Occidental Petroleum Corp. will tie results achieved in the company’s low-carbon business to its CEO’s cash bonus this year, the oil and gas producer said in a securities filing on March 26.
Occidental is setting ambitious climate targets and trying to turn its low-carbon unit into a profitable business after it cut jobs and output last year when the coronavirus pandemic hammered global energy demand.
The company increased the weight assigned to its emissions reductions and low-carbon ventures unit to 30% of CEO Vicki Hollub’s target bonus, according to its proxy filing.
Hollub’s target compensation for the year was reduced by 29% from its pre-COVID-19 levels, the filing said.
Occidental’s carbon capture business could be worth between $2 billion and $5 billion, according to Mizuho Securities analyst Daniel Boyd.
The company before year-end will set medium-term net emissions reduction targets for sometime around 2030, it said in the filing. The targets come after a shareholder proposal and discussions with the shareholder activist group Follow This earlier this year, the company said.
Occidental in November set a target to reach net-zero emissions in its operations before 2040.
It loaded up on debt in 2019 to acquire an oil rival, but has been an early mover among U.S. oil producers in setting net-zero emissions goals. Last year it created the low-carbon group to commercialize pulling CO₂ out of the atmosphere through a process known as direct air capture.
Occidental shares closed 4% higher at $27.76 on March 26. They are up nearly 60% so far this year as oil prices and demand improve from pandemic-driven lows.
Jointly controlled by Norwegian billionaire Kjell Inge Roekke and Britain’s BP Plc, Aker BP was set up in 2016 to focus on oil and gas exploration and production from Norway’s continental shelf.
While Aker initially aimed to tie in discoveries in a wider area to its planned Pecan production systems, it had failed to obtain changes in regulation that would facilitate such an approach, the company said.
Aker BP has discovered an oil and gas reservoir while drilling near its Alvheim field in the North Sea, the Norwegian firm said on Feb. 4.