Occidental moves headquarters to Houston, plans to spin off California
2/14/2014 12:00:00 AM
Occidental Petroleum is separating its California assets into an independent publicly-traded company and moving its headquarters to Houston, the company announced on Friday.
After the breakup, the remaining Occidental Petroleum will relocate its headquarters from Los Angeles to Houston, where it will be headed by current CEO Stephen Chazen through at least 2016.
In the new arrangement, Occidental will hold exploration and production operations in Texas, the Middle East and Colombia; a midstream and marketing segment; and Occidental’s chemical subsidiary, OxyChem.
“Creating two separate energy companies will result in more focused businesses that will be competitive industry leaders,” CEO Stephen Chazen said
Occidental says the new California company, which has yet to be named, would rank as the state's largest oil and natural gas producers.
The new company will be at the forefront of efforts to harvest the Monterey Shale, estimated by US energy officials to hold as much as 15 billion bbl of oil, or two-thirds of the nation’s potential shale-oil resources.
The company produces the equivalent of 154,000 bpd of oil and natural gas in California and its operations there generated revenue of $4.3 billion last year with $1.7 billion of capital expenditure.
The California company could be worth as much as $19 billion and carry as much as $5 billion of debt, according to analysts.
Additional reporting from Bloomberg News
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