Hollub says Occidental ready for ‘harvesting’ phase after OxyChem deal

Occidental Petroleum Corp., Houston, will emphasize using existing infrastructure to get more from its reserves while building its unconventional enhanced oil recovery work in coming years.

The greater focus on US assets—with the Permian basin at the core—comes after a 2-year span in which Vicki Hollub, president and chief executive officer, and her team spent $12 billion to buy CrownRock LP and announced a deal to sell the company’s OxyChem petrochemicals subsidiary to Berkshire Hathaway Inc. for $9.7 billion and use $6.5 billion of that amount to pay down debt. 

Asked on a conference call Nov. 11 by Melius Research analyst James West if she is ready for “a quieter period, maybe a harvesting-type of a period,” Hollub chuckled and said, “Absolutely.”

“I’m thankful to be at this point, finally,” she added. “This is where we wanted to be and this is where we needed to be. We’ve done everything that we set out to do with respect to being mostly a US company and with very high-quality, high-margin assets and assets that can sustain over the long term.”

In the 3 months that ended Sept. 30, Occidental produced nearly 1.47 MMboe/d globally, which was an increase of almost 5% from the second quarter and up 4% from the same period in 2024. US oil production was 634,000 b/d—which was also up 4% year over year—while total output was 1.23 MMboe/d. 

Production growth from US assets came predominantly from the Permian basin, where oil production rose to 422,000 b/d and total output rose to a record 800,000 boe/d. Helping drive the company’s results in the Permian was a 14% improvement from a year ago in shale well costs.

The Occidental team wants to merge those efficiencies and its expertise in enhanced oil recovery(EOR) in conventional plays into an expansive push to get more from its unconventional assets in the Permian. A small number of tests using carbon dioxide (CO₂) injections have generated a 45% increase in oil output and work is under way on three projects comprising about 60 wells apiece. (See map.)

The company’s pipeline of such projects, executives said, sits at about 30 and each of them could deliver returns of more than 25% and generate about $100 million in cash over a decade, assuming a $60/bbl oil price for West Texas Intermediate (WTI).

During the third quarter, Occidental produced a net profit of $842 million (versus $1.1 billion in third-quarter 2024) on revenues of more than $6.7 billion. Capital spending for the period was $1.8 billion, keeping the company on pace a full-year total of about $7.2 billion.

Looking ahead to 2026, Hollub and her team expect that figure to drop to $6.3-6.7 billion, with the $400 million range dedicated to spending in the Permian basin and dependent on broader market conditions. That spending, chief financial officer Sunil Mathew told investors, translates to production growth of up to 2%.

Shares of Occidental (Ticker: OXY) rose slightly on Nov. 11, closing at $41.85. They are essentially flat over the past 6 months and the company’s market capitalization is now about $41 billion.