Occidental Petroleum is reportedly in talks to divest its petrochemicals division, OxyChem, in a deal that could be worth up to $10 billion and would create one of the largest independent petrochemicals companies in the world.
The Financial Times wrote, citing unnamed sources in the know, that the deal could be wrapped up within a few weeks unless it hits a snag at the last moment, with the sources saying the talks could still fall through. “The identity of the buyer could not immediately be established,” the FT also noted.
Oxy has been divesting various assets for years, after it got deeply into debt to acquire Anadarko. The price tag of that deal was $55 billion. Occidental’s debt burden to date is about $24 billion, down from $48.75 billion in September 2019, right after the Anadarko acquisition. Debt then jumped again in 2023, when Oxy acquired CrownRock for $12 billion.
Occidental was earlier this year named among the top 10 shale operators, with 1.22 million barrels of oil equivalent in daily production. This placed it third after Exxon and sector independent Expand Energy.
For this year, Occidental plans average daily production of 1.422 million barrels, per its second-quarter report, which reflected lower earnings resulting from lower international oil prices. The effect of international prices continues to plague the company, affecting its stock price, albeit relatively moderately: per the FT, the stock has shed 8% over the past 12 months. In the year-to-date, the shares have shed 4.5%.
The petrochemicals business made close to $5 billion in revenue for the 12 months to June, the Financial Times noted in its report. The petrochemicals industry as a whole is becoming the center of activity for the oil industry, as most forecasters see this industry driving overall oil demand growth in the future.
By Irina Slav for Oilprice.com
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