Energy News Beat
ExxonMobil said on Thursday it had completed the acquisition of carbon solutions provider Denbury in an all-stock transaction valued at $4.9 billion, which makes the U.S. supermajor the holder of the largest owned and operated CO2 pipeline network in the U.S.
Source: Reuters
The deal, first announced in July this year, obtained Denbury shareholder approval earlier this week.
The combination will further expand ExxonMobil’s ability to provide large-scale emission-reduction services to industrial customers, the company said in its Q3 results release at the end of last week.
Exxon will now have Denbury’s more than 1,300 miles of CO2 dedicated pipelines in the U.S., with operations include oil and gas development, as well as CO2 transportation and storage, including planned sites for future carbon sequestration.
“Acquiring Denbury strengthens our position to economically reduce emissions in hard-to-decarbonize industries, which today have limited practical options. We see the potential to drive strong returns with the capacity to reduce the nation’s carbon emissions by 100 million tons per year,” Exxon’s CEO Darren Woods said on the earnings call with analysts last week.
In the United States, the IRA increased credit values across the board, with the tax credit for carbon storage from carbon capture on industrial and power generation facilities rising from $50 to $85 per ton, and the tax incentives for storage from direct air capture (DAC) jumping from $50 to $180 per ton. The provisions also extend the construction window by seven years to January 1, 2033. This means that projects must begin physical work by then to qualify for the credit.
The significantly higher incentives in the IRA are giving impetus to projects.
“The CCS market has just taken off,” Nick Cooper, CEO at carbon capture and storage developer Storegga, told the Financial Times earlier this year.
“This feels a bit like the U.S. shale boom 15 years ago,” Cooper added.
By Charles Kennedy for Oilprice.com
The post Exxon completes $4.9 billion Denbury acquisition appeared first on Energy News Beat.
