Oxy to Sell Part of Mideast Operations in RestructuringFriday, October 18, 2013
Occidental Petroleum Corp. announced Friday it intends to sell part of its Mideast operations and part of its stake in a domestic pipeline company, as part of a planned restructuring.
The Westwood oil giant also will explore strategic alternatives for its oil and gas interests in the Rocky Mountain region, North Dakota and Kansas. The company said it is considering either selling or trading these assets.
Those are the beginning of an operations overhaul designed to boost investor confidence. Occidental’s share price has lagged competitors in recent years.
“These are the first formal steps in our effort to streamline the business, concentrate in areas where we have depth and scale and improve overall profitability,” Chief Executive Stephen Chazen said in a statement early Friday. “Our goal is to become a somewhat smaller company with more manageable exposure to political risk.”
Chazen emerged victorious earlier this year after a boardroom clash with former Occidental chief executive Ray Irani, who helped build up Occidental’s Middle East holdings. At stake was whether Occidental’s board would pursue Chazen’s strategy of paring down the company to improve profitability and attempt to boost shareholder value.
Analysts had long expected Occidental to sell all or part of its holdings in the Middle East nations of Iraq, Oman, Qatar and Yemen, as well as in Libya. On Friday, the company announced it would pursue the sale of minority stakes in these holdings.
The company also announced it was looking to sell roughly 30 percent of its 35 percent stake in Plains All American Pipeline LP, a domestic pipeline company. The sale is expected to bring in roughly $1.3 billion before taxes. The rest of Occidental’s stake in the pipeline company is worth about $3.4 billion.
Chazen said Friday that further restructuring steps will be announced in coming months.
Occidental’s share price rose 21 cents on Friday to close at $98.29 on the NYSE.