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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

The company says the deal is part of the “next chapter” in energy management. Photo via Unsplash

Houston-based energy management and consulting firm Infinity Power Partners has been acquired by New York City-based Environ Energy, which also offers energy management and consulting services.

The deal creates a new “anchor segment” for Environ in the multifamily market. With the addition of Infinity Power’s roughly 2,000 clients in the multifamily sector, representing more than 1 million multifamily units under contract, Environ now has more than 8,000 U.S. clients in the commercial real estate, healthcare, manufacturing, education and government sectors.

“This acquisition continues to solidify our presence in key energy markets while aligning with founders who share our deep commitment to client success,” Environ CEO Chris Sternberg said in a news release.

Infinity Power co-founders and managing partners Nick Altman and Peter Selber have joined Environ, a portfolio company of investment firm 424 Capital. Altman and Selber founded Infinity Power in 2011.

“We built our business one relationship at a time,” Selber said, “with a strong commitment to the communities we serve. That same dedication is reflected in Environ’s approach — now delivered at scale.”

Altman says the acquisition is part of the “next chapter” in energy management. Energy management services help commercial customers reduce utility bills, improve equipment life, achieve green energy goals, and decrease risk tied to fluctuating energy prices.

Energy management is a culture for continual improvement of energy performance and efficiency that’s integrated within an organization’s normal business practice,” according to the U.S. Office of Energy Efficiency & Renewable Energy.

In all, Environ has made six acquisitions in the past 17 months.

Last year, Environ acquired another Houston-based energy management and consulting firm, CSD Energy Advisors. In that deal, Environ gained nearly 1,000 clients, including several Fortune 500 companies and three large industrial energy users in Texas. As part of the deal, CSD co-founders Andrew Barth and JB Sowyrda joined Environ.

Also last year, Environ purchased Carrollton-based energy advisory firm Rapid Power Management (RPM).

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