Occidental Petroleum announces net-zero target for greenhouse gas emissions

(Reuters) - Occidental Petroleum Corp OXY.N on Tuesday laid out a target to reduce greenhouse gas emissions at its operations to net zero by 2040, becoming the latest oil and gas company to set long-term climate goals.

Oil and gas producers, under pressure from investors who want to see the industry operate more cleanly, have announced new emissions targets this year even as they have slashed spending and production following a coronavirus-driven plunge in crude prices.

Occidental will provide detail on its net-zero target by the end of November when it releases its sustainability report, Chief Executive Vicki Hollub said on an earnings call with analysts.

Hollub touted an August announcement that a unit of Occidental would finance development of the largest ever facility to pull carbon dioxide out of the atmosphere through a process known as direct air capture. Carbon dioxide from the Permian Basin oil field will be stored underground and used to increase pressure in the oil field and speed up production.

The project will lower Occidental’s oil recovery costs and allow it to partner with companies that need to lower their own carbon footprint, Hollub said.

Royal Dutch Shell has laid out a strategy to reduce greenhouse gas emissions to net zero by 2050. BP plans to increase its renewable power capacity 20-fold by 2030 while reducing its oil output by 40% and diverting more funds to low-carbon investments.

Occidental’s direct air capture project will not require much investment in 2021, Hollub said. The producer will not spend more than $2.9 billion on new projects next year, an amount that would keep its oil and gas output flat.

It posted a bigger-than-expected quarterly loss on Monday and has cut jobs and production this year, piling pressure on a company that took on significant debt to acquire Anadarko Petroleum for $38 billion last year.

Shares dipped to $12.09, down 1.1% in trading on Tuesday.