An international oil and gas exploration and production company, Occidental Petroleum Corporation will relocate its headquarters to Houston, Texas
, after its Board of Directors authorized the firm’s California assets to form an independent company.
In Texas Occidental Petroleum said it “will have exploration and production operations in the Permian Basin and other parts of Texas, the Middle East region and Colombia. It will also have a midstream and marketing segment and a chemical subsidiary, OxyChem.
“Creating two separate energy
companies will result in more focused businesses that will be competitive industry leaders,” said Stephen I. Chazen, Occidental’s President and CEO.
“Each of these segments is a leader in its respective sector. The company believes that it will be better positioned to continue its strategy of generating growth with strong returns on capital and consistently increasing its dividend. Consistent with Occidental’s strategic review to focus in core businesses, it also plans to reduce its exposure to proprietary trading activities related to crude oil and other commodities,” the Occidental officials said.
"Occidental Petroleum is the largest oil producer in Texas and one of the largest in the nation, so it seems only fitting the company would locate its headquarters in Houston, the Energy Capital of the World," Texas Gov. Rick Perry said. "Oxy ranks 125 on the Fortune 500 list, and the company's move is further evidence Texas has built the most dynamic, pro-growth economy in the nation."
The new California company will have 8,000 employees and contractors and will establish its headquarters in the state, the company said. “It will be California’s largest natural gas producer and the state’s largest oil and gas producer on a gross-operated barrels of oil equivalent basis. This new company will be the largest oil and gas mineral acreage holder in the state with approximately 2.3 million net acres, and will have major operations in the state’s high-potential oil and gas basins, including Los Angeles, San Joaquin, Ventura and Sacramento."
Occidental will continue planning for the separation of the businesses, including determining management and governance of the California business. The Company expects to announce the California management team in the third quarter of this year and complete the separation by the end of 2014 or the early part of 2015.
The separation is subject to market conditions, customary regulatory approvals including the sufficiency of a Form 10 filing with the SEC, execution of intercompany agreements, acceptance of the new company’s stock for listing and final approval by the Board of Directors. Occidental expects to incur one-time charges related to the separation, which will be quantified at a later date.