Name: Why This Big Oil CEO is Fighting for Climate Change
Uploaded: 2022-05-10
Duration: 8 min 11 s
Description: Occidental Petroleum's Vicki Hollub says Warren Buffett, her largest shareholder, 'loves our strategy.'

Occidental Petroleum's Vicki Hollub says Warren Buffett, her largest shareholder, "loves our strategy."

Why This Big Oil CEO is Fighting for Climate Change

Leadership

Vicki. So good to see you again. Especially since you've been getting a lot of attention recently as you talk about a big plan for a sustainable future for your company? Occidental Petroleum And it's really surprising because not too many oil company ceo talk about sustainability, Why did you decide to tackle climate change and in a big way? Well, thank you, Susie. I'm so happy to see you again and to be here to talk to you. Um I would say that I'm an environmentalist too and I just happened to be the Ceo of an oil and gas company. I care about the environment and we have the unique capabilities and skills and assets to be able to help mitigate climate change. That's what got us into the where we are and the strategy that we've developed to not only help ourselves to become not carbon neutral but to help others. Well you said not only have a strategy, but you actually have a roadmap to get there. Tell us in simple terms, what are you going to do and um so that we can understand it, our roadmap is to capture CO two before it gets into the atmosphere from industrial site and to also extract co two out of the atmosphere by doing those two things and doing it on a larger scale and doing it across the globe. We believe that we can help mitigate climate change and advanced the technologies that others can use to do it as well. So let me see if I understand this right that once the CO two emissions have been captured, they're going to be stored and perhaps use later to extract more oil from the ground. How is this better for the environment? Well, when we inject CO two into enhanced oil recovery reservoirs to produce more oil, A lot of that co two is sequestered underground as we cycle it through. So ultimately C. 02 is is sequestered but and more C. 02 is to question than what the oil in this when it's actually produced. So it becomes a net zero carbon barrel of oil. You've told investors that you are ready to move fast. So when is your first plant going to be operational? So you can do all these things were very excited that we're going to start construction of it by the end of this year, it will be up and running by 2024. And you've said that you're going to use this technique just not just for occidental, but you'd like to open it up. Two organizations all around the world so that they can achieve net negative emissions. And I understand that United Airlines Shopify are on board for all this. It sounds like you're building an entirely new industry. We certainly believe that we are, we believe that exists because it will happen because many corporations around the world are wanting to become carbon neutral And they don't have any other way to make it happen except to use and by CO2 credits and we can provide that to them with the process that we're developing in the strategy that we're implementing. But that's a big thing. I mean on top of your oil and gas business, your chemical business and all the other things you're doing, you're creating a completely new industry, right, aviation, maritime technology. All of those companies need to have a way to become carbon neutral. We can provide that means for them and we will provide it in a way that creates value for our shareholders too. So it will ultimately create a new industry. Well, for all your optimism, Vicki, a lot of people say that the oil business is a sunset industry. So What occidental going to look like over the next 7-10 years, are we still going to be calling it an oil and gas company or is it going to become a carbon capture technology company? Well, I think we'll be both. We will continue to be produced oil and gas, so we'll continue to do that. But we'll also be um growing our carbon management business. So, ultimately, I think our carbon management business will be larger than our chemicals business and ultimately, maybe even larger than our oil and gas business, but will continue both chemicals and oil and gas development as well. Well, the last sidle up to your oil and gas business with some producing something like almost $20 billion in revenues. And you're saying this new uh carbon neutral business will match that or more? Yes, ultimately. And how does Anadarko Petroleum fit into this vision that you're describing? Uh, it was a very controversial deal when you bought it three years ago. Is that $38 billion price tag paying off now? I certainly believe that it is, um, the Anadarko acquisition brought to us the scale that we needed to, to ensure that we could execute on this strategy plus the scale that we needed in the United States to minimize our geopolitical, um, exposure in our international operations. So the bulk of the value of the company now is in the United States and it's delivering a lot of cash flow and income for us now. Well, it looks like Warren Buffett, the billionaire investor, believes on, on what you're doing. And recently he's been buying up a lot of oxy stock. He's now your largest shareholder in your discussions with him. What has he told you about why he's so interested in Occidental? He loves our strategy. He said, told me he likes everything that we're doing and focused on the fact that we are strong in the US, we're continuing to lower our debt. We're continuing to now start the growth of a dividend again, which is a part of our core value proposition. And also we will buy back chairs and so were we have multiple ways to return value to shareholders and that's just with the kind of company that he liked? You've said that Warren Buffett agrees with your whole strategy. I mean, what does he see as the future for Occidental? I don't want to put words in his mouth, but I, I know that he's committed to, uh, to wanting us to be as environmentally friendly and focused on mitigating our emissions, both methane and CO two and becoming carbon neutral. He appreciates that about us and appreciates the operational excellence with which we can do that Vicky. You're really taking on a huge project here. How has your experience from your years with you as an engineer? Um, and all the many years that you've had leadership roles at Occidental prepared you for this bold direction that you're moving into my engineering experience and my operations exposure as I come up through Occidental helped prepare me to understand what it really takes to be successful in our industry. And while we have taken bold steps and we have taken on some risks, all those steps and all those risks are, are very calculated. It may seem bold to some people, but we, we go into a lot of detail to evaluate these things and I feel very comfortable with the direction that we're headed and excited about what we can do because I know that the technology is going to be advanced and we can make that happen? Well, when you became Ceo of Occidental, you made big news because you were the first woman to head up an american oil company. Now, six years later, um, you've been, you've been described as a gutsy leader, a risk taker and you've really proven your leadership abilities. What do you want to be known for? How do you want people to describe your legacy? I'd really rather my legacy be focused on how I enable others to do what they can do best. I would say that when you believe in people and when you trust people and when you and then empower them to to do the things that they're capable of doing, that's when you can get the most out of any organization, it's all about trust and it's all about respect and helping employees be whatever they feel like they can be and even more.