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Cover and table of contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
| ☑ | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||||||||||||
| For the fiscal year ended | December 31, 2020 | For the transition period from to |
Commission File Number 1-9210
Occidental Petroleum Corporation
(Exact name of registrant as specified in its charter)
| State or other jurisdiction of incorporation or organization | Delaware | ||||||||||||||||
| I.R.S. Employer Identification No. | 95-4035997 | ||||||||||||||||
| Address of principal executive offices | 5 Greenway Plaza, Suite 110 | Houston, | Texas | ||||||||||||||
| Zip Code | 77046 | ||||||||||||||||
| Registrant’s telephone number, including area code | (713) | 215-7000 |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||
| Common Stock, $0.20 par value | OXY | New York Stock Exchange | ||||||
| Warrants to Purchase Common Stock, $0.20 par value | OXY WS | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☑ | Accelerated Filer | ☐ | Emerging Growth Company | ☐ | ||||||||||||
| Non-Accelerated Filer | ☐ | Smaller Reporting Company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of the registrant’s Common Stock held by nonaffiliates of the registrant was approximately $17.0 billion computed by reference to the closing price on the New York Stock Exchange of $18.30 per share of Common Stock on June 30, 2020.
At January 31, 2021, there were 931,554,718 shares of Common Stock outstanding, par value $0.20 per share.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement, relating to its 2021 Annual Meeting of Stockholders, are incorporated by reference into Part III of this Form 10-K.
 | BUSINESS AND PROPERTIES |
Part I
ITEMS 1 AND 2. BUSINESS AND PROPERTIES
In this report, “Occidental”, “we” and “our” refers to Occidental Petroleum Corporation, a Delaware corporation incorporated in 1986, or Occidental and one or more entities in which it owns a controlling interest (subsidiaries). Occidental conducts its operations through its various subsidiaries and affiliates. Occidental’s executive offices are located at 5 Greenway Plaza, Suite 110, Houston, Texas 77046; telephone (713) 215-7000.
| GENERAL |
Occidental’s principal businesses consist of three reporting segments: oil and gas, chemical and midstream and marketing. The oil and gas segment explores for, develops and produces oil and condensate, natural gas liquids (NGL) and natural gas. The chemical segment (OxyChem) mainly manufactures and markets basic chemicals and vinyls. The midstream and marketing segment purchases, markets, gathers, processes, transports and stores oil, condensate, NGL, natural gas, carbon dioxide (CO2) and power. It also trades around its assets, including transportation and storage capacity, and invests in entities that conduct similar activities such as Western Midstream Partners, L.P. (WES).
The midstream and marketing segment also includes Oxy Low Carbon Ventures (OLCV). OLCV seeks to leverage Occidental’s carbon management expertise that is derived from its enhanced oil recovery (EOR) operations to develop carbon capture, utilization and storage facilities that are expected to source anthropogenic CO2 and promote innovative technologies that drive cost efficiencies and economically grow Occidental’s business while reducing emissions.
On August 8, 2019, pursuant to the Agreement and Plan of Merger dated May 9, 2019, Occidental acquired all of the outstanding shares of Anadarko Petroleum Corporation (Anadarko), through a transaction in which a wholly owned subsidiary of Occidental merged with and into Anadarko (the Acquisition). The Acquisition added to Occidental's oil and gas portfolio, primarily in the Permian Basin, DJ Basin, Gulf of Mexico and Algeria, and an interest in WES.
For further information regarding Occidental’s segments, geographic areas of operation and current developments, see the Management’s Discussion and Analysis of Financial Condition and Results of Operations section under Part II, Item 7, of this Form 10-K and Note 18 - Industry Segments and Geographic Areas in the Notes to Consolidated Financial Statements.
| HUMAN CAPITAL RESOURCES |
Occidental’s culture of diversity, inclusion and belonging aspires to create an environment where differences are appreciated, all employees are included and everyone feels that they belong. As part of our commitment to support this culture, we conducted a robust survey across our organization. The results were reviewed with our Board of Directors and are a basis for our company’s core values.
Occidental’s human capital resources extend across several regions. Occidental has attracted a diverse work force of exceptional talent, including employees from many nations. This diversity enriches our culture, our employees' experience on the job and contributes to an innovative and effective business model that encourages local communities to thrive. Diversity, inclusion and belonging power our innovation and spirit of excellence, as well as our knowledge and results. Embedding diversity, inclusion and belonging into our culture enhances Occidental’s collaboration, performance and growth and helps uphold our organizational values. Occidental’s culture of diversity, inclusion and belonging is designed to create an environment where our employees’ differences are celebrated and encouraged. Occidental’s management works to leverage its employees’ various backgrounds, unique experiences and points of view to spark innovation, empower growth, outperform expectations and maximize results. Diversity is who we are, inclusion is how we work and belonging is how we thrive. Occidental’s recruiting, training and career development programs are designed to help every employee realize his or her full potential.
The below table approximates regional distribution of Occidental’s employees:
| North America | Middle East | Latin America | Other (a) | Total (b) | ||||||||||||||||||||||||||||
| Union | 500 | 800 | 50 | — | 1,350 | |||||||||||||||||||||||||||
| Non-Union | 7,750 | 2,500 | 100 | 100 | 10,450 | |||||||||||||||||||||||||||
| Total | 8,250 | 3,300 | 150 | 100 | 11,800 |
(a)Other headcount includes North Africa, Europe and Asia.
(b)Includes approximately 2,900 employees in the Chemical segment.
| 2 | OXY 2020 FORM 10-K |
| BUSINESS AND PROPERTIES |
Occidental is dedicated to attracting and retaining top talent and Occidental is regularly evaluating and updating its human capital resources to enable its employees to live well and work well. Occidental offers education resources, programs, time away benefits and insurance to support multiple factors of health including physical, financial, social and mental. Occidental’s ultimate goal is to give employees the tools and resources they need to succeed both personally and professionally and foster a safe and collaborative work environment.
Occidental’s employees are key to its ability to safely adapt to an evolving business environment; one of Occidental’s top priorities is safety for all. In industries where Occidental operates one of the key performance indicators of a successful company is a low injury incidence rate. Occidental’s injury rate for 2020 was historically low. Management’s compensation is impacted by the number of health and safety incidents, which was most recently reflected in management’s 2020 annual bonus determination.
Occidental’s employees are evaluated relative to Occidental’s core values. These core values are as follows:
■Lead with Passion
■Outperform Expectations
■Deliver Results Responsibly
■Unleash Opportunities
■Commit to Good
| AVAILABLE INFORMATION |
Occidental’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports are available free of charge on its website, www.oxy.com, as soon as reasonably practicable after Occidental electronically files the material with, or furnishes it to, the Securities and Exchange Commission (SEC). In addition, copies of Occidental’s annual report will be made available, free of charge, upon written request.
Information contained on Occidental’s website is not part of this report or any other filings with the SEC.
| OXY 2020 FORM 10-K | 3 |
| BUSINESS AND PROPERTIES |
| OIL AND GAS OPERATIONS |
GENERAL
Occidental’s oil and gas assets are characterized by an advantaged mix of short-cycle and long-cycle high-return development opportunities. Occidental conducts its ongoing exploration and production activities in the United States, the Middle East and Africa. Within the United States, Occidental has operations in Texas, New Mexico and Colorado, as well as offshore operations in the Gulf of Mexico. Internationally, Occidental conducts operations primarily in Oman, United Arab Emirates (UAE) and Algeria. Operations in Ghana are classified as held for sale as of December 31, 2020. Refer to the Oil and Gas Acreage section in Supplemental Oil and Gas Information under Item 8 of this Form 10-K for further disclosure of Occidental’s holdings of developed and undeveloped oil and gas acreage.
COMPETITION
As a producer of oil, condensate, NGL and natural gas, Occidental competes with numerous other domestic and international public, private and government producers. Oil (which includes condensate), NGL and natural gas are sensitive to prevailing global and local, current and anticipated market conditions. Occidental’s competitive strategy relies on maintaining production in a capital efficient manner through developing conventional and unconventional fields and utilizing primary and EOR techniques in areas where Occidental has a competitive advantage as a result of its successful operations or investments in shared infrastructure. Occidental also competes to develop and produce its worldwide oil and gas reserves safely and cost-effectively, maintain a skilled workforce and obtain quality services.
PROVED RESERVES AND SALES VOLUMES
The table below shows Occidental’s year-end oil, NGL and natural gas proved reserves. See the information under Oil and Gas Segment in the Management's Discussion and Analysis section under Part II, Item 7, of this report for details regarding Occidental’s proved reserves, the reserves estimation process, sales and production volumes, production costs and other reserves-related data.
COMPARATIVE OIL AND GAS PROVED RESERVES AND SALES VOLUMES
Oil and NGL are in millions of barrels; natural gas is in billions of cubic feet (Bcf); barrels of oil equivalent (Boe) are in millions.
| 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||
| Oil | NGL | Gas | Boe | (a) | Oil | NGL | Gas | Boe | (a) | Oil | NGL | Gas | Boe | (a) | |||||||||||||||||||||||||||||||||
| Proved Reserves (b) | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | 1,144 | 384 | 2,446 | 1,936 | 1,570 | 540 | 4,128 | 2,798 | 1,186 | 284 | 1,445 | 1,711 | |||||||||||||||||||||||||||||||||||
| International (c,d) | 331 | 215 | 2,573 | 975 | 469 | 208 | 2,572 | 1,106 | 397 | 202 | 2,650 | 1,041 | |||||||||||||||||||||||||||||||||||
| Total | 1,475 | 599 | 5,019 | 2,911 | 2,039 | 748 | 6,700 | 3,904 | 1,583 | 486 | 4,095 | 2,752 | |||||||||||||||||||||||||||||||||||
| Sales Volumes | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | 205 | 81 | 561 | 380 | 155 | 52 | 326 | 261 | 91 | 25 | 119 | 136 | |||||||||||||||||||||||||||||||||||
| International (c,d) | 59 | 13 | 195 | 104 | 64 | 13 | 204 | 111 | 62 | 11 | 189 | 104 | |||||||||||||||||||||||||||||||||||
| Total | 264 | 94 | 756 | 484 | 219 | 65 | 530 | 372 | 153 | 36 | 308 | 240 |
(a)Natural gas volumes are converted to Boe at six thousand cubic feet (Mcf) of gas per one barrel of oil. Conversion to Boe does not necessarily result in price equivalency.
(b)The detailed proved reserves information presented in accordance with Item 1202(a)(2) to Regulation S-K under the Securities Exchange Act of 1934 (Exchange Act) is provided in the Supplemental Oil and Gas Information section in Item 8 of this Form 10-K. Proved reserves are stated on a net basis after applicable royalties.
(c)International proved reserves and sales volumes in 2019 have been reclassified to include Occidental’s operations in Algeria.
(d)Excludes reserves and sales volumes related to Occidental’s discontinued operations in 2020 and 2019, respectively.
| 4 | OXY 2020 FORM 10-K |
| BUSINESS AND PROPERTIES |
| CHEMICAL OPERATIONS |
GENERAL
OxyChem owns and operates manufacturing plants at 22 domestic sites in Alabama, Georgia, Illinois, Kansas, Louisiana, Michigan, New Jersey, New York, Ohio, Tennessee and Texas and at two international sites in Canada and Chile.
COMPETITION
OxyChem competes with numerous other domestic and international chemical producers. OxyChem’s market position was first or second in the United States in 2020 for the principal basic chemical products it manufactures and markets as well as for vinyl chloride monomer (VCM). OxyChem ranks in the top three producers of polyvinyl chloride (PVC) in the United States. OxyChem’s competitive strategy is to be a low-cost producer of its products in order to compete on price.
OxyChem produces the following products:
| Principal Products | Major Uses | Annual Capacity | ||||||
| Basic Chemicals | ||||||||
| Chlorine | Raw material for ethylene dichloride (EDC), water treatment and pharmaceuticals | 3.4 million tons | ||||||
| Caustic soda | Pulp, paper and aluminum production | 3.5 million tons | ||||||
| Chlorinated organics | Refrigerants (a), silicones and pharmaceuticals | 1.0 billion pounds | ||||||
| Potassium chemicals | Fertilizers, batteries, soaps, detergents and specialty glass | 0.4 million tons | ||||||
| EDC | Raw material for VCM | 2.1 billion pounds | ||||||
| Chlorinated isocyanurates | Swimming pool sanitation and disinfecting products | 131 million pounds | ||||||
| Sodium silicates | Catalysts, soaps, detergents and paint pigments | 0.6 million tons | ||||||
| Calcium chloride | Ice melting, dust control, road stabilization and oil field services | 0.7 million tons | ||||||
| Vinyls | ||||||||
| VCM | Precursor for PVC | 6.2 billion pounds | ||||||
| PVC | Piping, building materials and automotive and medical products | 3.7 billion pounds | ||||||
| Ethylene | Raw material for VCM | 1.2 billion pounds (b) |
(a)Includes 4CPe, a raw material used in making next generation, climate friendly refrigerants with low global warming and zero ozone depletion potential.
(b)Amount is gross production capacity for 50/50 joint venture with Orbia (formerly Mexichem).
| OXY 2020 FORM 10-K | 5 |
| BUSINESS AND PROPERTIES |
| MIDSTREAM AND MARKETING OPERATIONS |
GENERAL
Occidental’s midstream and marketing operations primarily support and enhance its oil and gas and chemical businesses. The midstream and marketing segment strives to maximize realized value by optimizing the use of its gathering, processing, transportation, storage and terminal commitments and by providing access to domestic and international markets. To generate returns, the segment evaluates opportunities across the value chain and uses its assets to provide services to Occidental subsidiaries, as well as third parties. The midstream and marketing segment operates or contracts for services on gathering systems, gas plants, co-generation facilities and storage facilities and invests in entities that conduct similar activities. The midstream and marketing segment has equity investments in WES and Dolphin Energy Limited. WES owns gathering systems, plants and pipelines and earns revenue from fee-based and service-based contracts with Occidental and third parties. Dolphin Energy Limited owns and operates a pipeline which connects its gas processing and compression plant in Qatar and its receiving facilities in UAE and uses its network of Dolphin Energy Limited-owned and other existing leased pipelines to supply natural gas across the UAE and to Oman. Also included in the midstream and marketing segment is OLCV.
COMPETITION
Occidental’s midstream and marketing businesses operate in competitive and highly regulated markets. Occidental competes for capacity and infrastructure for the gathering, processing, transportation, storage and delivery of its products, which are sold at current market prices or on a forward basis to refiners, end users and other market participants. Occidental’s marketing business competes with other market participants on exchange platforms and through other bilateral transactions with direct counterparties.
Occidental’s midstream and marketing operations are conducted in the locations described below as of December 31, 2020:
| Location | Description | Capacity (a) | ||||||
| Gas Plants | ||||||||
| Texas, New Mexico and Colorado | Occidental and third-party-operated natural gas gathering, compression and processing systems and CO2 processing and capturing | 2.7 Bcf/d | ||||||
| Rocky Mountains, Pennsylvania and Texas | Equity investment in WES - gas processing facilities | 5.6 Bcf/d | ||||||
| UAE | Natural gas processing facilities for Al Hosn | 1.3 Bcf/d | ||||||
| Pipelines and Gathering Systems | ||||||||
| Texas, New Mexico and Colorado | CO2 fields and pipeline systems transporting CO2 to oil and gas producing locations | 2.8 Bcf/d | ||||||
| Qatar, UAE and Oman | Equity investment in the Dolphin Energy Limited natural gas pipeline | 3.2 Bcf/d | ||||||
| United States | Equity investment in WES involved in gathering and transportation | 17,027 miles of pipeline | ||||||
| Power Generation | ||||||||
| Texas and Louisiana | Occidental-operated power and steam generation facilities | 1,218 megawatts of electricity and 1.6 million pounds of steam per hour | ||||||
| OLCV | ||||||||
| Texas | Occidental-owned solar generation facility | 16.8 megawatts of electricity | ||||||
| Texas | Equity investment in a zero-emission natural gas generation demonstration facility | 50 megawatts of electricity | ||||||
| Canada | Equity investment in direct air capture technology, which captures CO2 directly from the atmosphere. The captured CO2 can be permanently sequestered or synthesized into transportation fuels. |
(a)Amounts are gross, including interests held by third parties.
| 6 | OXY 2020 FORM 10-K |
| BUSINESS AND PROPERTIES |
| ENVIRONMENTAL REGULATION |
For environmental regulation information, including associated costs, see the information under Environmental Liabilities and Expenditures in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section under Part II, Item 7, of this Form 10-K and Risk Factors under Part I, Item 1A.