Occidental Petroleum CorporationOXY

Morningstar Rating

Stock Research and Analysis

by Allen Good

Occidental Petroleum built its business around the acquisition of legacy assets and the utilization of enhanced oil-recovery techniques to increase production and build reserves. Continuation of this strategy in the United States, along with investment Read more

Bulls Say

Occidental's strong fiscal position provides it with the ability to take advantage of distressed assets that may come on the market.

Occidental is increasing production rates and adding to reserves when other integrated energy companies are unable to do so. Focusing on a few core areas allows the firm to leverage assets and experience.

Occidental has recently re-entered Libya after exiting in 1986. The area is expected to contribute to future growth after the completion of a 30-year contract.

Occidental is participating in the development of Iraqi oil fields. Although early in the process, this could produce significant long-term growth opportunities.

Recent exploration in California has proved promising and will likely lead to future low-cost production. Read more

Bears Say

Occidental is a relatively small player in a highly competitive global industry with much larger players with more technology and financial resources. Larger players will be in more advantageous positions as resources become scarcer.

Low natural gas prices will slow the pace of development at its Piceance Basin assets.

The majority of the company's resources are in declining U.S. fields. Future production growth will be more difficult and costly to attain.

The weak U.S. economy and reduced demand will likely hurt the volumes and profits among the chemicals businesses. Read more

Strategy

Occidental Petroleum's strategy is to acquire mature oil and gas assets that it keeps viable through enhanced oil-recovery techniques. Although still concentrated in the U.S., it has recently expanded Read more

Management

Ray Irani has been chairman and CEO since 1990. Even considering Occidental's above-average performance during the last few years, to say the firm's executives are well-compensated would be an understatement. In 2008, the top five executives earned Read more

Profile

Occidental Petroleum is an energy company specializing in the exploration and production of crude oil and natural gas through enhanced oil recovery, primarily in the United Read more

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