Jordan Blum, editorial director, Hart Energy: We are here with Vicki Hollub, the president and CEO of Occidental Petroleum. We are honored to have you as Hart Energy's Executive of the Year. Thank you so much for taking the time.
You just closed a few months ago on the CrownRock deal in the Midland Basin. That's obviously a big deal with energy M&A. Just wanted to get your take on how things are going with the acquisition and really just the future of the Permian.
Vicki Hollub, president and CEO, Occidental Petroleum: Well, first of all, thank you so much for the recognition and that really, I think, says a lot about our teams.
The CrownRock acquisition for us was really, really important because it actually generated free cash flow right off the bat. It also improved our inventory with high quality locations. In fact, it improved our less than $40 breakeven locations by 33% and less than $60 by 25%. The other thing it did for us is it helped us to develop a strategy for the Midland Basin that makes it now a core area for us. Previously, we had a much smaller position that we were monetizing through the JV that we had created with Ecopetrol, but now with the CrownRock acreage, that enables us to now think about continuing to develop the Midland Basin and it makes it competitive with the Delaware.
JB: Great. And how do you see that continuing to go in terms of focusing on the Permian, balancing those two basins, extending the lifespan of the Permian for decades to come?
VH: Yeah, the inventory we have is amazing in the Permian, and so now it's going to be a combination. We're going to continue development of the Midland as Crown Rock was doing with the rigs that they had. So we'll keep that activity level there and the Delaware Basin will continue pretty much at the activity level that we've had there. Over time, the Permian is going to continue to be the growth engine for Oxy, though. We have so much inventory that we could develop it, depending on the pace, it could take a couple of decades to develop what we have
JB: Very well. Part of that runway is the argument for net zero oil. Next year you're going to open the first major direct air capture plant Stratos, which I guess is going to be the first of many in the Permian and beyond. Just wanted to get your take on the future and how you see things playing out.
VH: Yeah, we're very excited about Stratos. We'll have it online and creating CO2 by mid next year. It's important to us for a number of reasons, and one of which is the fact that we still have a lot of conventional resources that need CO2 for development. We've also conducted pilots in the Midland Basin for use of CO2 in the shale, and those pilots worked actually better than we thought.
So our Low Carbon Ventures business is building the capability for us to get incremental CO2 that will allow us to create net zero carbon oil. And what that does for the world is creates an opportunity for maritime and aviation to take that oil and generate their fuels for jet fuel for aviation and the fuels for maritime that otherwise would be difficult for them to get. And so we're excited about that strategy. It enables us to also help not only create value for our shareholders through the extension of and development of more reserves out of existing reservoirs using existing infrastructure. It also creates the capability for us to help the United States extend our energy independence.
JB: Great. Well, again, thank you so much for joining us. Really appreciate it. To read and watch more, please visit online hartenergy.com.