American Oil and Gas Reporter - September 2022 - 56

SpecialReport: Permian Powerhouse
Occidental has 16 gross operating rigs in the Midland and Delaware basins. To simplify
its supply chains and reduce truck traffic, the company has created a logistics and
maintenance hub in Carlsbad, N.M., that supports drilling and completion activities.
Combined Permian Portfolio
Occidental is one of the largest acreage
holders and a leading producer in the
Permian Basin.
" With a position of approximately 2.8
million net acres in Texas and New Mexico,
our combined Permian Basin portfolio
of conventional and unconventional
acreage differentiates us from our competitors, "
says Richard Jackson, president
of onshore resources and carbon management
for Occidental.
Oxy has 16 gross operating rigs in the
Midland Basin and on both the Texas
and New Mexico sides of the Delaware
Basin. Its projected third-quarter production
in the Permian Basin is 523,000533,000
boe/d.
" Occidental manages its Permian
Basin operations through two business
units: Oxy's Permian Resources, which
includes unconventional opportunities,
and Oxy's Permian EOR, which utilizes
enhanced oil recovery techniques such
as waterfloods and carbon dioxide
floods, " explains Jackson. " Occidental
has a leading position in the Permian,
producing about 9% of total oil in the
basin throughout 2021. By exploiting
the natural synergies between both its
business units, Occidental is able to
deliver unique short- and long-term advantages,
efficiencies, and expertise
across its operations. "
Oxy's Permian Resources' unconventional
oil development projects provide
56 THE AMERICAN OIL & GAS REPORTER
very short-cycle investment paybacks, averaging
less than two years, according to
Jackson.
" These investments contribute cash
flow, while increasing long-term value
and sustainability through higher return
on capital employed, " he claims. Occidental's
oil and gas operations in the
company's Permian Resources " include
approximately 1.4 million net acres. In
2021, well design processes, technologies
and logistics improvements drove increased
operational efficiencies, which
helped lower the overall well cost while
improving recovery. "
Overall, Oxy Permian Resources produced
from approximately 6,000 gross
wells in 2021 and added 222 million boe
to Occidental's proved reserves through
development and extensions of proved
areas, he adds.
Meanwhile, the Permian Basin's concentration
of large conventional reservoirs,
favorable CO2 flooding performance, and
the expansive CO2 transportation and
processing infrastructure results highvalue
enhanced oil production, Jackson
points out.
" With 35 active CO2 floods and more
than 50 years of experience, Occidental
is the industry leader in Permian Basin
CO2 flooding, which can increase ultimate
oil recovery by 10%-25%, " he continues.
" Technology improvements, such as the
recent trend toward vertical expansion of
the CO2 flooded interval into residual oil
Aventine Hub
Located outside Carlsbad, N.M., Occidental's
Aventine is the first integrated
logistics-and-maintenance hub in the Permian
Basin, bringing facilities for sand,
drilling services and equipment, and cement
together in one facility.
" The hub's central location has increased
transportation efficiency and reduced heavyhaul
traffic, eliminating more than 4 million
miles of truck traffic since operations began, "
Jackson relates. " Aventine produces
a competitive advantage by giving our operations
real-time, cost-effective access to
mission-critical supplies. "
Jackson says the Permian is a critical
part of Oxy's long-term corporate strategy,
which includes a leadership position with
carbon capture, utilization and storage
(CCUS) and carbon management.
Speaking at the company's 2022 Low
Carbon Ventures Investors update last
spring, Chief Executive Officer Vicki
Holub said Occidental has spent years
developing its strategy and building its
CCUS platform that supports a future
net-zero economy.
" A central part of that plan is direct air
capture, which is critical to meeting Paris
agreement targets, by enabling rapid emission
reduction and low-carbon product
development, " she explained. " Another
zone targets, continue to yield more recovery
from existing projects. "
Oxy's Permian EOR unit produced from
14,100 gross wells in 2021, and Jackson
says the Permian EOR business consists of
approximately 20,000 gross wells (injectors,
producers, idle and active wells, EOR waterflood
wells and CO2 water-alternatinggas
wells). The company stores up to 20
million metric tons of CO2 annually.
" Currently, the CO2 in our operations
primarily comes from natural underground
sources, with an increasing volume coming
from anthropogenic sources, " he offers.
" Over time, our plan is to utilize larger
volumes of anthropogenic CO2 captured
from industrial sources and from direct
air capture. By utilizing anthropogenic
CO2 in the EOR process, we have the capability
to produce net-zero or even negative
oil. Oxy has more than five decades
of experience in utilizing CO2 EOR in
the Permian. "
American Oil and Gas Reporter - September 2022

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