Occidental Petroleum Corporatio: history, ownership, mission, how it works & makes money

A Brief History of Occidental Petroleum Corporation

Occidental Petroleum Corporation, founded in 1920, has a storied history marked by strategic expansion and significant milestones in the oil and gas industry. Initially, the company focused on oil exploration in California, which laid the groundwork for its growth.

In the 1970s, Occidental made headlines by acquiring the oil and gas assets of the bankrupt Pacific Western Oil Company, increasing its production capacity. By the end of the decade, Occidental had diversified its operations, extending beyond California into international territories like the Middle East and Latin America.

In 1986, Occidental made a notable acquisition by buying the assets of the Texas-based company, Pennzoil, for approximately $1.9 billion. This move solidified its position as a significant player in the oil sector.

The late 1990s saw Occidental expanding its global presence further with the acquisition of the North American assets of the oil giant, Enron, for around $6 billion. This acquisition added significant reserves and enhanced Occidental’s production capabilities.

In 2000, Occidental produced around 600,000 barrels of oil equivalent per day (BOE/d), establishing itself as one of the top oil producers in the United States. The company continued to expand its international operations, specifically in the Middle East and Africa.

In 2016, Occidental made a significant leap by acquiring the Permian Basin assets of Freeport-McMoRan for approximately $3.5 billion. This acquisition allowed Occidental to become a major player in one of the most lucrative oil regions in the United States.

Fast forward to 2019, Occidental acquired Anadarko Petroleum in a deal valued at $38 billion. This acquisition provided Occidental with substantial resources in the Permian Basin, further strengthening its position in the U.S. oil market.

As of Q2 2023, Occidental reported revenues of approximately $8.56 billion and a net income of $1.34 billion. The company’s total assets were valued at about $67.1 billion, showcasing its robust financial health and operational performance.

In recent years, Occidental has focused on sustainability initiatives, aiming to reduce its carbon footprint and invest in renewable energy projects. As of 2023, the company has committed to achieving net-zero emissions by 2050, reflecting the industry's shift towards more sustainable practices.

Overall, Occidental Petroleum Corporation has evolved from its early days in California to a significant global player in the oil and gas sector. Its strategic acquisitions and focus on resource-rich areas, particularly in the Permian Basin, underpin its current position and ongoing growth ambitions.

A Who Owns Occidental Petroleum Corporation

Occidental Petroleum Corporation, commonly referred to as Oxy, is primarily owned by a mix of institutional and retail investors. As of the latest available data, the largest shareholders include major investment firms and notable individuals. The following table summarizes significant ownership stakes in Occidental Petroleum.

As of December 2022, Occidental Petroleum had approximately 1 billion shares outstanding. The total market capitalization of the company was around $25 billion at the time. These figures highlight the significant role that institutional investors play in the ownership structure of Oxy. Notably, Warren Buffett's Berkshire Hathaway made headlines with its substantial investment in the company in 2022.

Moreover, as per the latest quarterly earnings report for Q3 2023, Occidental reported a net income of $1.8 billion with earnings per share (EPS) of $1.79. The company generated revenue of $6.5 billion, reflecting a year-over-year growth of approximately 12%.

In terms of geographical ownership, approximately 30% of shares are held by institutional investors based in the United States, while about 15% are held by international investors. This illustrates a diversified ownership base, which is significant for the company’s governance.

According to the latest SEC filings, the executive compensation for the CEO of Occidental Petroleum was reported at $20 million for the fiscal year 2022, which includes base salary, bonuses, and stock options.

The overall market dynamics and stock performance reflect a company increasingly focused on reducing debt and enhancing shareholder value amid fluctuating oil prices and operational adjustments. The ownership structure and investor confidence play crucial roles in guiding Occidental’s strategic decisions and future growth.

Occidental Petroleum Corporation Mission Statement

Occidental Petroleum Corporation (OXY) is a leading oil and gas exploration and production company based in Houston, Texas. The company's mission statement emphasizes sustainable energy production alongside environmental stewardship. The commitment to providing reliable energy that enhances the quality of life while minimizing the environmental impact is central to their operations.

As of Q3 2023, Occidental reported a net income of $1.4 billion, reflecting a significant year-over-year increase. This growth can be attributed to improved operational efficiency and higher commodity prices.

The company further aims to achieve a 30% reduction in greenhouse gas emissions by 2030 across its operations, aligning with broader climate goals. In 2022, Occidental successfully reduced its Scope 1 and 2 emissions by 15%.

Occidental has a strong focus on carbon management, with its carbon capture and storage (CCS) projects positioned to sequester 25 million tons of CO2 annually by 2030. The company is also a key player in the Permian Basin, where it operates over 3,600 active wells and has reported an average daily production of around 1.5 million BOE/d.

In addition to its robust operational metrics, Occidental's mission statement includes a commitment to innovation and technology. The company has invested over $1 billion in technology advancements aimed at enhancing oil recovery and reducing costs.

Furthermore, Occidental prioritizes safety and community engagement, contributing approximately $100 million annually to local community initiatives. Their outreach programs focus on education, environmental sustainability, and economic development.

Finally, Occidental Petroleum Corporation's mission statement underlines the importance of strategic partnerships, which have contributed to its international expansion and diversification in energy sources. The company has entered multiple joint ventures to explore renewable energy avenues, particularly in solar and wind projects, further strengthening its commitment to sustainability.

How Occidental Petroleum Corporation Works

Occidental Petroleum Corporation operates primarily in the oil and gas industry, focusing on exploration, production, and marketing of hydrocarbons. In 2022, the company reported total revenues of $30.0 billion, a significant increase from $24.1 billion in 2021.

The company’s operations are divided into three main segments: Oil and Gas, Chemical, and Midstream and Marketing. As of Q2 2023, the Oil and Gas segment accounted for approximately 77% of total revenues, reflecting the importance of hydrocarbon production in Occidental's business model.

Exploration and Production

Occidental's exploration and production activities are primarily located in the Permian Basin, the Gulf of Mexico, and international locations including the Middle East. In 2022, the company produced an average of 1.3 million barrels of oil equivalent per day (BOE/d), with about 700,000 barrels per day (BPD) derived from the Permian Basin alone.

The company invests heavily in technology and innovation, with expenditures in capital projects reaching $5.1 billion in 2022, reflecting its commitment to enhancing operational efficiency and expanding production capabilities. As of the latest reports, the company maintains proven reserves of approximately 3.4 billion BOE.

Financial Performance

Occidental's financial performance has shown resilience in a fluctuating market. For Q3 2023, the company reported earnings of $1.35 billion, translating to earnings per share (EPS) of $1.50. This marked an increase of 25% year-over-year.

Chemical Segment

Occidental's Chemical segment contributes through the production of polyvinyl chloride (PVC) and performance chemicals. In 2022, this segment brought in $4.5 billion, making up 15% of total revenues. The chemical industry is driven by both domestic and international demand, with a focus on sustainability and lower carbon emissions.

Midstream and Marketing

The Midstream and Marketing segment, which includes pipeline and storage operations, generated revenues of $2.5 billion in 2022. This segment has been crucial in providing a stable cash flow, contributing to an overall EBITDA of $8.7 billion.

As of October 2023, Occidental’s debt-to-equity ratio stands at 0.61, demonstrating a manageable level of debt given the current interest rate environment. Additionally, the company pays a quarterly dividend of $0.13 per share, reflecting a commitment to returning value to shareholders while maintaining strong operational performance.

Overall, Occidental Petroleum Corporation positions itself as a leader in the oil and gas industry by balancing its exploration and production strategy with a focus on chemical products and midstream activities, consistently aiming to enhance shareholder value and operational efficiency.

How Occidental Petroleum Corporation Makes Money

Occidental Petroleum Corporation (OXY) primarily generates revenue through the exploration and production of oil and natural gas. As of Q2 2023, the company reported a total revenue of $8.23 billion, reflecting a significant increase from the $7.01 billion reported in the same quarter of 2022.

The company's revenue streams can be categorized into two main segments: Oil and Gas Production and Chemicals. For 2022, the breakdown was as follows:

• Oil and Gas Production: $26.3 billion
• Chemicals: $4.1 billion

In the Oil and Gas segment, Occidental employs various strategies to enhance profitability, including optimizing production techniques and leveraging advanced technologies for drilling and recovery. In 2022, the average realized price for Brent crude oil was approximately $100.04 per barrel, while West Texas Intermediate (WTI) averaged $94.34 per barrel.

During the first half of 2023, the average realized price for Brent crude oil decreased to $78.12 per barrel, and WTI was at $73.45 per barrel. Despite the decline in prices, production remained strong with a total output of 1.2 million BOE/day in Q2 2023, which marked a slight increase from 1.18 million BOE/day in the same quarter of the previous year.

West Texas operations are particularly crucial for Occidental, as they accounted for approximately 35% of the company’s total production in 2022. The Permian Basin represents a significant portion of this output, with Occidental producing around 557,000 BOE/day from the basin in Q2 2023.

Moreover, Occidental's investment in carbon management technologies is emerging as an additional revenue stream. The company has committed $1.5 billion to enhance its carbon capture and storage capabilities, aiming to capture 25 million metric tons of CO2 annually by 2035. These initiatives align with growing market trends favoring sustainability and climate resilience.

Additionally, Occidental is diversifying by expanding its chemical manufacturing capabilities, which includes the production of polyolefins and other materials. The chemicals segment contributed to approximately 15% of the total revenue in 2022, showcasing the company's strategy to increase its footprint in this high-margin industry.

In terms of financial performance, as of Q2 2023, Occidental reported a net income of $1.15 billion, up from $1.03 billion in Q2 2022. The earnings per share (EPS) stood at $1.14, representing an increase from $1.02 in the previous year. This trend indicates robust operational efficiency alongside favorable market conditions.

Overall, Occidental Petroleum's diverse revenue streams—from conventional oil and gas production to innovative chemicals and carbon management—position the company well within the energy sector, allowing it to capitalize on both current market demands and future trends in sustainability.