A bigger Permian footprint for the future
Occidental Petroleum took in nearly $18 billion last year as its revenues spiked by more than 40 percent, but this success pales beside the gargantuan news Oxy has generated in 2019 as it outbid Chevron last month to buy The Woodlandsbased Anadarko Petroleum for $38 billion.
Oxy, a hugely successful company by most standards, is taking a big bet on itself and on crude oil prices by going for scale and growing even more in the Permian, where the
Houston oil and gas firm was the top producer last year.
“We were not going to let it be taken away,” said Oxy Chief Executive Vicki Hollub, just one day after Chevron withdrew from the bidding war. “This is too important.”
The bidding victory for Anadarko came after a whirlwind tour for Hollub that saw her trekking to Paris to convince French energy major Total to buy Anadarko’s Africa assets and then to Omaha, Neb., to get Warren Buffett to commit $10 billion to the deal. Those steps helped Oxy strengthen its offer.
Despite the recent operatic drama, Oxy in 2018 focused on steady and efficient growth, continuing to methodically expand in the Permian while drilling increasingly more productive wells. That all helped Oxy rank sixth in this year’s Chronicle 100 list of top public companies.
Oxy’s specialty remains its enhanced oil recovery strategy, called EOR, which involves injecting carbon dioxide to force more oil to the surface and extend the life of mature wells.
To help feed its growing demand for carbon, Oxy in May said it is designing the first “direct air capture” plant in West Texas to suck carbon dioxide out of the sky so it can be injected into the ground during the EOR process.
“We believe our niche in this environment is to be the company that can help the United States lower
CO2 emissions,” Hollub said in a previous interview.
Or, as another Oxy executive emphasized:
“First and foremost, it’s to enhance Oxy’s profitability,” said Richard Jackson, who oversees Oxy Low Carbon Ventures, the company’s venture capital arm. “The second is to reduce atmospheric greenhouse gas concentrations.”