After nearly a century here, Westwood oil giant Occidental Petroleum Corp. is moving its headquarters to Houston.
The move, announced Friday morning along with the news that it was spinning off its California operation, is the biggest step yet in a major corporate restructuring for Occidental, aimed at boosting its profitability and shareholder confidence. The company had previously announced it was selling part of its Middle East operations, along with several oil and gas operations in other parts of the United States.
Occidental will spin off its California oil and gas assets into a separate publicly traded company. The new company will have 8,000 full-time and contract employees and will “establish its headquarters in the state,” though today’s announcement did not say where. Occidental is the state’s largest gas producer and the second largest oil producer behind Chevron Corp of San Ramon; the California operations reported earnings of $1.5 billion last year and capital expenditures of more than $2 billion.
A new management team will be in place at the California spinoff later this year.
The remainder of Occidental’s operations, including in the Permian Basin of West Texas, Colombia and the Middle East, will be run out of Houston. Occidental has gradually been shifting operations from Westwood to Houston over the past year, joining the rush of companies seeking to boost their presence in the nation’s energy capital.
Local business leaders were saddened by the news of Occidental’s move to Houston.
"There had been discussion of this for quite some time and this move was not surprising given their business operations outside the state," Jeff Millman, spokesperson for Mayor Eric Garcetti said. "Mayor Garcetti and his business team are working relentlessly to bring new companies to Los Angeles to create jobs and improve our economy."
“Houston made a strategic decision decades ago to attract corporate headquarters or major operations for energy companies and they have been very successful,” said Gary Toebben, chief executive of the Los Angeles Area Chabmer of Commerce. “Energy companies feel very welcome in Houston and in Texas.”
The Business Journal has previously reported that Occidental appeared to be moving out of Westwood, most recently in a Dec. 16 article headlined “Might Oxy Ditch L.A. to Hang Its Hat in Houston?”