Occidental Petroleum Corporation
Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States and internationally. It operates through Oil and Gas and Midstream and Marketing. The Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas. This segment also optimizes its transportation and storage capacity and invests in entities. The Midstream and Marketing segment purchases, markets, gathers, processes, transports and stores oil, condensate, NGLs, natural gas, carbon dioxide, and power. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.
What does it do?
Occidental Petroleum is one of America's biggest oil and gas companies — it finds oil underground, pumps it out, and sells it. Think of it like a mining company, but for crude oil and natural gas. They operate mostly in the Permian Basin in Texas and New Mexico, one of the richest oil fields on the planet, plus operations in the Middle East and Latin America. They also have a chemicals business called OxyChem that makes materials used in plastics and other everyday products.
Occidental became a household name among investors when Warren Buffett's Berkshire Hathaway started aggressively buying its stock, eventually owning over 28% of the company — that kind of endorsement from the world's most famous investor puts OXY on everyone's radar. Oil prices directly affect everything from gas at the pump to global inflation, so how OXY performs is a real-time signal of where energy markets are heading. At a $51 billion market cap, it's big enough to move markets but small enough that a swing in oil prices can dramatically change its fortunes.
How does it make money?
OXY makes the vast majority of its money by pumping oil and gas out of the ground and selling it at whatever the market price happens to be — when oil is at $80 a barrel, they make a lot; when it drops to $50, they feel real pain. In its latest annual results, revenue came in at $22.1 billion, down from $26.9 billion the prior year, which tracks closely with falling oil prices during that period. The OxyChem chemicals division provides a steadier income stream that doesn't move as wildly with oil prices, acting as a partial cushion. They also have a midstream segment that handles transportation and storage of oil and gas, earning fees a bit like a toll road.
Why do investors care?
The big growth story at OXY is its $12 billion acquisition of CrownRock in 2024, which added a huge chunk of prime Permian Basin acreage and significantly boosted the amount of oil it can produce. Investors who believe oil prices will stay elevated — driven by global demand, OPEC supply discipline, or geopolitical tensions — see OXY as a leveraged bet on that view, meaning its profits can rise much faster than oil prices when things go right. Berkshire Hathaway's continued buying is a major confidence signal, as Buffett rarely backs companies he doesn't think are deeply undervalued. For the thesis to work, oil prices need to hold above roughly $70 a barrel, the company needs to successfully pay down the debt taken on for the CrownRock deal, and OxyChem needs to stay profitable.
Deep Dive
MemberA full investor briefing on Occidental Petroleum Corporation — history, leadership, risks, and outlook.