Occidental Petroleum integrates AI for advanced oil recovery and carbon capture

In the United States, specifically in Texas, Occidental Petroleum is advancing its oil recovery techniques by utilizing artificial intelligence. Chief Executive Vicki Hollub revealed that the company is developing digital twins of oilfields in the Permian basin, which have produced oil for decades. By incorporating millions of data points collected from thousands of sensors, these digital models will allow engineers to simulate strategies for effective carbon dioxide (CO2) injection while extracting oil that can be categorized as ‘net-zero-carbon’. This approach addresses the estimated 2 billion barrels of oil still encased deep underground, highlighting the necessity for innovative extraction methods to maintain the country’s oil production levels. The importance of CO2 oil recovery techniques lies not only in the extraction of fossil fuels but also in the environmental implications. When CO2 is injected into these reservoirs, it effectively displaces oil and stays trapped in the rock, providing a potentially sustainable way to mitigate emissions while continuing to harness energy resources. Hollub emphasized that without such advancements, U.S. oil output may face steady declines, jeopardizing the country’s energy security and the goals proposed during President Donald Trump’s administration regarding energy dominance. To further its carbon capture initiatives, Occidental Petroleum has made investments to establish new technology. This summer, the company plans to inaugurate a CO2 extraction facility in Odessa, Texas, under a joint venture worth $550 million with BlackRock. The facility will utilize technology from Canadian startup Carbon Engineering, which Occidental acquired in 2023. The process relies on potassium hydroxide to react with and capture CO2 directly from the atmosphere. Furthermore, the current legislative environment—prompted by the 2022 Inflation Reduction Act—offers tax credits of up to $180 per ton for CO2 sequestered underground, although actual recovery costs remain higher. Occidental's push toward more aggressive and innovative solutions in carbon capture and oil extraction reflects an industry trend where companies acknowledge the need to adapt to a rapidly changing global regulatory landscape. Key players like Berkshire Hathaway, with significant cash reserves, have engaged in these eco-friendly investments, showcasing a growing inclination toward sustainability in energy operations. Despite challenges faced on financial fronts, these strategies may prove critical for companies like Occidental to navigate future market conditions and maintain competitive positioning as the industry shifts toward greener practices.