Occidental Secures CO₂ for Permian Oil Recovery
Long-term agreements with two project developers will supply carbon dioxide from Delaware Basin gas processing facilities to Occidental's enhanced oil recovery operations.
Updated on Nov. 9, 2026 in Oil and Gas
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Occidental has signed long-term agreements with two companies to secure CO₂ captured from third-party natural gas processing facilities in the Delaware Basin. The CO₂ will be used in Occidental's enhanced oil recovery operations in the Permian Basin.
Why it matters
Reliable, long-term CO₂ supplies support Occidental's advanced recovery strategy aimed at extending the productive life of existing fields. The agreements also diversify Occidental's CO₂ supply and build infrastructure that can connect additional carbon capture projects over time.
The two projects are expected to capture and transport about 2 million metric tons of CO₂ annually, with potential to expand to 4 million metric tons per year combined. Both figures remain contingent on final investment decisions.
The players
Occidental Petroleum
Occidental Petroleum is a Houston-headquartered oil and gas company that uses enhanced oil recovery techniques, including CO₂ injection, in the Permian Basin.
The details
The two project developers will fund and build the infrastructure to capture, transport and deliver the CO₂ to Occidental, including nearly 100 miles of new pipeline in the Delaware Basin. The pipelines connect to the existing CO₂ network supplying the Permian Basin and are designed with extra capacity so other industrial CO₂ sources can interconnect.
Timeline
November 9, 2026: Occidental announced the signed CO₂ offtake agreements.
2029: Initial CO₂ shipments to Occidental are anticipated.
Market Landscape
The agreements extend the Permian Basin's existing CO₂ pipeline network into the Delaware Basin, adding new captured-CO₂ supply to a system already serving enhanced oil recovery. The arrangement positions Occidental to secure supply for its own recovery operations while building shared infrastructure open to other industrial emitters.
For Texas residents, the projects aim to add carbon dioxide capture and pipeline infrastructure in the Delaware Basin rather than direct consumer price changes. Any effect on fuel costs or local jobs is not addressed in the announcement.
The takeaway
Carbon dioxide captured from industrial sources is being routed into existing oil fields, a model that depends on pipeline buildout and long-term supply contracts. Whether the projects reach final investment and the 2029 start date will show how quickly that model scales.
What happens next
Final investment decisions on the two CO₂ projects are pending, and initial shipments to Occidental are anticipated in 2029.
Further reading
For more on the sector, see Oil and Gas coverage across Texas.
Source note: This article includes information reported by The Manila times.
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