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Energy Business
Alexander Fernandez
Alexander Fernandez
 · Posted in Energy Business

Occidental Petroleum: Balancing Oil & Carbon in a Volatile Market

Occidental Petroleum (OXY): Balancing Traditional Energy with Low-Carbon Innovation
Industry: Oil & Gas Exploration & Production (E&P)
Market Cap: $39.62 billion

Financial Snapshot – Q4 2024

Occidental Petroleum’s Q4 2024 results reflect broad-based declines amid continued investment in strategic initiatives:

  • Total Revenue: RMB 26.73 million (↓5.42% YoY)

  • Net Income: RMB 2.36 million (↓36.94% YoY)

  • Earnings Per Share (EPS): RMB 2.44 (↓37.18%)

  • EBITDA: RMB 12.62 million (↓11.38%)

  • Operating Cash Flow: RMB 11.44 million (↓7.04%)

  • Free Cash Flow: RMB 4.52 million (↓25.47%)

  • Capital Expenditures (CapEx): RMB -6.92 million (↑10.85%)

Despite short-term financial pressures, the increase in CapEx signals a continued commitment to long-term asset development and energy transition goals.

Segment Highlights

Oil & Gas

Occidental invested $5.3 billion in 2024 CapEx to advance its upstream portfolio, targeting key regions including the Permian Basin, DJ Basin, Gulf of Mexico, and Oman. For 2025, CapEx is expected to increase to $5.8–$6 billion.

Key Development: CrownRock Acquisition
Occidental completed a $12.4 billion acquisition of CrownRock, a major Permian Basin operator. The deal includes:

  • $9.4 billion in cash

  • 29.6 million shares of OXY stock

  • Assumption of $1.2 billion in CrownRock debt

This acquisition significantly enhances Occidental's upstream asset base in one of the most prolific oil-producing regions in the U.S., reinforcing its long-term growth strategy.

OxyChem (Chemicals Division)

OxyChem continues to deliver stable cash flows through its vertically integrated chlorovinyls operations, including caustic soda, chlorine, and PVC.

  • 2024 CapEx: $685 million

  • Major project: Upgrading the Battleground chlor-alkali plant to membrane technology (completion by 2026)

  • Strategy: Maintain low-cost leadership and explore M&A to expand the portfolio

Midstream & Marketing + Low Carbon Ventures

This segment focuses on optimizing infrastructure and advancing carbon capture initiatives.

  • 2024 CapEx: $880 million

  • Key Project: Construction of the STRATOS Direct Air Capture (DAC) facility in Texas

    • Expected to be the first commercial-scale DAC plant

    • Operational launch: Mid-2025

Occidental Low Carbon Ventures (OLCV) is leading the company’s efforts in carbon capture, utilization, and storage (CCUS) — positioning OXY as a frontrunner in the low-carbon energy transition.

Strategic View: Traditional Energy Meets Climate Innovation

Occidental’s performance reflects a business in strategic transition. While Q4 results were challenged by commodity price volatility and increased capital spending, the long-term vision remains clear:

  • Upstream growth through high-impact acquisitions (e.g., CrownRock)

  • Low-carbon leadership via projects like STRATOS and OLCV initiatives

  • Capital discipline, with efforts to reduce debt, reward shareholders, and invest selectively

Investment Considerations

Occidental offers a differentiated proposition for energy investors:

  • Exposure to legacy oil & gas with strong upstream assets

  • Participation in the emerging carbon economy

  • Positioned to benefit from growing interest in CCUS technologies

Risks: Commodity price fluctuations, project execution risks, and evolving carbon market regulations.

Conclusion

Occidental Petroleum continues to position itself at the intersection of hydrocarbon development and low-carbon innovation. While current financials show near-term softness, the company’s strategic investments, disciplined capital approach, and climate-aligned initiatives create a long-term value proposition that stands out in a transitioning global energy landscape.