In an innovative project that aims to significantly progress the decarbonization of California, S&C advised California Resources Corporation in the formation of a joint venture with Brookfield Renewable to create a carbon management partnership dedicated to carbon capture and sequestration. This process, which many view as essential to achieving carbon neutrality, removes carbon dioxide from the atmosphere or from an industrial process and stores it in suitable facilities. California Resources Corporation is the state’s largest producer of oil and natural gas.
The joint venture will benefit from California Resources Corporation’s first mover advantage in gaining access to available storage in California and Brookfield’s knowledge in global clean energy markets. Owned 51 percent by California Resources Corporation and 49 percent by Brookfield, the joint venture is targeting the injection of 5 million metric tons per year and 200 million metric tons of carbon dioxide storage development, which requires total capital of an estimated $2.5 billion. Brookfield has committed an initial $500 million, with the potential for follow-on investments of more than $1 billion.
The S&C team advising California Resources Corporation included Alison Ressler, Inosi Nyatta, Renata Mascarenhas and Danielle McKenna. Isaac Wheeler and Eli Dubin advised on tax matters. Nader Mousavi, Mark Schenkel and Philippe Schiff advised on intellectual property matters.
In 2020, S&C advised California Resources Corporation in its Chapter 11 restructuring, helping the company exit the proceedings just three months after filing. This joint venture is one in a series of high-profile S&C matters aimed at environmental preservation. Last year, we advised the nation of Belize in a groundbreaking “Blue Bond” restructuring of $550 million of debt that is funding marine conservation. This year, we advised Electrify America, the largest open electric vehicle charging network in North America, as it raised $450 million of equity.
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