SK inks deal with Occidental, becomes world’s first buyer of ‘net-zero oil’

SK Trading International, one of SK Innovation’s subsidiaries, recently signed a 5-year deal with Occidental for the import of its net-zero oil. The deal will make the South Korean trading platform the world’s first buyer of the said eco-friendly product.

Based on the announcement on Wednesday, March 23, SK Trading International may buy up to 200,000 barrels of net-zero oil annually for five years from the Houston, Texas-headquartered Occidental Petroleum Corporation. The SK Group affiliates will be using sustainable material to develop net-zero commercial products such as eco-friendly aviation fuel, as per The Korea Herald.

SKT’s purchase of the oil which is set to start in 2025, officially marks the first net-zero oil contract in the world. It was explained that while oils still emit greenhouse gases when they are burned, Occidental refers to its product as “net-zero oil” because the company said it could get rid of carbon from the air and keep it in the depths of a petroleum reservoir.

Oxy added that this is enough to cancel out the carbon emissions throughout the entire crude oil lifecycle. Net-zero oil is intermingled with environmental elements brought about by the removal and sequestration of atmospheric CO2 via enhanced oil recovery or EOR that amplifies the ability of the oil to flow to a well by adding water, chemicals, or gases into the reservoir or by changing the physical properties of the oil.

“Net-zero oil is an important component of the energy transition and provides a critical bridge as society moves to a net-zero economy,” Occidental’s president of U.S. onshore resources and carbon management, operations, Richard Jackson, said in a press release. “As Occidental advances our Pathway to Net Zero, we are excited to partner with SK Trading International and leverage our licensed direct air capture technology and EOR experience to create a new solution for the transportation sector.”

Meanwhile, net-zero means an immense reduction in the use of coal, oil, and gas under a global campaign to attain net-zero carbon emissions by the year 2050. SK Innovation and SK Trading International shared that their goal under the companies’ “Carbon to Green” strategy is to cut carbon emissions by 50% in eight years from now and become carbon neutral before 2050.