Indian Billionaire’s Refiner Buys First Cargo of Carbon-Offset Oil

(Bloomberg) -- Indian refiner Reliance Industries Ltd. has taken delivery of 2 million barrels of crude from Occidental Petroleum Corp. that the U.S. oil producer says is carbon neutral.

Reliance -- which operates the world's biggest refining complex -- said it's currently evaluating opportunities and partnerships for carbon-neutral oil and the purchase fits with its overall plan to become a net-zero carbon company by 2035, according to an emailed response to questions on Thursday. The cargo meets a tiny fraction of its processing capacity, with the company capable of refining as much as 500 million barrels of crude a year.

Greenhouse gas emissions of the so-called carbon-neutral oil sourced from the Permian basin have been offset, from the well head through to combustion of end products, according to a Jan. 28 statement posted on the website of Oxy Low Carbon Ventures, a unit of Occidental Petroleum.

Occidental is seeking to produce net-zero crude through efforts such as capture and sequestration of atmospheric carbon dioxide via industrial-scale facilities and the cargo to Reliance is the first step, according to the statement.

Reliance, owned by billionaire Mukesh Ambani, said last year that it's planning to replace sales of road fuels like diesel and gasoline with cleaner alternatives as it seeks to ride the global energy transition. Its twin refineries, however, were originally designed to process the world's dirtiest and cheapest crude into high-value petroleum products to maximize profits.

Prime Minister Narendra Modi is seeking to boost the nation's green credentials with a goal of doubling renewable power by next year. Explorer Oil & Natural Gas Corp. is among companies aiming to reduce their greenhouse gas footprint, with an agreement to source carbon-dioxide from refiner Indian Oil Corp. to inject into its oilfields to increase production.

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