Occidental Petroleum Corporation (Oxy) is currently undergoing strategic review and as a result of this process the Board of Directors have agreed to the separation of Oxy’s California assets into an independent and separately traded company. It is expected fully separation will be completed by the end of 2014 or early 2015.
It has been disclosed that the new California-based company will employ 8,000 employees and contractors. It will be both the state’s biggest natural gas producer as well as the largest oil and gas producer. It will also have approximately 2.3 million new acres of land making it the largest oil and gas mineral acreage holder in the state. There are already plans to have the new company involved in high-potential oil and gas basins, such as Los Angeles, San Joaquin, Ventura and Sacramento.
Oxy will continue to be headquartered in Houston, Texas and have exploration and production operations in the Permian Basin along with other areas of Texas. There are also plans to have a midstream and marketing segment and a chemical subsidiary, tentatively named, OxyChem. The company maintains that it will be better able to generate growth with strong returns on capital and consistently increasing its dividend.
Stephen Chazen, current president and CEO, will remain in his roles for Oxy. He will be leading the successful completion of the strategic review and ensure a quality management team is prepared for Oxy. He has stated, “Creating two separate energy companies will result in more focused businesses that will be competitive industry leaders.”