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Oxy subsidiary gets $550M boost to form new CCUS joint venture

Oxy, which broke ground on its DAC project Stratos earlier this year, has secured a $550 million commitment from a financial partner. Photo via 1pointfive.com

Occidental Petroleum’s direct air capture (DAC) initiative just got a more than half-a-billion-dollar investment from Blackrock, the world’s largest asset management company.

Houston-based Occidental announced November 7 that on behalf of its investment clients, BlackRock has agreed to pump $550 million into the DAC facility, called Stratos, that Oxy is building in the Midland-Odessa area. The investment will be carried out through a joint venture between BlackRock and Oxy subsidiary 1PointFive, which specializes in carbon capture, utilization, and sequestration (CCUS).

A groundbreaking ceremony for Stratos — being billed as the world’s largest DAC operation — was held in April 2023. Construction is scheduled to be completed in mid-2025. The facility is expected to capture up to 500,000 metric tons of carbon dioxide each year.

Among the organizations that have agreed to buy carbon removal credits from 1Point5 are Amazon, Airbus, All Nippon Airways, TD Bank, the Houston Astros, and the Houston Texans.

Occidental says 1PointFive plans to set up more than 100 DAC facilities worldwide by 2035.

Vicki Hollub, president and CEO of Oxy, says the joint venture with BlackRock demonstrates that DAC is “becoming an investable technology.”

“We believe that BlackRock’s expertise across global markets and industries makes them the ideal partner to help further industrial-scale [DAC],” she says.

DAC removes CO2 from the atmosphere then stores it in underground geological formations.

“Occidental’s technical expertise brings unprecedented scale to this cutting-edge decarbonization technology,” says Larry Fink, chairman and CEO of BlackRock.

He adds that Stratos “represents an incredible investment opportunity for BlackRock’s clients to invest in this unique energy infrastructure project and underscores the critical role of American energy companies in climate technology innovation.”

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A View From HETI

Catalyze has secured an $85 million tax equity investment to support the construction and completion of 75 megawatts of solar projects nationwide in 2025. Photo courtesy of Catalyze

Houston-based Catalyze, a developer of independent power systems, announced it has secured an $85 million tax equity investment from RBC Community Investments.

“RBC’s investment in this portfolio demonstrates our commitment to advancing clean energy solutions within local communities,” Jonathan Cheng, managing director at RBC, said in a news release. “We are excited to partner with Catalyze on the strategic deployment of these and future projects.”

The financing will go toward the construction and completion of 75 megawatts of commercial and industrial solar projects nationwide in 2025. Catalyze’s current generation portfolio now totals 300 megawatts of projects in operations and construction.

The transaction will help Catalyze’s existing relationship with RBC, which demonstrates a commitment to advancing renewable energy solutions at scale.

“RBC is a valued financing partner, and we are pleased to further expand our relationship with this latest investment,” Jared Haines, CEO of Catalyze, said in a news release. “This financing enables us to further our mission to bring scalable distributed generation projects to businesses and communities nationwide.”

Catalyze also has other private equity sponsors in EnCap Investments and Actis.

Last May, Catalyze announced that it secured $100 million in financing from NY Green Bank to support a 79-megawatt portfolio of community distributed generation solar projects across New York state.

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