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BlackRock Inc (NYSE:)., under the leadership of CEO Larry Fink, has committed $550 million through its Diversified Infrastructure business towards the development of STRATOS, the world’s largest Direct Air Capture (DAC) facility currently under construction in Ector County, Texas. The project, also backed by Occidental Petroleum Corporation (NYSE:) and its carbon capture subsidiary 1PointFive led by CEO Vicki Hollub, was launched as a joint venture on Monday.
STRATOS is designed to annually extract and store 500,000 tonnes of CO₂ from the atmosphere in geologic formations. The facility is currently one-third complete, with operational readiness expected by mid-2025.
The investment comes despite a 2022 ban by Texas Comptroller Glenn Hegar on entities boycotting fossil fuels. Nonetheless, BlackRock’s commitment to STRATOS persists, aligning with the firm’s broader focus on sustainable investment strategies.
In addition to BlackRock and Occidental Petroleum, several other entities have shown interest in the project. Amazon (NASDAQ:), Airbus, ANA, TD Bank Group, the Houston Astros, and the Houston Texans have all signed carbon removal credit purchase agreements with 1PointFive.
This investment marks a significant step towards large-scale carbon capture solutions. By backing projects like STRATOS, BlackRock and Occidental Petroleum are positioning themselves at the forefront of efforts to mitigate climate change through innovative technology.
InvestingPro Insights
Our real-time data from InvestingPro offers valuable insights into the financial health and performance of both BlackRock Inc. and Occidental Petroleum Corporation.
BlackRock Inc., known as BLK in the stock market, has a track record of high return on invested capital, which is a promising sign for the STRATOS project. An InvestingPro Tip to note is that BlackRock has raised its dividend for 13 consecutive years, demonstrating the company’s stability and reliability to its shareholders. Additionally, BlackRock’s cash flows can sufficiently cover interest payments, which is a positive indicator of the company’s financial health and its ability to fund ambitious projects like STRATOS.
On the other hand, Occidental Petroleum Corporation, or OXY, is also showing positive signs. According to InvestingPro Tips, the management has been aggressively buying back shares, which can be seen as a strong vote of confidence in the company’s future. Moreover, OXY has maintained dividend payments for an impressive 50 consecutive years, underlining its commitment to returning value to its shareholders.
For more detailed insights and tips, consider exploring the InvestingPro platform, which offers an extensive list of 8 additional tips for BLK and 6 more for OXY. These can provide a more comprehensive understanding of these companies’ financial prospects, helping you make more informed investment decisions.
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