Occidental Petroleum Corp. said Wednesday that it will invest $500 million to develop two oil and gas fields in the Middle East country of Abu Dhabi.

The Los Angeles oil and gas exploration and production company said it will pay Abu Dhabi National Oil Co. for the rights to appraise and develop the Jarn Yaphour and Rahman oil and gas fields. It will operate both fields and hold 100 percent of the output.

First production from Jarn Yaphour, located onshore near the capital city of Abu Dhabi, is expected in 2009, it said. Production at Rahman, located in shallow water near the company’s Abu Dhabi refinery, could begin as early as 2011

“This is an important step in the implementation of our growth strategy and in our relationship with the Emirate of Abu Dhabi,” said Chief Executive Ray Irani in a statement.

Occidental shares were up $1.96, or 3.5 percent, to $55.84 in morning trading on the New York Stock Exchange.