building large?format direct air capture (DAC) hubs starting in the Permian Basin.

DAC plants pull CO₂ directly from ambient air using chemical sorbents, then concentrate, compress, and either store it permanently underground or integrate it into products like low?carbon fuels. Occidental Petroleum’s model leans on its decades of experience with CO₂ injection for enhanced oil recovery (EOR), as well as its subsurface characterization and reservoir management capabilities.

By combining DAC with secure geological storage, Occidental Petroleum aims to sell verified carbon removal credits to airlines, tech giants, and heavy industry looking for hard?to?abate emissions solutions. It is also exploring using captured CO₂ to produce low?carbon synthetic fuels, positioning itself at the intersection of legacy hydrocarbons and future fuels.

Crucially, these DAC hubs are being designed as modular, replicable infrastructure. If Occidental Petroleum can standardize engineering, drive down per?ton costs, and leverage U.S. tax incentives like the 45Q credit, this carbon?removal product could become a scalable, high?margin business line that is less tied to commodity cycles than traditional oil and gas.

Market Rivals: Occidental Petroleum Aktie vs. The Competition

Occidental Petroleum is not the only energy major trying to reinvent itself, but its strategy diverges in important ways from key competitors such as ExxonMobil and Chevron.

Compared directly to ExxonMobil’s Low Carbon Solutions platform…

ExxonMobil has leaned into carbon capture and storage (CCS) at industrial point sources—think refineries, power plants, and heavy manufacturing—through its Low Carbon Solutions division. Its marquee projects, such as proposed CCS hubs along the U.S. Gulf Coast, focus on capturing CO₂ from emissions stacks and storing it underground.

Occidental Petroleum, by contrast, is putting direct air capture at the center of its low?carbon strategy. DAC is technically harder and more expensive today than point?source capture, but it offers something corporates and policymakers increasingly want: net?negative emissions that can be credibly counted in carbon accounting frameworks. This distinction matters in voluntary and compliance carbon markets, where high?integrity removal credits are expected to command a meaningful premium over avoidance credits.

ExxonMobil’s scale, balance sheet, and integrated refining and petrochemicals footprint remain formidable competitive advantages. But in the emerging market for DAC?based removals, Occidental Petroleum is earlier, more aggressive, and more vertically integrated—from surface plants to deep subsurface storage.

Compared directly to Chevron’s traditional E&P and new energies portfolio…

Chevron has pursued a more diversified new?energies portfolio: renewable fuels, hydrogen, CCS, and renewable power to support its operations. It has also invested in lower?carbon intensity production via methane abatement and flaring reductions across its upstream assets.

Occidental Petroleum’s approach is narrower but deeper. Instead of spreading capital across many new?energy themes, it is concentrating resources on DAC and CO₂ storage where it believes it has a right to win. In its core Permian operations, the company is also pushing digital optimization—leveraging real?time reservoir data, predictive analytics, and automated drilling operations—to keep lifting costs low and emissions intensity falling.

Compared to Chevron’s more gradual evolution, Occidental Petroleum is making a bolder statement: hydrocarbons and carbon removals can coexist within one integrated product stack. If the DAC hubs reach commercial scale at competitive costs, this focus could turn into a moat; if they stumble, the concentration of risk will look far less attractive.

Against pure?play DAC competitors like Climeworks…

Outside the oil majors, companies such as Climeworks have established themselves as early leaders in DAC, with operational plants in Europe and long?term offtake agreements from global corporates. These firms emphasize their greenfield climate?tech credentials and often operate far from traditional hydrocarbon basins.

Occidental Petroleum’s differentiator here is its subsurface and infrastructure stack: it already knows how to drill, inject, monitor, and verify underground CO₂ storage at scale. While climate?tech natives have an edge in modular plant design and brand perception, Occidental Petroleum can potentially move faster on the hardest part of permanent carbon removal—proving long?term, regulated, large?volume storage in deep saline formations and depleted reservoirs.

The Competitive Edge: Why it Wins

On paper, Occidental Petroleum is still an oil and gas company with a chemicals business attached. Under the hood, it is quietly building a different kind of product: hydrocarbons that come bundled with an integrated carbon?management solution.

1. A full?stack carbon platform, not a bolt?on

Many peers treat decarbonization as a compliance cost or ESG line item. Occidental Petroleum is architecting it as a profit center. By designing DAC hubs alongside CO₂ storage and leveraging existing EOR know?how, the company can capture more value from each ton of CO₂ handled—from tax credits and premium offsets to low?carbon fuels and potential licensing of technology and project templates.

This full?stack approach gives Occidental Petroleum a narrative that resonates with both policymakers and large corporate buyers: it can offer contracted, auditable carbon removals with clear custody of the molecule from air to underground formation.

2. Synergy between legacy assets and future growth

Occidental Petroleum’s most controversial bet is that fossil assets can be an advantage, not a liability, in a decarbonizing world. The same geology that made the Permian Basin a prolific oil province also makes it a high?potential CO₂ storage hub. Pipelines designed for hydrocarbons can be repurposed or paralleled with CO₂ lines. Skilled workforces, from reservoir engineers to drillers, can transition from maximizing oil recovery to maximizing CO₂ containment.

That creates a flywheel effect: free cash flow from efficient oil and gas operations funds DAC and storage build?out, which in turn creates new revenue streams that are less sensitive to crude price volatility. Over time, the revenue mix can tilt toward carbon management without stranding the upstream base.

3. Regulatory and incentive alignment

The policy environment in the United States now heavily favors large?scale carbon management through mechanisms like the expanded 45Q tax credit for CO₂ capture and storage, as well as potential state?level incentives and federal procurement of carbon removals. Occidental Petroleum’s DAC and CCUS portfolio is explicitly designed to monetize these frameworks.

Rivals investing in more diffuse low?carbon technologies may struggle to achieve the same capital efficiency. By lining its product roadmap tightly against available incentives, Occidental Petroleum can accelerate returns and de?risk early?stage projects that would otherwise be hard to finance on a purely merchant basis.

4. A credible decarbonization story for hard?to?abate sectors

Airlines, shipping companies, tech giants, and industrial majors are all chasing net?zero targets with limited options for genuine carbon removal at scale. Occidental Petroleum’s proposition—long?term offtake contracts for monitored, reported, and verified DAC?based removals—directly addresses this pain point. It is not simply selling oil; it is trying to sell a future in which using hydrocarbons does not necessarily mean net?adding CO₂ to the atmosphere.

If Occidental Petroleum can deliver on volume, quality, and price for these removals, it will own a premium segment of the carbon market that many competitors are only beginning to explore.

Impact on Valuation and Stock

For investors watching Occidental Petroleum Aktie (ISIN: US6745991058), the key question is how much of this transformation is already priced into the stock—and how much remains optional upside.

As of the latest available trading session data checked across multiple financial sources, Occidental Petroleum’s share price reflects a company that has largely repaired its balance sheet after the Anadarko acquisition and subsequent oil price shock, and that generates solid free cash flow from its core upstream and chemicals businesses. The market is rewarding its capital discipline and shareholder returns program, including dividends and buybacks, while still assigning it a valuation that broadly tracks other U.S. upstream and integrated peers.

The carbon?management story, however, remains a swing factor rather than a fully banked asset. Direct air capture is still early?stage: project execution risk, technology learning curves, policy stability, and the depth of the high?quality carbon removals market all remain open questions. That uncertainty is reflected in how analysts typically model Occidental Petroleum—treating DAC and CCUS as a long?dated call option rather than core earnings.

In practice, that means the success or failure of Occidental Petroleum’s product pivot will increasingly influence its share price trajectory. Clear milestones—like bringing the first large DAC hub to commercial operation, signing multi?year carbon removal offtake agreements with blue?chip customers, demonstrating falling per?ton costs, and securing durable policy support—could progressively re?rate the stock from a cyclical hydrocarbon name to a hybrid energy?and?carbon platform.

If Occidental Petroleum can prove that legacy oil and gas cash flows can be reliably converted into high?margin, scalable carbon?management revenues, the Occidental Petroleum Aktie stands to benefit from multiple expansion and a broader investor base that includes climate?focused and transition?themed funds. If, on the other hand, DAC remains expensive and politically vulnerable, the stock will trade much more like a traditional oil producer with an expensive science project attached.

For now, Occidental Petroleum occupies a rare position: a legacy hydrocarbon major that is not just talking about transition, but actively trying to commercialize a new climate?tech product category at industrial scale. Whether you view that as visionary or risky, it is likely to be one of the most closely watched experiments in the energy transition—and a defining driver of how the company, and its stock, are valued in the years ahead.