Veteran of Permian benefits from boom
HOW did Occidental Petroleum Corp. climb into the top 10 of the Chronicle 100? One word: Permian. Occidental has long had a major presence in the Permian Basin. It expanded its holdings there significantly in 2000 with the $3.6 billion to acquisition of what was then Texas’ largest oil and gas producer, Altura Energy, and grew further to become the Permian’s largest landholder, with about 2.5 million net acres in the prolific shale play that spans West Texas and New Mexico.
The Permian is the epicenter of Occidental’s business, said CEO Vicki Hollub, and it will continue to be the company’s focal point for years to come,
“At least since 2000, the Permian became the foundation of our company,” Hollub said. “So, the Permian also now is our growth engine as well.”
Occidental’s revenues rose nearly 25 percent last year to $12.5 billion. The company swung to a profit of $1.3 billion in 2017, after a 2016 loss of $574 million. The company has a stock market value of about $65 billion.
Occidental, known as Oxy, also has a growing petrochemical business, OxyChem, which recently expanded dramatically outside of Corpus Christi. It has holdings in the Middle East and is building out its Ingleside export terminal to ship crude oil worldwide.
But Oxy is best known in the industry for enhanced oil recovery, the process of injected carbon dioxide to force more oil to the surface and extend the life of mature wells. The process is considered more environmentally friendly because it reduces carbon emissions by trapping the carbon in the ground, and because more oil is produced without drilling as many wells.
Just last year, Oxy paid $600 million to acquire more wells for enhanced oil in the Permian from Hess Corp. of New York.
Occidental was a California company for most of its history. The company became one of the largest oil producers in Texas and moved its headquarters from Los Angeles to Houston in 2014.
“We had this almost disconnected corporate office in L.A., but the heartthrob of the company has always been in Houston,” Hollub said. “The move connected the corporate part of the company with the main part of the operations.”