Occidental Petroleum Seeks $100B OxyChem Sale to Cut Debt

Occidental Petroleum, a prominent energy company based in Houston, is reportedly in negotiations to sell its chemical subsidiary, OxyChem. The transaction is estimated to be valued at over $100 billion, making it the largest asset divestment the company has undertaken to date. This move is part of Occidental's broader strategy to reduce its debt through asset sales, a plan that has been in motion since the completion of its acquisition of CrownRock LP last year.

The sale of OxyChem is expected to result in the creation of one of the world's largest independent chemical companies. However, the identity of the potential buyer remains undisclosed at this time. Occidental, backed by Warren Buffett's Berkshire Hathaway, has been actively pursuing asset divestments to streamline its operations and focus on its core oil and gas businesses.

In addition to the potential sale of OxyChem, Occidental has recently formed a joint venture with Enbridge. The new company, with a 50:50 ownership structure, aims to develop the Pelican Sequestration Hub and related transportation infrastructure in Louisiana. This initiative is part of Occidental's broader commitment to carbon capture and storage, a critical component of its sustainability efforts.

The divestment of OxyChem aligns with Occidental's strategy to optimize its portfolio and enhance its financial flexibility. By shedding non-core assets, the company aims to strengthen its balance sheet and position itself for future growth. The proceeds from the sale are expected to be used to pay down debt and invest in high-return projects, further solidifying Occidental's position in the global energy market.