Occidental Petroleum

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Occidental Petroleum Corporation

Type	Public (NYSE: OXY)
Founded	1920
Headquarters	Los Angeles, California
Key people	Ray R. Irani, Chairman, President and CEO
Industry	Oil and gas
Products	Oil, Natural gas, Petrochemicals
Revenue	US$20.21 billion (2008)
Net income	US$5.40 billion (2008)
Employees	8,886
Website	www.oxy.com

Occidental Petroleum Corporation (Oxy) is an international oil and gas exploration and production company with operations in the United States, the Middle East, North Africa, and South America. The company nickname “Oxy” began in 1964 in reference to Occidental’s NYSE stock ticker. Headquartered in Los Angeles, California, Oxy is the fourth largest U.S. oil and gas company, based on equity market capitalization. Oxy is the largest oil producer in Texas and the largest natural gas producer in California, with additional operations in Kansas, Oklahoma, Colorado and New Mexico.

Oxy's wholly-owned subsidiary, OxyChem, manufactures and markets chlor-alkali products and vinyls.

Contents 1 History 2 Operations 2.1 Oil and gas 2.2 Chemical 3 Controversies 3.1 Love Canal 3.2 Piper Alpha 3.3 Caño Limón 3.4 Recent controversies 3.5 Outstanding lawsuits 3.6 Greenmail 3.7 Gore family 4 Environmental record 5 Businesses 6 References 7 External links

[edit] History

Occidental was founded in 1920. In 1957, Dr. Armand Hammer was elected president and CEO. In 1961, the company discovered the second largest natural gas field in California in the Arbuckle area of the Sacramento basin at Lathrop. Over the next 10 years, Occidental expanded internationally with operations in Libya, Peru, Venezuela, Bolivia, Trinidad, and the United Kingdom. Occidental won exploration rights in Libya in 1965 and operated there until all activities were suspended in 1986 after the United States imposed economic sanctions on Libya.

Occidental entered the chemical business with the acquisition of Hooker Chemicals in 1968, 26 years after the contamination at Love Canal. On July 6, 1988, a fire at Piper Alpha, an oil platform in the North Sea, caused the biggest accident in the history of the offshore oil industry. Today, Dallas-based Occidental Chemical is a leading chemical manufacturer with interests in basic chemicals, vinyls and performance chemical products. In 1994, Dr. Ray Irani became President and CEO.

In 2005, Occidental was among 53 entities which contributed the maximum of $250,000 to the second inauguration of President George W. Bush.^[1][2][3] In 2008, Oxy contributed $301,579 to Democratic candidates and $204,587 to Republican candidates.^[4]

[edit] Operations

[edit] Oil and gas

Occidental’s growth strategy in oil and gas relies on three components: enhanced oil recovery (EOR), exploration and acquisitions.

Oil and gas operations are focused in three core areas, the United States, the Middle East/North Africa, and South America.

In South America, Occidental operates in Argentina, and Colombia. In the Middle East, Occidental has operations in Oman, Qatar, United Arab Emirates, and Yemen. The company has its only operation in North Africa in Libya. Occidental is the fourth largest oil and gas company in the United States, which accounts for 70 percent of its oil and gas reserves and 60 percent of the current production.^[5] Occidental is the largest producer of natural gas in California, and the largest oil producer in Texas.^[6][7] Occidental also has operations in Kansas and Oklahoma.

Occidental formerly operated in Ecuador, but the government ended the company's interests in block 15 in the Ecuadorian Amazon in 2006.^[8]

[edit] Chemical

Indspec Chemical Corporation is one of Occidental's wholly owned subsidiaries. On October 11, 2008, an accidental spill of oleum, a chemical similar to sulfuric acid, occurred at Indspec's facility in Petrolia. The accident caused contamination of the ventilation system and a cloud of toxic gas in the Petrolia sky. 2,500 residents of the area were asked to evacuate.

The news was largely ignored in mainstream media and was overshadowed by the presidential directive which brought back soldiers from Iraq. Initially, there had been 4,000 who were scheduled to return, but the number subsequently increased to 4,700, who would serve active-duty members in the United States. According to the Army Times, these troops would serve to control crowd rioting or massive poisoning attack.[1]

While there were no reports of serious human injury, the spokeswoman at the Department of Environmental Freda Tarbell said that there were reportedly found hundreds of dead fish in Bear Creek following the spill.[2]

Please help improve this article by expanding it. Further information might be found on the talk page. (December 2008)

[edit] Controversies

[edit] Love Canal

In 1942, Hooker Chemical and Plastics began disposing chemical waste in the Love Canal region. Other companies as well as the military had used it as a chemical disposal site since the 1920s. In 1947, Hooker Chemicals became the owner and the sole user of the land. In 1952, the site was filled to capacity and closed off. Later in the 1950s, the local school board requested Hooker, after threatening to resort to eminent domain, to sell the land. The school board intended to build a school on an unused area of the dump. Hooker Chemical sold the land to the school board at $1, with the warning that the site contained waste products from the manufacturing of chemicals, and disclaimed all subsequent liability.

A school was built on the site, and later a middle-class residential district was built upon the land adjacent to the site. The construction broke through the 4-foot (1.2 m) clay seal containing the waste. In 1968, Hooker Chemical was purchased by Occidental Petroleum. In 1978, residents became concerned about unusual health issues in the Love Canal region, including high rates of cancer and birth defects. They subsequently became a national news, and in 1980, president Jimmy Carter declared a federal emergency in the area. Residents were eventually relocated, and Occidental paid $129 million in restitution.^[9]

[edit] Piper Alpha

On July 6, 1988 Occidental's Alpha offshore production platform in the Piper oilfield in the North Sea suffered an explosion and consequent fire when a gas condensate pump was started with the pressure safety valve removed. 167 workers died in the world's worst offshore oil disaster.

[edit] Caño Limón

On December 13, 1998, seventeen civilians, including 7 children, were killed when the Colombian Air Force dropped a cluster bomb in the hamlet of Santo Domingo, Colombia, after AirScan, Occidental's security contractor, from a private aircraft, incorrectly identified it as a hostile guerrilla target. Groups such as FARC and the National Liberation Army were active in the area. Three employees of AirScan were flying the Skymaster plane from which they provided the Colombian military with the coordinates to drop the bombs. The operation had been planned by the CAF and AirScan at the Occidental's complex in Caño Limón. ^[10] A lawsuit was attempted in April 2003 against Occidental by Luis Alberto Galvis Mujica, a witness and survivor of the accident.^[11]

[edit] Recent controversies

Occidental met with substantial resistance from 1992 to 2001 when it tried to drill for oil in the territory of the U'wa people in northeast Colombia. The locals were concerned about environmental damage and feared that development would bring strangers and invite violence to the region. There also were tribal beliefs that oil is the "blood of the earth" and should not be removed. They believed that oil infrastructure would be a target for violent leftist guerillas in the country. After years of shareholder resolutions, legal battles, protests, and a failed test well, the company abandoned the project. Repsol YPF took over the project and continues to work on it.

In 1998, the US government sold the Elk Hills naval petroleum reserve to Occidental for $3.65 billion. According to the government, the reserve was no longer strategically necessary, and the reserve was sold to reduce the national debt and the size of the government. Critics cited the "no-bid" nature of the sale, together with Vice President Al Gore's involvement with the company as evidence of graft.^[12]

In 2005, Occidental and partner Liwa won eight out of 15 exploration spots on the EPSA-4 auction, making both companies among the first to enter the Libyan market since the United States lifted its embargo on that country.

In August 2005, the company was accused of 42 legal violations in Ecuador, including environmental destruction and espionage. The Ecuadorian government subsequently refused to renew a contract for oil field exploration. Protesters in the northeastern part of the country called for the withdrawal of Occidental.^{[citation needed]}

[edit] Outstanding lawsuits

On May 10, 2007, a group of 25 indigenous Achuar Peruvians filed suit against Occidental, demanding clean-up and reparations for environmental damages allegedly caused by Occidental over 30 years. The plaintiffs claimed that the company violated the industry standards and the environmental regulations by dumping a total of 9 billion barrels of toxic oil by-products in watersheds used by the Achuar people to fish, drink, and bath. The Achuar were represented by Los Angeles-based EarthRights International and the law firm Schonbrun DeSimone Seplow Harris & Hoffman LLP.^[13]

[edit] Greenmail

In 1984, David Murdoch owned about 5% of the company's shares. When Murdoch called on the management to take measures to increase the share price, it chose to pay greenmail to buy back shares from him at $40.10, while the market price was $28.75.

[edit] Gore family

Occidental's coal interests were represented for many years by attorney and former U.S. Senator Albert Gore, Sr., among others. Gore, who had a long-time close friendship with Hammer, became the head of the subsidiary Island Creek Coal Company, upon his election loss in the Senate. Much of Occidental's coal and phosphate production was in Tennessee, the state Gore represented in the Senate, and Gore owned shares in the company. Former Vice President Albert Gore, Jr. received much criticism from environmentalists, when the shares passed to the estate after the decease of Albert Gore Sr., and Albert Gore Jr. was a son and the executor of the estate.^[12][14] Albert Gore Jr., however, did not exercise control over the shares, which were eventually sold when the estate closed.^[15][16]

[edit] Environmental record

Researchers at the University of Massachusetts Amherst identified Occidental Petroleum as the 47th-largest corporate producer of air pollution in the United States, with about 1.2 million pounds of toxic chemicals released annually into the air.^[17] Pollutants emitted by the company included chlorine, antimony compounds, benzotrichloride, and hydrochloric acid. ^[18] According to the Environmental Protection Agency, Occidental might be potentially liable for at least six Superfund toxic waste sites.^[19]

[edit] Businesses

• Occidental Oil & Gas Corporation
• Occidental Chemical Corporation (Oxychem)

[edit] References

[edit] External links

• Occidental Petroleum Corporation
• Occidental Chemical Corporation