Occidental Petroleum

Occidental Petroleum is a major American multinational engaged in hydrocarbon exploration and the production of crude oil and natural gas, with significant midstream and chemical manufacturing operations. Founded in the early 20th century, it has grown through strategic acquisitions, most notably of Anadarko Petroleum, to become one of the largest independent oil producers in the United States. The company is known for its extensive operations in the Permian Basin, advanced carbon capture initiatives, and a history intertwined with global geopolitics and environmental debates. Its corporate headquarters relocated from Los Angeles to Houston in 2020, cementing its presence in the heart of the U.S. energy industry.

History

The company was established in 1920 in Los Angeles by a group including the influential industrialist Armand Hammer, who would shape its direction for decades. Initial ventures were modest, but significant growth began with the 1960s discovery of the Lathrop Gas Field in California. Hammer's relationship with the Soviet Union led to pioneering trade agreements, including a major ammonia and superphosphate deal. A transformative period occurred in the 1970s with the development of the Libyan Zelten field and the acquisition of Island Creek Coal, diversifying its portfolio. The 1982 acquisition of Cities Service Company was a landmark deal, though it necessitated the sale of assets to Gulf Oil due to Federal Trade Commission concerns. Later, under Ray R. Irani, the company expanded its chemical division with the purchase of Diamond Shamrock's operations. The 21st century has been defined by strategic shifts, including exiting Argentina and Bolivia, and the monumental 2019 acquisition of Anadarko Petroleum, a move financed with backing from Warren Buffett's Berkshire Hathaway.

Operations

Its core upstream operations are concentrated in the United States, particularly in the prolific Permian Basin of Texas and New Mexico, where it is a leading producer. Internationally, it maintains significant assets in the Al Wusta Governorate of Oman and has interests in Colombia and the United Arab Emirates. The midstream and marketing segment, managed through OxyChem, is a top manufacturer of chlor-alkali products and vinyls, with major facilities in Ingleside, Texas and Lake Charles, Louisiana. A defining operational focus is on carbon capture, utilization and storage (CCUS) technology, primarily through its subsidiary 1PointFive, which is developing the DAC-1 direct air capture plant in the Permian Basin. This initiative is part of a broader strategy to achieve net-zero emissions from its operations and products.

Environmental record and controversies

The company has faced significant scrutiny over its environmental impact, most notably from the 2015 Aliso Canyon gas leak in Southern California, one of the largest methane releases in U.S. history, which resulted in a multi-million dollar settlement with the State of California. Its extensive operations in the Permian Basin have drawn criticism for high flaring rates and methane emissions. While it has committed to ambitious net-zero goals and champions direct air capture, critics, including shareholders and groups like Follow This, argue these efforts distract from the need to phase out fossil fuel extraction. Its support for carbon tax policies and advanced technologies places it in complex debates within the oil and gas industry regarding credible climate change action.

Financial performance

As a publicly traded entity on the New York Stock Exchange and a component of the S&P 500, its financial health is closely tied to commodity price volatility for West Texas Intermediate and Brent Crude. The leveraged acquisition of Anadarko Petroleum significantly increased its debt load, prompting asset sales and strategic divestments, including portions of its African assets to TotalEnergies. Dividends have historically been a feature, though they were cut following the Anadarko deal. Major investors include Berkshire Hathaway and influential index funds like those managed by The Vanguard Group and BlackRock. Its performance is often benchmarked against peers like Chevron Corporation and ExxonMobil.

Leadership and governance

The company is led by President and Chief Executive Officer Vicki Hollub, who became the first female CEO of a major American oil company in 2016. The Chairman of the Board is former CEO Stephen I. Chazen. Its board of directors has faced pressure from activist investors, notably a 2021 proxy contest with Carl Icahn concerning the Anadarko acquisition and governance practices. Executive compensation, particularly during the tenure of former CEO Ray R. Irani, has been a point of shareholder contention. The 2020 move of its corporate headquarters from Los Angeles to Houston was a strategic decision to be closer to its core operational assets in the Gulf Coast region.

Category:Oil and gas companies of the United States Category:Companies based in Houston Category:Companies listed on the New York Stock Exchange