From artificial intelligence to direct air capture, Occidental Petroleum Corp. (Oxy) is investing in technologies that improve production rates and help with decarbonization.
The operator is partnering up with companies such as Siemens Energy to spur technological innovation in a bid to produce cleaner energy.
Oxy uses artificial intelligence (AI) to better predict how the company’s shale wells will perform over time. Now, the company is also using AI to optimize artificial lift and steamflood efforts, Oxy CEO Vicki Hollub said during Voices of Innovation at CERAWeek by S&P Global.
“Instead of having engineers needing to adjust injection levels every day, we’re able to now make that happen automatically. So artificial intelligence is happening in a big way…in the oil and gas industry, and I think it’ll get bigger as we go,” she said.
The technologies that Oxy is looking at and investing in are things that the operator wants to build as a part of its core competence.
“Most of what we’re doing can provide cleaner oil and gas. And we’re working to make sure that happens,” she said. “We’ve got a lot of methane reduction initiatives.”
Hollub has frequently said that Oxy is “really in the carbon management business.”
The company believes innovative carbon capture, utilization and sequestration (CCUS) technologies are “very much needed,” she said.
“We’re not just a shale company. In fact, we’re a lot more than a shale company,” Hollub said, noting Oxy holds core conventional assets in the Permian Basin. “In those conventional assets, we’re applying CO2, enhanced oil recovery [EOR] to those assets.”
The company did pilots in shale fields to confirm a CO2 EOR approach would work there too.
“We have this huge footprint in the Permian. We have a network of CO2 pipelines, [and] we have CO2 processing facilities. So our approach to the climate transition then grew out of our 50 years of experience with CO2,” Hollub said.
But, she said, Oxy didn’t have enough CO2 to develop all the resources the company held.
“We found a technology from a company called Carbon Engineering where we could extract CO2 out of the atmosphere,” she said. “There was our additional source of all the CO2 that we needed.”
Technology team up
Oxy saw the technology as a way to not just develop its conventional and unconventional reserves but also to help other companies do the same thing, Hollub said.
The company committed to building a large-scale direct air capture (DAC) carbon facility, which will be owned by Oxy’s subsidiary, 1PointFive.
In March 2022, Oxy announced its plans for a $1 billion DAC hub in the Permian Basin.
“It takes some belief in the technology to be able to make that commitment and to move forward” to get the first facility up and running,” Hollub said during a joint Oxy-Siemens Energy press event at CERAWeek, noting Carbon Engineering has a DAC pilot project in Canada.
“That’s been helpful for us. But you can’t really make technology better until you build it. And then you start working to optimize and to innovate. And it can’t be done unless you do it with partners that have the same commitment [and] have the same vision.”
Even with Carbon Engineering’s method of using high-powered fans to draw air into the processing facility to separate the CO2 through a series of chemical reactions, Oxy needed a suite of technologies to make the facility a reality.
“We’ve got to have the technology necessary to be able to extract CO2 out of the atmosphere and then put it to use and sequester it when customers prefer that,” Hollub said.
One of Oxy’s methane reduction initiatives is with Siemens Energy, and during CERAWeek, Siemens announced that 1PointFive would use Siemens compressor technology at the world’s first large-scale DAC plant being developed in the Permian Basin.
Under the deal, Siemens will supply a motor-driven 13,000 horsepower (hp) fully modular wet gas compressor package and a motor-driven, 8,500-hp dry-gas compressor for the DAC plant. The equipment will compress the captured CO2 for additional processing and pressurize the final product into a pipeline for injection into underground reservoirs.
During the joint press event, Siemens Energy president and CEO Christian Bruch said an estimated 40% of the technologies required to reach net-zero emissions are not yet commercially available.
“It is urgently needed that companies commercialize and demonstrate these types of technologies,” Bruch said. “But innovation comes with implementation, and this requires sometimes courage. Courage to fail. Courage to try things out. Courage to fix things which are not working immediately. And this is why partnership is so important.”
Bruch also said Oxy’s planned “cookie cutter” approach for DAC facilities will help improve the technologies.
“These will be projects which are big scale, which are maybe not so easy to operate sometimes,” he said. “So we have to take our learnings, and this is obviously what we will closely work on together.”
Design one, build many
DAC 1, the first facility, has emerged from the FEED phase. When online, DAC 1 will extract 500,000 metric tons per year of CO2. Captured CO2 will be compressed, processed and pressurized to be injected into underground reservoirs via pipeline.
Moving forward, Oxy envisions facilities designed to pull 1 million metric tons per year of CO2 from the air. When it announced its Permian Basin DAC project a year ago, Oxy also reported plans to develop 35 DAC facilities around the world by 2035.
“We now view this not just as a project. We view this as a mission,” Hollub said. “We believe that our direct air capture technology is going to be the technology that helps to preserve our industry over time.”
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