Occidental Petroleum facts for kids
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| Public company | |
| Traded as |
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| Industry | Energy industry |
| Founded | 1920 |
| Headquarters | Houston, Texas, U.S. |
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Key people
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| Products | Chemical substances |
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Production output
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3,512 thousand barrels of oil equivalent (21,490,000 GJ) per day (2021) |
| Revenue |  US$26.314 billion (Fiscal Year Ended December 31, 2021) |
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Operating income
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US$2.790 billion (Fiscal Year Ended December 31, 2021) |
| US$2.332 billion (Fiscal Year Ended December 31, 2021) |
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| Total assets |  US$75.036 billion (Fiscal Year Ended December 31, 2021) |
| Total equity | US$20.327 billion (Fiscal Year Ended December 31, 2021) |
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Number of employees
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11,678 (Fiscal Year Ended December 31, 2021) |
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Occidental Petroleum Corporation (often abbreviated Oxy in reference to its ticker symbol and logo) is an American company engaged in hydrocarbon exploration in the United States and the Middle East as well as petrochemical manufacturing in the United States, Canada, and Chile. It is incorporated under the Delaware General Corporation Law and headquartered in Houston. The company ranked 183rd on the 2021 Fortune 500 based on its 2020 revenues and 670th on the 2021 Forbes Global 2000.
Contents
History
Occidental Petroleum was founded in Los Angeles, CA in 1920. In 1957, Armand Hammer became the company's president and CEO after acquiring a controlling stake for tax reasons. The 1960s marked a period of expansion as Occidental established operations in Peru, Venezuela, Bolivia, Trinidad, and the United Kingdom. In 1961, the company discovered the Lathrop Gas Field in Lathrop, California.
In 1965, Occidental won exploration rights in Libya, where it operated until 1986 when United States economic sanctions led to the suspension of activities. The company diversified in 1968 by entering the chemical business with the acquisition of Hooker Chemical Company, following the Love Canal contamination incident.
In 1971, Occidental received approval to build an oil refinery in Canvey Island in Essex, England, but construction ceased in 1975 due to the 1970s energy crisis. The site remained derelict; the tanks and the chimney were subsequently demolished. Only some concrete foundations and the river jetty remain extant.
In 1973, Occidental negotiated a phosphate-for-natural-gas deal with the Soviet Union, in which the Hammer-controlled firms Occidental Petroleum and Tower International would export to the Soviet Union phosphate, which Occidental mined in northern Florida, in return for the Soviet Union exporting from Odessa and Ventspils through Hammer's firms natural gas that would be converted into ammonia, potash, and urea. The total value of this trade was estimated at $20 billion. The construction of Soviet port facilities, designed by Hammer's firms, was partially financed by the Export-Import Bank as endorsed by Nixon.
In August 1973, Libya nationalized 51% of Occidental's assets in the country. In February 1974, the company announced a 35-year oil exploration agreement with Libya. 81% of the oil extracted by Occidental Petroleum was to go to the Libyan government, with 19% retained by Occidental Petroleum. In 1986, the company suspended operation in the country due to economic sanctions imposed by the United States. In 2005, Occidental and its partner, Liwa, won 8 out of 15 exploration spots on the EPSA-4 auction, making both companies among the first to enter the Libyan market since the United States lifted its embargo on Libya.
The company was one of the first companies to research developing oil shale.
In 1983, Occidental and Ecopetrol, the Colombian state-owned oil company, discovered the giant Caño Limón oilfield in Arauca. In July 1996, the company sold its interest in 3 oilfields in the Congo to the Congolese government for $215 million. The following year, it paid $3.65 billion to acquire the Elk Hills Oil Field.
In 1986, the company formed a joint venture with Church & Dwight, which makes Arm & Hammer products, for a potassium carbonate plant at Muscle Shoals, Alabama.
On July 6, 1988, an explosion and subsequent inferno on the company's Piper Alpha platform in the Scottish North Sea, resulted in 167 fatalities in what remains the world's most deadly offshore disaster.
In 1990, Armand Hammer died and Ray R. Irani became chairman and chief executive officer of the company. In 1991, Occidental sold its stake in IBP, Inc. In 1993, the company sold its remaining coal operations.
In 2006, the government of Ecuador seized the company's interest in block 15 of the Amazon Rainforest, forcing the company to take a $306 million after-tax charge. In 2016, Ecuador agreed to pay $980 million in restitution to the company, down from the original award of $1.77 billion. The agreement was based on a 2012 arbitration award from the International Center for Settlement of Investment Disputes.
In 2007, Occidental's compensation policies came under scrutiny after it was announced that Irani received $460 million in compensation in 2006. In May 2011, Irani retired as CEO after CalSTRS and Relational Investors, two major shareholders, objected to the company's compensation policies for top executives. President Stephen I. Chazen was named CEO to replace Irani and in 2013, shareholders ousted Irani as chairman. Despite his outlandish compensation, during Irani's tenure, the company grew from a collection of unrelated businesses to one that focuses on oil and gas and the market capitalization of the company went from $5.5 billion to $80 billion.
In December 2010, Occidental acquired shale oil properties in the Williston Basin in North Dakota for $1.4 billion. These assets, as well as other assets acquired by Oxy in the Williston Basin, were sold in 2015 for $600 million. The company also sold its proven and probable reserves of 393 million barrels of oil equivalent (2.40×109 GJ) in Argentina to Sinopec, a subsidiary of China Petrochemical Corporation, and acquired properties in South Texas and North Dakota for $3.2 billion.
In January 2011, Occidental partnered with Abu Dhabi's state oil company in developing the Shah Field, one of the largest natural gas fields in the Middle East, through a joint venture known as Al Hosn Gas. Al Hosn Gas became operational in 2015.
In September 2014, Occidental moved its headquarters to Houston, Texas. In November, the company sold its 50% interest in BridgeTex Pipeline Company, owner of a 300,000 barrel-per-day crude oil pipeline system that extends from Colorado City, Texas to Texas City, Texas, for $1.075 billion. In December 2014, Occidental distributed 80.5% of its shares in California Resources Corporation, the largest producer of oil and natural gas on a gross-operated barrels of oil equivalent basis in California, to Occidental shareholders and distributed its remaining stake to shareholders in March 2016. In June 2017, the company sold land in the Permian Basin for $600 million and used the proceeds to acquire other assets in the area.
In October 2015, Occidental completed the first phase of a $500 million carbon dioxide flooding project in Hobbs, New Mexico. In March 2017, the company and its 50/50 joint venture partner Mexichem began operations of a 1.2-billion-pound per year capacity ethylene cracker at the OxyChem plant in Ingleside, Texas, along with pipelines and storage at Markham, Texas.
In May 2016, Vicki Hollub, who had worked at Occidental since 1981 and joined the board in 2015, became the chief executive officer of the company, the first female to serve as chief executive officer of a major U.S. oil and gas company.
In January 2018, Occidental was found to be partially responsible for the Bayou Corne sinkhole, along with Texas Brine Company and Vulcan Materials Company.
Acquisitions
In 1981, Occidental acquired IBP, Inc., one of largest producers of beef and pork products in the United States. In 1988, the company acquired Cain Chemical for $2 billion.
In 2005, the company acquired Vintage Petroleum for $3.8 billion. In 2008, it acquired a 10% stake in Plains All American Pipeline. The company also acquired assets from Plains Exploration & Production for $1.3 billion. In October 2009, Occidental acquired Citigroup's controversial Phibro energy-trading business, for its net asset value of approximately $250 million. The unit was managed by Andrew J. Hall, who received compensation of approximately $100 million per year in 2007 and 2008. After the acquisition, the division reported its first losses since the 1990s. In 2016, Phibro was wound down and sold.
In August 2019, Occidental acquired Anadarko Petroleum for $57 billion, making the deal the world's fourth biggest oil and gas acquisition to date.
In August 2023, Occidental acquired all the outstanding equity of the direct air capture technology company, Carbon Engineering for $1.1 billion. In December, the company acquired a Permian producer, CrownRock, for $12 billion. The acquisition is expected to close in the first quarter of 2024.
Operations
Oil and gas
The company's oil and gas operations are concentrated in three geographic areas: the United States, the Middle East, and Colombia. As of December 31, 2020, Occidental had 2.911 billion barrels of oil equivalent (1.781×1010 GJ) of oil equivalent net proved reserves, of which 51% was petroleum, 19% was natural gas liquids, and 30% was natural gas. In 2020, the company had production of 1,350 thousand barrels of oil equivalent (8,300,000 GJ) per day.
United States
In 2020, the company's United States operations produced 1,037 thousand barrels of oil equivalent (6,340,000 GJ) per day, representing 77% of the company's worldwide production, including 575 thousand barrels of oil equivalent (3,520,000 GJ) per day in Permian Basin, where Occidental is the largest operator and oil producer. The company produced 435 thousand barrels of oil equivalent (2,660,000 GJ) per day from unconventional oil directional drilling via Permian Resources and 140 thousand barrels of oil equivalent (860,000 GJ) per day using a technique called enhanced oil recovery, whereby carbon dioxide and water are injected into underground formations to extract the oil and gas. The company also produced 293 thousand barrels of oil equivalent (1,790,000 GJ) per day in the Denver Basin.
Middle East
The company's oil and gas operations in the Middle East are in Oman, Qatar, and the United Arab Emirates and are via production sharing agreements. The region produced 251 thousand barrels of oil equivalent (1,540,000 GJ) per day, representing approximately 19% of 2020 total production. The region also held 28% of the company's proved reserves in 2020.
The company is the largest independent oil producer in Oman. In Qatar, the company is the second-largest oil producer offshore and is a partial owner in the Dolphin Gas Project, which delivers gas to Oman and the United Arab Emirates.
Colombia
In Colombia, which accounted for 32 thousand barrels of oil equivalent (200,000 GJ) per day of production, or 2% of total production in 2020, the company operates the Caño Limón oilfield.
Chemical
OxyChem, a wholly-owned subsidiary, manufactures polyvinyl chloride (PVC) resins, chlorine, and sodium hydroxide (caustic soda) used in plastics, pharmaceuticals, and water treatment chemicals. Other products manufactured by the company include caustic potash, chlorinated organics, sodium silicates, chlorinated cyanuric acid (isocyanurate), and calcium chloride. OxyChem has manufacturing facilities in the United States, Canada, and Chile. In a joint venture with Church & Dwight, OxyChem owns Armand Products Company, which sells potassium carbonate and potassium bicarbonate.
Decarbonization projects
In June 2024, Occidental Petroleum signed a memorandum of understanding with TAE Technologies to explore commercial opportunities for using TAE's nuclear fusion technology to provide clean electricity and heat for Occidental's direct air capture (DAC) projects. DAC is an energy-intensive process that involves removing CO2 from the atmosphere, and the partnership aims to address the energy needs of DAC with low-carbon power solutions. TAE Technologies, known for its advanced nuclear fusion research, plans to have a demonstration project by 2025 and a commercial facility in the 2030s. This collaboration reflects Occidental's commitment to reducing its carbon footprint and developing sustainable energy solutions for its operations.
See also
- List of oil exploration and production companies
Books
- Epstein, Edward Jay. Dossier: The Secret History of Armand Hammer. New York: Random House (1996). ISBN: 978-0679448020. 418 pages.
