Occidental Petroleum Corp.
Occidental Petroleum (OXY)
Overview
Occidental Petroleum Corporation is a Houston, Texas-based energy company primarily engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs), with a growing sideline in carbon capture and low-carbon energy. Founded in 1920 in Los Angeles, Oxy is now one of the largest independent oil and gas producers in the United States and the single largest operator in the Permian Basin. The company generates roughly $22-24 billion in annual revenue, carries a market capitalization near $61 billion, and — following the October 2025 sale of its chemicals subsidiary OxyChem — now runs a lean workforce of around 10,400 employees, a sharp reduction from the tens of thousands it employed when its chemicals business was still in-house.
What They Do & How They Make Money
Oxy's core business is straightforward: it finds, extracts, and sells hydrocarbons. Revenue comes primarily from selling crude oil, natural gas, and NGLs produced from its own wells in the Permian Basin (Texas/New Mexico), the Rockies, the Gulf of America, and international operations in Oman, Qatar, and the United Arab Emirates. Prices are largely set by global commodity markets, so Oxy's profitability rises and falls with oil and gas prices, though the company also uses hedging and enhanced-oil-recovery techniques (it is one of the world's largest users of CO2 injection to boost output from mature fields) to manage volatility and extend well life. A secondary but strategically important revenue stream comes from its Midstream and Marketing operations, which purchase, gather, process, transport, and store hydrocarbons — both its own and third parties' — and market them to refiners and other buyers, capturing margin on logistics and trading rather than production economics.
Until October 2025, Oxy also owned OxyChem, a large basic-chemicals manufacturer (chlorine, caustic soda, PVC resin) that generated stable, non-commodity-cyclical cash flow. Oxy sold OxyChem to Berkshire Hathaway for $9.7 billion, a transaction that both raised cash to pay down debt from its 2019 Anadarko and 2024 CrownRock acquisitions and simplified Oxy into a more focused upstream-and-carbon-management company. Berkshire, which had already financed the Anadarko deal and built an equity stake in Oxy, expanded its ownership to roughly 28% through the OxyChem transaction, making it Oxy's largest and most influential shareholder.
Business Segments
Following the OxyChem divestiture, Oxy now reports primarily through two segments:
- Oil and Gas — the dominant segment, accounting for roughly 95% of revenue (about $20.9 billion in FY2025). It covers exploration, development, and production of crude oil, condensate, NGLs, and natural gas across the Permian Basin, Rockies, Gulf of America, and Middle East (Oman, Qatar, UAE). The Permian Basin, significantly expanded by the 2024 CrownRock acquisition (~$12 billion), is the anchor asset, with the U.S. supplying roughly three-quarters of total production.
- Midstream and Marketing — roughly $1.3 billion in revenue, covering the purchasing, marketing, gathering, processing, transportation, and storage of oil, NGLs, natural gas, CO2, and power, both for Oxy's own barrels and third-party volumes.
Alongside these reporting segments, Oxy runs Low Carbon Ventures / 1PointFive, its carbon-management and direct-air-capture (DAC) business, built around the $1.1 billion 2023 acquisition of Carbon Engineering. This unit operates the Stratos DAC facility in Texas and is developing additional projects, including the Blue Point One low-carbon ammonia facility in Louisiana (with Enbridge handling CO2 transport and sequestration). While not yet a major revenue contributor, it is central to Oxy's long-term strategy of monetizing carbon removal via 45Q tax credits, carbon markets, and enhanced oil recovery.
Competitors
- Upstream/Permian Basin production: ExxonMobil (post-Pioneer Natural Resources acquisition), Chevron, ConocoPhillips, Diamondback Energy, EOG Resources, Devon Energy, and Coterra Energy compete directly for Permian acreage, drilling economics, and production growth.
- Midstream/marketing: competes indirectly with dedicated midstream operators such as Kinder Morgan, Energy Transfer, and Targa Resources for gathering and processing volumes in its operating basins.
- Carbon capture/DAC: Climeworks, ExxonMobil Low Carbon Solutions, and Chevron New Energies are the closest peers in large-scale direct air capture and carbon management, an early-stage field where Oxy has positioned itself as a first mover.
Competitive Position
Oxy's central competitive advantage is scale and depth of inventory in the Permian Basin, where it is the largest producer; the CrownRock acquisition added a substantial, low-breakeven-cost position in the Midland Basin that supports years of drilling inventory. Berkshire Hathaway's large equity stake and history of providing capital (the 2019 preferred-equity financing, the 2025 OxyChem purchase) function as both a balance-sheet backstop and a market signal of confidence, though it also concentrates influence with a single outside shareholder. Oxy's leadership in direct air capture — through Stratos and its broader 1PointFive platform — gives it an early, differentiated position in an emerging carbon-management market that few oil majors have committed capital to at similar scale, potentially opening new revenue streams tied to climate policy and carbon credits.
The key risks are commodity-price volatility, since upstream cash flow is directly exposed to swings in oil and gas prices; a debt load built up through the Anadarko and CrownRock acquisitions that constrains financial flexibility even after the OxyChem sale reduced leverage; and execution risk in the low-carbon business, where DAC economics remain unproven at commercial scale and dependent on government tax credits and a still-nascent voluntary carbon market. A leadership transition is also underway: long-tenured CEO Vicki Hollub, the first woman to lead a major U.S. oil and gas company, is handing the role to COO Richard Jackson around early 2026, introducing some uncertainty about strategic continuity even as the broad strategic direction — Permian focus plus carbon management — appears set.