Company: OXY-WT
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000797468-25-000029
Chunk: 185

Company: OCCIDENTAL PETROLEUM CORP /DE/
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 185
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 front-end engineering design work and feasibility studies on a number of projects to capture and sequester CO2, either from the atmosphere or from industrial point sources. The profitability of sequestration projects is dependent upon the costs of developing, building and operating sequestration infrastructure, demand for sequestration services from emitters and the availability of certain tax attributes and credits generated from the capture and storage of CO2.

Occidental owns a 41.6% interest in NET Power, which is developing a low-cost, natural gas electric power system that generates near-zero emissions and inherently captures all CO2. NET Power Inc. is currently traded on the NYSE under the symbol “NPWR.” NET Power expects its first utility scale plant, located in the Permian, to begin power generation in the second half of 2027 or the first half of 2028. 

OUTLOOK

Midstream and marketing segment results can experience volatility depending on commodity price changes, demand impacting export sales, the Midland-to-Gulf-Coast oil spreads and Waha-to-Gulf-Coast gas spreads. Gas gathering, processing and transportation results are affected by fluctuations in commodity prices and the volumes that are processed and transported through the segment’s plants, as well as the margins obtained on related services from investments in which Occidental has an equity interest.

Recently, economy-wide cost increases affected various elements of the supply chain. Further increases could increase the cost of sequestration and other low-carbon projects. In 2024, increased interest from third parties in providing sequestration services or purchasing carbon credits indicated a growing market for OLCV products and services.

In August 2022, Congress passed the IRA which contains, among other provisions, certain tax incentives related to climate change and clean energy. Since the enactment of the IRA, the Treasury has released a substantial amount of regulatory and sub-regulatory guidance. However, much of this guidance remains unfinalized, and significant questions persist regarding its application. On January 20, 2025, the Trump Administration issued an executive order that pauses the disbursement of funds appropriated under the IRA. The ultimate impact of the IRA on Occidental’s emerging low-carbon businesses and net-zero pathway will depend on several factors, including the Treasury's statutory interpretations in the final regulatory guidance pending issuance and potential changes to the IRA incentives in future tax legislation.

Approximately $0.8 billion of Occidental’s worldwide capital budget, before contributions from noncontrolling interests, are expected to be allocated to its midstream and marketing