Crude Summit: Oxy not heard from White House: Update

Adds detail from Hollub interview.

Occidental Petroleum has not directly communicated with the administration of President Joe Biden about US crude markets or the company's decarbonization efforts, despite the White House's support for carbon capture, according to chief executive Vicki Hollub.

"One thing I applaud this administration for is they do believe in carbon capture," said Hollub today at the Argus Americas Crude Summit in Houston, Texas. "The negative thing is, I've never really had a conversation one-on-one with anyone in the administration."

While the Biden administration has recently worked with other governments on coordinated releases of strategic reserves, its relationship with domestic oil and gas producers has appeared more arms-length. Pioneer Natural Resources chief executive Scott Sheffield told Argus in December that he was not aware of a major oil and gas company executive that has heard a call from the White House to raise production amid market tightness.

"We want to be there when they need to talk," Hollub said of the Biden administration. "We want to provide information as needed to help them make decisions about things that because of their schedules and focus there is no way that they can know."

On markets

The continued shocks of Covid-19 and its variants have added uncertainty for producers in recent years, with the Delta and Omicron variants jostling prices last year after a historically difficult 2020. But markets must now adjust to the idea that Covid-19 is here to stay, said Hollub.

"I'm sleeping a lot better these days because Covid is here to stay and there are likely to be other variants," Hollub said. "But we managed to figure out how to deal with it."

With crude prices recently hitting eight-year highs, companies need to direct more resources into exploration in order to stave off the effects of underinvestment, said Hollub, who views a $70/bl price as the best balance between industrial and economic interests.

Powering progess

Occidental has a goal to achieve net zero Scope 1 and Scope 2 emissions from direct power use and operations by 2040, although Hollub said today she is hopeful the company can reach those goals by 2035 as it builds out its 1PointFive direct air capture business.

Occidental will use returns from its decades of operations in the Permian basin in Texas to spur its development of carbon management business opportunities, with consolidation unlikely in the near-term. But consolidation in the US shale sector at large is likely as companies take differing approaches to decarbonization, with some competitors unlikely to stand the test of the transition without a partner, said Hollub.

"There are going to be some companies that do not really have the means to put together a climate transition strategy," she said. "There will be that ESG pressure to either find a way to deal with it, or you no longer have the license to operate."

In 2020 Occidental became the first among major US oil firms to also commit to a net zero goal for Scope 3 emissions resulting from use of its products, with an eye on neutralizing those emissions by 2050.

By Dylan Chase