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Occidental Backs Carbon Dioxide for Unlocking More Shale Oil
03/25/2025
Vicki Hollub: Early pilot tests show potential to double shale recovery
Occidental Petroleum CEO Vicki Hollub says interest in direct air capture (DAC) is growing—something that was far from the case a decade ago.
Speaking Tuesday at the CERAWeek by S&P Global energy conference in Houston, Hollub reflected on Occidental’s early bet on DAC. Around ten years ago, Occidental began working with Carbon Engineering, a Canadian DAC technology firm, while seeking more carbon dioxide to boost recovery from conventional U.S. shale assets. That relationship led to Occidental acquiring the company in 2023 for $1.1 billion.
Since then, DAC has become a core part of Occidental’s strategy. The company has developed major DAC facilities in Texas, including its Stratos plant and the South Texas DAC Hub.
Although DAC is still early in its deployment, depending on cost improvements, Hollub believes the technology could be widespread within five years.
“We just got out of a meeting with a company that's very interested in DAC, one of our peers,” Hollub said. “We've got one of our peers also in the oil industry has visited the DAC (facility), came up to see it. We had a meeting with them, helped them understand it. It's important for us to, as we go forward, to develop the technology, make it commercial, and make it available to be built by others around the world.”
Hollub continues to champion DAC for emissions reduction and as a key tool in enhanced oil recovery (EOR). Occidental has long used CO₂ for boosting production in conventional reservoirs, and she sees the same potential in shale.
“In conventional (assets), we've gotten up to more than 75% of the oil in the reservoir out using CO2. If we hadn't used CO2, that recovery would have been less than 50%, even with water flooding,” she said. “So primary production water flooding couldn't get it to where we've gotten some conventional reservoirs.”
In the Permian’s Midland Basin, Occidental has completed four pilot tests using CO₂ for EOR in shale formations. The early findings are promising.
“The problem is we recover only about 10% of the oil in the shale reservoirs today,” Hollub said. “So having this additional way to get the CO2 out of the shale reservoirs is critically important to the United States. To maintain our energy dependence going forward, we not only need to do that and do it in a big way, we need to do it sooner rather than later.”
She added that she’s heard discussions in Congress about increasing federal tax credits for CO₂-based EOR, potentially aligning them with incentives for carbon capture under the Inflation Reduction Act.
“It's crazy, really, to give more for putting it in a saline reservoir where it does no additional good for the country than for (enhanced recovery),” Hollub said.
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