Occidental Petroleum

• 1. Introduction

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  Occidental Petroleum's Piper Alpha platform stood in the Scottish North Sea until the night of the 6th of July, 1988. A gas condensate pump that had been taken out of service was restarted with its pressure safety valve missing. Gas escaped. An explosion followed, then a fire that burned through the night. By morning, 167 workers were dead. It remains the world's deadliest offshore oil disaster.

  The inquiry that followed blamed inadequate maintenance and safety procedures by Occidental. No criminal charges were ever brought. The company continued to operate.

  How does a company founded in Los Angeles in 1920 wind up negotiating with Gaddafi and leaving a toxic legacy in Niagara Falls? And how does it survive the world's worst offshore oil accident to execute the fourth-largest oil and gas acquisition in history? Those questions open a story that runs from the Scottish coast to the Amazon basin.

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• 2. Hammer Takes Control

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  In 1957, Armand Hammer acquired a controlling stake in a small California oil company. He immediately installed himself as president and chief executive. He would hold both roles until his death in 1990.

  Under Hammer, Occidental moved quickly across borders. Through the 1960s, the company established operations in Peru, Venezuela, Bolivia, Trinidad, and the United Kingdom. In 1961, it discovered the Lathrop Gas Field in Lathrop, California. In 1971, Occidental received approval to build an oil refinery at Canvey Island in Essex, England. Construction stopped in 1975 when the energy crisis made the project unviable. When the derelict site was eventually cleared, only concrete foundations and a river jetty remained.

  In 1973, Hammer completed a large barter agreement with the Soviet Union. Occidental and Tower International, a second firm that Hammer controlled, would export phosphate mined in northern Florida to the Soviet Union. The Soviets, in return, would ship natural gas from the ports of Odessa and Ventspils through Hammer's firms. That gas would then be converted into ammonia, potash, and urea. The total estimated value of the exchange was $20 billion. Soviet port facilities built for the deal were partly financed by the Export-Import Bank, with an endorsement from President Nixon.

  In 1984, a disagreement with billionaire David H. Murdock tested Hammer's grip on the company. Murdock owned about 5% of Occidental's shares and held a board seat. After clashing with Hammer, Murdock sold his stake back to the company. Occidental paid greenmail, purchasing Murdock's shares at $40.09 each. The market price at the time was $28.75.

  Former U.S. Senator Albert Gore Sr. had been a long-time personal friend of Hammer's. Gore served on Occidental's board. In September 1972, Gore became the head of Island Creek Coal Company, an Occidental subsidiary in Tennessee. He had lost an election for the United States Senate in 1970. Gore owned shares in the company. After Hammer's death, the Gore family's connection to Occidental continued to draw attention. In 1998, former Vice President Al Gore inherited shares in the company following his father's death. Critics cited the family's long ties to Occidental as evidence of impropriety. The shares were immediately sold.

  In 1991, Occidental sold its stake in IBP, Inc., a large beef and pork company it had acquired in 1981. Two years later, in 1993, it sold its remaining coal operations.

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• 3. The Hooker Inheritance

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  In 1968, Occidental acquired Hooker Chemical Company. Hooker had been disposing of chemical waste at a site called Love Canal, in Niagara Falls, New York, since 1942. By 1947, Hooker had become the sole owner and user of that site. By 1952, the site was filled to capacity and closed off.

  In 1953, the company leased the land to the local school board. The board planned to build a school on an unused area of the dump. Later in the 1950s, when the school board threatened to use eminent domain to take the land, the company sold it. A school was built on the site. A residential neighborhood grew on adjacent land. During construction, the four-foot clay seal containing the waste was breached.

  By 1978, residents were reporting unusual rates of cancer and birth defects in the Love Canal area. The story became a national news event. In 1980, President Jimmy Carter declared a federal emergency. Residents were eventually relocated. The company paid $129 million in restitution.

  In 1982, Occidental acquired land in the Copper Basin in Tennessee. The site had formerly been the Burra Burra Mine, where copper and sulfur were extracted in the 1800s. In 2016, the company agreed to spend $50 million to clean up the basin and restore the water quality of its creeks.

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• 4. Decades in Libya

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  Occidental won exploration rights in Libya in 1965. The company operated there until 1986, when United States economic sanctions forced a suspension of all activities.

  In August 1973, before those sanctions arrived, Libya nationalized 51% of Occidental's assets in the country. The company renegotiated rather than leaving. In February 1974, Occidental announced a 35-year oil exploration agreement with the Libyan government. Under that arrangement, 81% of the oil Occidental extracted would go to Libya. The remaining 19% would stay with Occidental.

  After the United States lifted its embargo on Libya in 2004, Occidental moved quickly to return. In 2005, Occidental and its partner Liwa won 9 of the 15 spots in the EPSA-4 exploration auction. That result made both companies among the earliest to re-enter the Libyan oil market after sanctions ended.

  In 2008, Occidental was among six oil companies criticized for hiring the law firm Hogan Lovells. The firms had engaged Hogan Lovells to lobby against legislation written by U.S. Senator Frank Lautenberg of New Jersey. That legislation would have allowed American terror victims to seize assets of countries found liable for terror attacks. One of those countries was Libya, which had been linked to the 1988 bombing of Pan Am Flight 103 over Lockerbie. Occidental was also criticized for lobbying to remove a payment-disclosure provision from the Dodd-Frank Wall Street Reform and Consumer Protection Act.

  In June 2011, the U.S. Securities and Exchange Commission and United Kingdom prosecutors requested information from the company. The inquiry focused on the Libyan Investment Authority, an investment firm controlled by Muammar Gaddafi. Prosecutors wanted to determine whether international bribery laws had been violated. The Libyan Investment Authority's assets had been frozen by the U.S. government earlier in 2011, following Gaddafi's attacks on Libyan civilians. In 2016, the company announced an exit strategy from Libya. Its remaining operations there were sold in 2017.

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• 5. From Colombia to Bangladesh

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  In 1983, Occidental and Ecopetrol, Colombia's state-owned oil company, discovered the Caño Limón oilfield in Arauca. That discovery established a major operational base for Occidental in Colombia. The complex at Caño Limón would later figure in a deadly incident that drew international scrutiny.

  On the 13th of December, 1998-17 civilians were killed in the hamlet of Santo Domingo in Colombia. Seven of those killed were children. The Colombian Air Force had dropped a cluster bomb. AirScan, a security contractor working for Occidental, had misidentified the hamlet as a hostile guerrilla target. Three AirScan employees had been flying the plane from which they provided coordinates to the military. The operation was planned at Occidental's Caño Limón complex. In April 2003, Luis Alberto Galvis Mujica, a witness and survivor, sued Occidental. A court later ruled that the company was not liable for the incident.

  From 1992 to 2001, the company attempted to drill for oil on territory belonging to the U'wa people of northeast Colombia. The U'wa resisted throughout. They feared that oil development would bring outsiders and make their territory a target for armed groups active in the area. Tribal beliefs held that oil is the blood of the earth and should not be removed. After years of legal battles, protests, and shareholder resolutions, Occidental abandoned the project in 2002. A test well had also come back empty. The Spanish oil company Repsol took over the project.

  On the 14th of June, 1997, an explosion at the Magurchhaqra gas field in Bangladesh destroyed large areas of Lawachara National Park. Occidental had been drilling at the field, which was located in Kamalganj Upazila in the Moulvibazar District. Twenty-eight tea gardens in the surrounding area were damaged. Estimated damages ranged from 90 to 140 billion taka. The government of Bangladesh demanded compensation. Occidental left the country without paying, handing the well over to Unocal, which later sold its interests to Chevron.

  On the 10th of May, 2007, a group of 25 Achuar people filed suit against Occidental in the United States. The plaintiffs alleged that between 1971 and 2000, Occidental had dumped nine billion barrels of toxic oil byproducts into drainage basins in Peru. Those byproducts included cadmium, lead, and arsenic. The Achuar relied on the affected waterways for drinking, fishing, and bathing. A 2006 study by Peru's Ministry of Health found that 197 of the 199 people tested had blood cadmium levels above safe thresholds. In March 2010, the U.S. Court of Appeals for the Ninth Circuit agreed that the case should be heard in the United States. In 2013, the U.S. Supreme Court declined to hear Occidental's appeal. In March 2015, the company settled for an undisclosed amount. The funds were directed to health, education, and nutrition projects in five Achuar communities in the Corrientes River basin.

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• 6. The Irani Era

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  In 1990, Ray R. Irani became chairman and chief executive of Occidental. The company's market capitalization at that time stood at $5.5 billion. Over the following decades, that figure rose to $80 billion. Irani guided the company as it shed unrelated businesses and focused on oil and gas.

  In 2007, it emerged that Irani had received $460 million in compensation for the year 2006. Two major shareholders, CalSTRS and Relational Investors, formally objected to the company's pay policies. In May 2011, Irani retired as chief executive. President Stephen I. Chazen was named to replace him. In 2013, shareholders voted to remove Irani as chairman.

  In 2006, Ecuador's government seized Occidental's interest in block 15 of the Amazon rainforest. The company took a $306 million after-tax charge. A 2012 arbitration award from the International Centre for Settlement of Investment Disputes set compensation at $1.77 billion. In 2016, Ecuador agreed to pay Occidental $980 million, reduced from that original figure.

  In October 2009, Occidental acquired the Phibro energy-trading business from Citigroup for approximately $250 million in net asset value. Phibro had been managed by Andrew J. Hall, who received approximately $100 million per year in 2007 and 2008. After the acquisition, the division reported its first losses since the 1990s. In 2016, Phibro was wound down and sold.

  In December 2010, Occidental spent $1.4 billion acquiring shale oil properties in the Williston Basin in North Dakota. Those assets were sold in 2015 for $600 million. In September 2014, Occidental moved its headquarters to Houston, Texas. In October 2015, the company completed the first phase of a $500 million carbon dioxide flooding project in Hobbs, New Mexico.

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• 7. Vicki Hollub's Pivot

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  Vicki Hollub joined Occidental in 1981 and joined the board in 2015. In May 2016, she was named chief executive, becoming the first woman to lead a major American oil and gas company.

  In August 2019, Occidental acquired Anadarko Petroleum for $57 billion. The deal was backed in part by a $10 billion commitment from Berkshire Hathaway, made by CEO Warren Buffett. Berkshire received 100,000 shares of cumulative perpetual preferred stock at a value of $100,000 per share. It also received a warrant to purchase up to 80 million additional shares at $62.50 each. Anadarko also brought significant legacy liabilities. These included involvement in the largest environmental contamination settlement in American history and fines under the Clean Water Act.

  By 2020, Occidental's U.S. operations were producing 1,037 thousand barrels of oil equivalent per day. Of that, 575 thousand barrels came from the Permian Basin in Texas and New Mexico, where Occidental is the largest operator and oil producer. The Denver Basin contributed another 293 thousand barrels per day.

  In October 2020, Occidental sold its onshore operations in Colombia to the Carlyle Group for $825 million. The deal included operations in the Llanos Norte, Middle Magdalena, and Putumayo Basins.

  In August 2023, Occidental acquired Carbon Engineering, a direct air capture technology company, for $1.1 billion. Direct air capture removes carbon dioxide from the atmosphere. In June 2024, Occidental signed a memorandum of understanding with TAE Technologies. The two companies plan to explore using nuclear fusion as a power source for direct air capture. TAE has a demonstration project planned for 2025 and a commercial facility expected in the 2030s.

  In December 2023, Occidental agreed to acquire CrownRock, a Permian Basin producer, for $12 billion. That deal closed in August 2024.

  In October 2025, Occidental sold OxyChem, its chemical subsidiary, to Berkshire Hathaway for $9.7 billion. Berkshire by then owned 28% of Occidental's stock. Occidental said it would use $6.5 billion of the proceeds to lower its debt. The company retained all legacy environmental liabilities for OxyChem. On the 26th of March, 2026, Reuters reported that Hollub was preparing to retire. She is expected to be succeeded by chief operating officer Richard Jackson, with Hollub remaining on the board in an advisory capacity.

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