LONDON - Just as they first ventured to do over a century ago, the world’s largest oil companies are staking claims far from home – this time to swallow, rather than spew, planet-warming industrial emissions.

Carbon dioxide (CO2) storage is emerging as a potential multibillion-dollar revenue stream for companies like ExxonMobil, Shell and Chevron, which are under global pressure to rein in the unfettered burning of fossil fuels.

In Asia, which will generate the majority of this century’s carbon emissions, Indonesia and Malaysia are among the few places where CO2, once captured, can be viably stored underground.

With the cash, decades of experience injecting carbon for the purposes of pumping extra oil, and an increasing number of depleted wells that can be refilled, oil companies are already jockeying for position.

ExxonMobil chief executive Darren Woods said the company has “secured exclusive rights to CO2 storage” in Indonesia and Malaysia.

Shell has signed an agreement to scope out possible sites with Malaysia’s national oil company, Petronas. Chevron is studying a project in Indonesia.

And France’s TotalEnergies is actively exploring storage potential in the region.

Meanwhile, Indonesia’s government in February rushed through a presidential decree on possible incentives for CO2 storage operators. Similar schemes are under way in Europe and Australia.

“There’s a race,” said Ms Lein Mann Bergsmark, the head of carbon capture, utilisation and storage research for consulting group Rystad Energy.

“More and more oil and gas companies are dedicating efforts to acquire pore space or rights to store CO2 all around the globe.”

Storage is the final step in the process known as carbon capture and storage (CCS), a technology designed to suck CO2 out of the atmosphere and bury it underground forever, in theory neutralising its effects on climate change.

For oil companies, the wide deployment of CCS is a lifeline, albeit a thin one: It means they could preserve up to 20 per cent of today’s oil and gas demand through 2050 without pushing global warming beyond levels set in the Paris Agreement, according to the International Energy Agency (IEA).

Without it, consumption would need to fall even further. It also provides a new source of revenue, as companies can rent out storage space for a fee.

For now, there is a huge gap between the amount of CO2 that will need to be captured and the storage space that is available.

To meet global climate goals, more than one billion tonnes of CO2 will need to be sucked up and buried every year by the end of the decade, according to the IEA.

But today, only 4 per cent of that capacity is available across just a few dozen commercial sites globally.

Part of the problem is economics. At the high end, it can cost more than US$1,000 (S$1,300) to capture and bury a tonne of CO2, depending on the source of the gas.

Absent a strong price on carbon emissions, oil companies have yet to make even lower-cost capture and storage projects financially viable.

Then there is the politics.

In the United States, fierce pushback from environmentalists and local residents has delayed storage well permitting and construction. In a public hearing last summer, dozens argued that state regulators were ill-equipped to oversee the injection wells, warning about the risk of lax oversight and ruptures.

Geology is also a constraint. Two types of underground space can be filled with CO2 – deep, permeable rock formations called saline aquifers, and old, depleted oil and gas wells – and they do not exist everywhere.

In Asia, Japan, South Korea, Taiwan and Singapore are all heavy emitters, but they lack the subsoil characteristics to permanently sink enough CO2, meaning they will need to export it elsewhere in the region for burial, analysts say.

Singapore recently appointed Exxon and Shell to help it scope overseas sites. Indonesia and Malaysia, meanwhile, are being earmarked as suitable repositories – a plan the two governments have, so far, endorsed.

Big regional emitters “come and see us”, said Mr Emry Hisham Yusoff, head of the carbon management division at Petronas. “What they want is assurance that there’s storage.”

The two countries of course have their own emissions to capture and bury too, a challenge that has prompted Jakarta to state that 70 per cent of Indonesia’s potential storage space will be reserved for domestic emissions.

Rystad estimates that CO2 transport and storage in South-east Asia may generate about US$16 billion of annual revenue by 2050, though it depends on how much the region can sequester, and projections vary widely.

Exxon signed an agreement in 2023 with Indonesian national oil company Pertamina to develop a US$2.5 billion storage facility.

Mr Etienne Angles d’Auriac, TotalEnergies’ vice-president of CCS, said his company is investing about US$100 million per year in global CCS development, a figure that may triple by the end of the decade.

For some analysts, the emphasis on storage is misplaced in the light of the current state of carbon capture. Some of the biggest and most advanced attempts are struggling or have failed outright.

If capture does work, there are still not a lot of ships available to transport the CO2. Suitable storage sites are rare and take years to identify. Even then, history suggests they are far from reliable.

To encourage the market, oil companies are leaning on governments to accelerate permits for storage and to subsidise the cost of developing those sites. Exxon, Chevron, Shell and TotalEnergies all told Bloomberg that they are working with the respective governments to help shape the rules governing the sector.

Days before February’s general election in Indonesia, the government issued a presidential decree offering financial incentives to companies seeking to build storage facilities for imported carbon. The companies will be able to apply for permits that are valid for up to 30 years.

How much the projects will generate in taxes and royalties is still under discussion, a government spokesperson said.

Mr Emry at Petronas, which is looking to develop three storage hubs that together would be capable of storing up to 15 million tonnes of CO2 per year by 2030, said that Malaysia has no clear legislation for importing CO2.

“There’s a lot of push” to expedite this, he said.

“We’re trying to learn from each other here.”

BLOOMBERG