Summary

Occidental Petroleum is unusual among large U.S. oil producers because it is attempting to build a commercial carbon-management business alongside conventional oil and gas.

The strategy is primarily developed through:

Oxy Low Carbon Ventures

↓

1PointFive

↓

Direct Air Capture + CCUS

↓

Carbon Removal Credits and CO₂ Storage

The flagship project is STRATOS, a Direct Air Capture facility in Texas designed to remove up to 500,000 metric tons of atmospheric CO₂ annually when fully operational. Occidental's current carbon-innovation page still describes STRATOS as under development, while 1PointFive said in January 2026 that the facility was progressing through startup activities.

Carbon capture could create a new long-term business for OXY—but it remains capital intensive and commercially uncertain.

What Is Oxy Low Carbon Ventures?

Oxy Low Carbon Ventures, or OLCV, develops projects and technologies related to:

• Carbon capture;
• CO₂ transportation;
• CO₂ sequestration;
• Direct Air Capture;
• Low-carbon fuels;
• Carbon-management services.

Following the OxyChem sale, Low Carbon Ventures remains part of Occidental's Midstream and Marketing reporting segment.

What Is 1PointFive?

1PointFive is Occidental's carbon-capture and carbon-removal subsidiary.

Its business model is intended to help customers address emissions through technologies such as:

Direct Air Capture

and

geologic CO₂ storage.

What Is Direct Air Capture?

Direct Air Capture, or DAC, removes CO₂ directly from ambient air rather than capturing it only at the exhaust stream of a factory.

A simplified process is:

Air

↓

CO₂ capture system

↓

Concentrated CO₂

↓

Permanent geologic storage

or selected utilization pathways

The technology is different from conventional point-source carbon capture.

What Is STRATOS?

STRATOS is 1PointFive's large-scale DAC facility in Texas.

It is designed for capacity of up to:

500,000 metric tons CO₂ per year

when fully operational.

In January 2026, 1PointFive described STRATOS as progressing through startup activities, so investors should not treat full design capacity as already achieved commercial output.

Who Has Purchased STRATOS Carbon Removal Credits?

1PointFive has announced agreements with several large organizations.

For example, Microsoft agreed to purchase 500,000 metric tons of DAC carbon-removal credits over six years from credits enabled by STRATOS.

Bain & Company announced a 9,000-metric-ton purchase over three years in January 2026.

These agreements demonstrate commercial interest, but contracted credit volume should not automatically be treated as equivalent to project profitability.

How Could Carbon Removal Generate Revenue?

Potential customers may pay 1PointFive for verified removal of CO₂.

Conceptually:

Customer emissions target

↓

Purchase carbon-removal credits

↓

1PointFive captures CO₂

↓

Permanent storage

↓

Verified removal credit

This could create a service-style revenue stream separate from selling oil.

Why Occidental Has a Potential Advantage

Occidental has decades of experience handling CO₂ in the oil industry.

Capabilities relevant to carbon management include:

• Subsurface geology;
• CO₂ transportation;
• Injection;
• Reservoir management;
• Large-scale energy infrastructure.

Those capabilities can potentially transfer to carbon sequestration.

Can Carbon Capture Become a Major OXY Business?

Potentially—but that is not guaranteed.

The bull case assumes:

• More corporations commit to durable carbon removal;
• DAC costs fall;
• Government incentives remain supportive;
• Projects scale successfully;
• Carbon-credit prices support attractive returns.

The bear case assumes:

• Costs remain high;
• Demand is insufficient;
• Incentives change;
• Project schedules slip;
• Competing technologies become cheaper.

Why DAC Is Expensive

CO₂ exists at relatively low concentration in ambient air.

Removing it requires:

• Large air-processing systems;
• Energy;
• Chemical sorbents or solvents;
• Compression;
• Transportation;
• Storage.

This can make DAC substantially more expensive than capturing CO₂ from concentrated industrial streams.

Government Policy Risk

Carbon economics can depend partly on:

• Tax credits;
• Permitting;
• Storage regulation;
• Carbon accounting standards.

Policy changes can therefore materially alter project economics.

What Is the Relationship With Oil Production?

Occidental historically has significant expertise using CO₂ for enhanced oil recovery.

However, certain 1PointFive carbon-removal contracts, including Microsoft's, specify durable saline sequestration rather than using the captured CO₂ for oil production.

This distinction matters when evaluating the environmental attributes of specific credits.

Could Carbon Capture Reduce OXY's Oil Dependence?

Over a long period, a successful carbon business could diversify revenue.

But today, Occidental's financial results remain dominated by oil and gas.

Carbon management should therefore be treated as an option on future growth, not a replacement for current upstream economics.

How Does Carbon Capture Affect OXYON?

OXYON does not directly represent STRATOS.

Instead:

STRATOS / 1PointFive

↓

affects Occidental's business value

↓

OXY

↓

OXYON

If investors become more optimistic about the commercial value of carbon capture, that may affect OXY valuation.

If projects disappoint, the opposite could occur.

Main Risks

• Technology execution;
• Capital expenditure;
• Startup delays;
• Carbon-credit demand;
• Customer concentration;
• Regulatory changes;
• Storage liability;
• Competition;
• Uncertain long-term margins.

FAQ

What is STRATOS?

A large Direct Air Capture facility being developed by Occidental's 1PointFive subsidiary.

How much CO₂ can STRATOS capture?

Its design capacity is up to 500,000 metric tons annually when fully operational.

Is STRATOS fully operational at design capacity?

The latest cited 2026 company update described it as progressing through startup activities.

Does Microsoft buy carbon credits from 1PointFive?

Microsoft entered an agreement covering 500,000 metric tons over six years.

Is carbon capture already Occidental's main business?

No. Oil and gas remain the dominant economic business.

Risk Disclaimer

Carbon-management technologies are developing markets. Project capacity, cost, pricing, regulation and commercial demand can differ materially from current expectations.