Occidental Petroleum

Occidental Petroleum Corporation
	File:Occidental Petroleum logo.svg
Company type	Public company
Industry	Energy
Founded	1920 in Los Angeles, California, U.S.
Headquarters	Houston, Texas, United States
Area served	United States, Middle East, South America, Canada, Chile
Key people	Vicki Hollub (CEO and President), Cedric W. Burgher (CFO), Eugene L. Batchelder (Chairman)
Products	Hydrocarbon exploration and production, petrochemicals
Number of employees	11,700 (2021)
Website	oxy.com

Occidental Petroleum Corporation (commonly known as Oxy) is a U.S.-based energy firm engaged in hydrocarbon exploration across the United States and the Middle East, as well as petrochemical production operations in the U.S., Canada, and Chile. Incorporated under Delaware jurisdiction and headquartered in Houston, Texas, the company was ranked 183rd on the 2021 Fortune 500 list based on 2020 revenues and placed 670th on the 2021 Forbes Global 2000.

The leadership team features CEO and President Vicki Hollub, Chief Financial Officer Cedric W. Burgher, and Chairman Eugene L. Batchelder. In 2021, Occidental reported revenues of $26.3 billion, operating profits of $2.79 billion, and net earnings of $2.33 billion. The company’s total assets were valued at $75 billion with shareholder equity at $20.3 billion. Occidental's daily production averaged around 3.5 million barrels of oil equivalent, supported by a workforce numbering nearly 11,700 employees.

Occidental’s core business strategy centers on upstream hydrocarbon extraction combined with downstream chemical manufacturing. It utilizes its international footprint and experienced management to sustain competitive positioning and foster growth within the global energy sector.

History

Established in Los Angeles, California in 1920, Occidental Petroleum experienced a pivotal change in 1957 when Armand Hammer assumed the roles of president and CEO after securing majority ownership. Throughout the 1960s, the company expanded operations into countries including Peru, Venezuela, Bolivia, Trinidad, and the United Kingdom. A significant discovery during this period was the Lathrop Gas Field in California in 1961.

The firm acquired exploration rights in Libya in 1965 and maintained operations there until U.S. sanctions halted activities in 1986. Diversification efforts began in 1968 with the purchase of Hooker Chemical Company. Plans for an oil refinery in Essex, England initiated in 1971 were abandoned by 1975 due to the global energy crisis.

In 1973, Occidental negotiated a substantial $20 billion barter agreement with the Soviet Union involving phosphate and natural gas, leveraging mining and energy assets through entities controlled by Hammer. That same year, Libya nationalized a majority stake (51%) in Occidental’s holdings but entered into a 35-year oil exploration contract with the company in 1974; however, operations ceased following sanctions in 1986. Occidental reestablished presence in Libya after the embargo was lifted in 2005.

As an early innovator in oil shale technology, Occidental made notable advances including the discovery of Colombia’s Caño Limón oilfield alongside Ecopetrol in 1983. The company divested its interests in Congolese oilfields for $215 million in 1996 and acquired California’s Elk Hills Oil Field for $3.65 billion in 1997.

In 1986, Occidental formed a joint venture with Church & Dwight to produce potassium carbonate. The company faced tragedy in 1988 with the Piper Alpha platform disaster causing 167 fatalities.

Following Armand Hammer’s death in 1990, Ray R. Irani took over as chairman and CEO. Under his tenure, Occidental concentrated its portfolio on oil and gas activities; despite controversies regarding executive pay, market capitalization surged from $5.5 billion to $80 billion. By 1993, coal operations had been divested.

In 2006, Ecuador expropriated Occidental’s Amazon Rainforest assets resulting in a $306 million impairment; this dispute was settled through arbitration with a $980 million compensation agreement reached in 2016.

Occidental expanded shale holdings by acquiring Williston Basin assets for $1.4 billion in 2010 but later sold them for $600 million in 2015. It also sold Argentine reserves to Sinopec while purchasing properties in South Texas and North Dakota totaling $3.2 billion.

A strategic partnership was formed in 2011 with Abu Dhabi’s state oil company to develop the Shah Field through Al Hosn Gas joint venture, which became operational by 2015.

The corporate headquarters relocated to Houston, Texas in September 2014; that same year it divested its interest in BridgeTex Pipeline for $1.075 billion and completed the spin-off of California Resources Corporation between 2014 and 2016.

In the Permian Basin during 2017, Occidental executed asset exchanges valued at $600 million and finalized a $500 million carbon dioxide flooding project in New Mexico by 2015. Collaborating with Mexichem, it commissioned a large ethylene cracker facility in Texas that year.

In May 2016, Vicki Hollub, who had long served as an executive and joined the board in 2015, was appointed CEO—marking her as the first woman to lead a major American oil and gas corporation.

Occidental bore partial responsibility for the Bayou Corne sinkhole event that occurred in 2018.

In October 2020, Occidental divested its onshore Colombian assets to Carlyle Group for $825 million but maintained offshore exploration rights alongside Ecopetrol, aiming to commence drilling activities by 2024.

Acquisitions

Occidental expanded its portfolio in 1981 by acquiring IBP, Inc., a prominent U.S. beef and pork producer. In 1988, the company bought Cain Chemical for $2 billion. Its oil and gas holdings grew with the 2005 purchase of Vintage Petroleum for $3.8 billion, followed by acquiring a 10% interest in Plains All American Pipeline in 2008, along with assets from Plains Exploration & Production valued at $1.3 billion.

In 2009, Occidental took over Citigroup's energy trading unit, Phibro, for approximately $250 million. Initially managed by Andrew J. Hall, Phibro showed promising results early on but later encountered losses post-acquisition and was divested in 2016.

The company's most substantial acquisition occurred in August 2019 with the $57 billion procurement of Anadarko Petroleum, representing one of the largest transactions within the oil and gas sector. In August 2023, Occidental enhanced its carbon management capabilities by acquiring Carbon Engineering, a direct air capture technology firm, for $1.1 billion. Subsequently, in August 2024, it completed a $12 billion purchase of CrownRock, a Permian Basin producer.

Through these calculated acquisitions, Occidental has considerably broadened its international operations, diversified its range of products, and reinforced its competitive standing in the energy marketplace.

Oil and gas

Occidental's oil and gas activities concentrate primarily in the United States and the Middle East, with additional projects in South America. As of December 31, 2020, the company reported net proved reserves totaling 2.911 billion barrels of oil equivalent (BOE), comprised of 51% crude oil, 19% natural gas liquids, and 30% natural gas. The total production for 2020 reached 1.35 million BOE per day.

United States

In 2020, U.S.-based operations generated 1.037 million BOE daily, representing 77% of Occidental’s overall production. The Permian Basin served as the principal asset, delivering 575,000 BOE per day where Occidental stands as the largest operator and oil producer. This output included 435,000 BOE per day derived from unconventional directional drilling via Permian Resources and an additional 140,000 BOE per day produced through enhanced oil recovery methods involving carbon dioxide and water injection into reservoirs. The Denver Basin contributed another 293,000 BOE daily.

Middle East

Occidental’s activities in Oman, Qatar, and the United Arab Emirates are conducted under production sharing agreements. This region accounted for roughly 19% of total production in 2020 with an output of 251,000 BOE per day and contained around 28% of the company’s proved reserves. Occidental holds the position as Oman’s largest independent oil producer and ranks second among offshore oil producers in Qatar. Additionally, it maintains an interest in the Dolphin Gas Project supplying natural gas to Oman and the UAE.

South America

Occidental’s subsidiary Anadarko Colombia entered into a joint exploration agreement with Ecopetrol in May 2022 to conduct deepwater offshore exploration in the Caribbean Sea, aiming to drill the world’s deepest offshore well by 2024. Anadarko Peru finalized phase one of a three-dimensional marine seismic acquisition project off northern Peru during 2024.

Chemical

OxyChem, a fully owned subsidiary, manufactures polyvinyl chloride (PVC) resins, chlorine, and sodium hydroxide (caustic soda) utilized across plastics production, pharmaceuticals, and water treatment industries. Its product range also encompasses caustic potash, chlorinated organics, sodium silicates, chlorinated cyanuric acid (isocyanurate), and calcium chloride. OxyChem operates multiple manufacturing plants throughout the United States, Canada, and Chile. In collaboration with Church & Dwight, it co-owns Armand Products Company which markets potassium carbonate and potassium bicarbonate products.

Decarbonization initiatives

In June 2024, Occidental Petroleum entered into a memorandum of understanding with TAE Technologies to investigate the commercial potential of TAE's nuclear fusion technology for delivering clean electricity and thermal energy to support Occidental’s direct air capture (DAC) operations. Given that DAC processes require substantial energy, this collaboration seeks to offer low-carbon power alternatives. TAE Technologies aims to demonstrate a fusion project by 2025, with plans for commercial deployment during the 2030s.

Lobbying efforts in Libya

Occidental commenced activities in Libya in 1965 but suspended operations following U.S. sanctions imposed in 1986. It was among the earliest U.S. companies to re-engage in negotiations after sanctions were lifted in 2004. In 2008, Occidental attracted scrutiny for hiring the law firm Hogan Lovells to lobby for exemptions from U.S. legislation that allowed terror victims to claim Libyan assets linked to the Pan Am Flight 103 bombing, as well as to seek removal of Dodd–Frank Act clauses requiring disclosure of payments made to foreign governments. The company halted Libyan operations amid civil conflict and renewed U.S. sanctions in early 2011.

By June 2011, regulatory bodies including the U.S. Securities and Exchange Commission and UK prosecutors launched investigations into Occidental, ExxonMobil, and ConocoPhillips regarding possible breaches involving the Libyan Investment Authority (LIA), which was under Muammar Gaddafi’s control. After U.S. authorities froze LIA assets, Occidental fully exited Libya in 2016.

Environmental performance

In 2017, Occidental was ranked 55th on the Carbon Majors Report, which identifies the top 100 contributors to cumulative greenhouse gas emissions from 1988 through 2015.

The company highlights its application of enhanced oil recovery techniques in certain operations as a strategy to reduce emissions.

Copper Basin remediation

Occidental acquired property in Tennessee's Copper Basin, historically known for the Burra Burra Mine, in 1982. In 2016, the company pledged $50 million toward improving water quality and addressing contamination issues within the region.

Love Canal incident

From the 1920s onward, various corporations and the U.S. military used Love Canal as a chemical waste disposal site. Hooker Chemical Company, Occidental’s predecessor, began waste dumping there in 1942 and gained full ownership by 1947. After reaching capacity in 1952, Hooker leased the land to the local school board, which subsequently purchased it and developed a school and residential neighborhood—thereby breaching the clay barrier that contained hazardous waste.

Occidental acquired Hooker Chemical in 1968. By 1978, residents reported health problems including cancer and birth defects. The situation drew national attention and prompted President Jimmy Carter to declare a federal emergency in 1980. Residents were relocated, and Occidental compensated victims with $129 million.

Oleum leak

On October 11, 2008, an oleum leak took place at Indspec, a subsidiary of Occidental Chemical Corporation located in Petrolia, Pennsylvania. Oleum—a compound consisting of sulfuric acid and sulfur trioxide—contaminated the ventilation system, releasing harmful gas that necessitated evacuation of over 2,000 people. The cause was identified as an auxiliary pump power supply lacking safety interlocks designed to prevent tank overfilling.

Bangladesh

On June 14, 1997, an explosion occurred at the Magurchhara gas field located in Kamalganj Upazila within Moulvibazar District, Bangladesh. This site was operated by Occidental at the time. The blast caused significant destruction to portions of Lawachara National Park and inflicted damage on 28 tea plantations. Financial losses were estimated between 90 and 140 billion Bangladeshi Taka. Following the incident, Occidental ceased operations at the gas field and transferred control to Unocal Corporation, which subsequently divested its stake to Chevron. Although the government sought compensation, no agreement was finalized.

Colombia

Between 1992 and 2001, Occidental pursued oil exploration on lands inhabited by the U'wa people in northeastern Colombia. The local community resisted due to environmental concerns, apprehensions about guerrilla warfare, and cultural opposition rooted in tribal beliefs against oil extraction. After enduring shareholder activism, legal challenges, protests, and an unsuccessful exploratory well, the company ultimately withdrew from the project in 2002. Repsol later assumed control of these operations.

Caño Limón

On December 13, 1998, a cluster bomb deployed by the Colombian Air Force resulted in the deaths of 17 civilians near Occidental's Caño Limón facility. The attack stemmed from a misidentification of the village of Santo Domingo as a guerrilla stronghold by AirScan, Occidental’s security contractor. AirScan personnel coordinated with the Colombian Air Force during this operation. In 2003, a survivor initiated legal action against Occidental; however, courts determined that the company was not legally responsible for the event.

Maynas Carijano v. Occidental Petroleum

In 2007, twenty-five Achuar Indigenous individuals from Peru filed a lawsuit against Occidental Petroleum seeking environmental cleanup and compensation for alleged pollution linked to drilling activities in Block 1-AB between 1971 and 2000. The plaintiffs charged the company with breaching environmental regulations by discharging roughly nine million gallons of toxic oil waste containing hazardous substances such as cadmium, lead, and arsenic into waterways essential for fishing, drinking water, and bathing for their community. This contamination was associated with early mortality and birth abnormalities. A 2006 study by Peru’s Ministry of Health revealed elevated cadmium levels in nearly all tested members of the community.

With representation from EarthRights International and legal firm Schonbrun DeSimone Seplow Harris & Hoffman LLP, the plaintiffs pursued their case in U.S. courts. In 2010, the Ninth Circuit Court ruled that the trial should be held in Los Angeles, where Occidental is headquartered. The U.S. Supreme Court declined to review the company’s appeal in 2013. In March 2015, Occidental reached a confidential settlement agreement to support health, education, and nutrition initiatives across five Achuar communities along the Corrientes River basin.

Anadarko Petroleum

Occidental Petroleum's acquisition of Anadarko Petroleum in 2019 brought with it a history that included settling the largest environmental contamination case ever recorded in the United States and involvement in the Deepwater Horizon disaster alongside associated Clean Water Act penalties.

This transaction was funded through a $10 billion investment from Berkshire Hathaway’s CEO Warren Buffett, who received 100,000 shares of cumulative perpetual preferred stock valued at $100,000 per share. Additionally, Buffett obtained a warrant granting him the option to purchase up to 80 million more shares at $62.50 each.

Financial support

Occidental openly reports its monetary contributions to political action committees, lobbyists, and industry associations.

In 2005, the corporation was one of 53 organizations donating the maximum amount of $250,000 to the Second inauguration of George W. Bush. Additionally, it contributed between $10,000 and $25,000 to the Clinton Foundation.

Connections with the Gore family

Armand Hammer, Occidental’s former CEO, maintained a longstanding friendship with ex-U.S. Senator Albert Gore, Sr., who also held a position on the company's board. After an unsuccessful Senate campaign in 1970, Gore assumed leadership of Island Creek Coal Company, an Occidental subsidiary, in 1972. The firm’s coal and phosphate ventures were primarily located in Tennessee—Gore’s Senate constituency—where he owned shares as well. Occidental divested its coal holdings in 1993 following Hammer’s passing.

Vice President Al Gore encountered criticism from environmental advocates due to inheriting shares after his father died in 1998; however, he quickly divested these holdings.

In 1998, the Elk Hills Oil Field was sold by the U.S. government to Occidental for $3.65 billion through a segmented auction process. Critics pointed to the Gore family’s relationship with Occidental as indicative of potential political favoritism during this transaction.

Safety performance

In 1999, OxyChem achieved Star Status under OSHA’s Voluntary Protection Programs, recognizing it among the safest workplaces in the United States.

Piper Alpha incident

On July 6, 1988, Occidental’s Piper Alpha offshore platform in the North Sea was destroyed by a gas leak and subsequent explosion resulting from insufficient maintenance and safety protocols. This catastrophe caused 167 deaths, making it the deadliest offshore accident worldwide. The official investigation attributed responsibility to Occidental’s operational shortcomings; however, no legal charges were brought forward.

Greenmail episode=

In 1984, billionaire David H. Murdock—who then owned approximately 5% of Occidental and served on its board following the IBP, Inc. acquisition—entered into conflict with CEO Armand Hammer. Occidental repurchased Murdock’s shares through greenmail at $40.09 per share, significantly above the market price of $28.75.

Allegations of price-fixing=

In January 2024, a class action lawsuit was filed accusing Occidental along with seven other oil producers of unlawfully coordinating shale oil production to artificially raise gasoline prices across three U.S. states, thereby limiting consumer choice by restricting competition.

Books

Epstein, Edward Jay. Dossier: The Secret History of Armand Hammer. New York: Random House (1996). . 418 pages.

External links