Occidental plans to sell OxyChem for $10 billion to reduce debt amid declining oil prices and petrochemical margin pressures.
Occidental Petroleum is reportedly in discussions to sell its OxyChem division in a transaction expected to be valued at around $10 billion, according to a report by the Financial Times. If completed, this sale would represent one of the largest carve-outs of a standalone Petrochemicals business globally. Headquartered in Houston, Occidental — backed by billionaire investor Warren Buffett — has been pursuing a strategy of divesting non-core assets over recent years to alleviate its substantial debt, which currently totals approximately $24 billion. The company is working closely with advisers to navigate the sale process.
Sources familiar with the matter indicated that, barring any last-minute complications, Occidental could officially announce the divestment in the coming weeks. The proposed deal would mark the largest asset sale in Occidental’s corporate history. In the twelve months ending June, OxyChem generated nearly $5 billion in revenue, highlighting its significance within Occidental’s broader portfolio. As of the most recent close, Occidental’s market capitalization stood at nearly $47 billion.
The potential buyer of the OxyChem unit has not yet been identified, and there remains a possibility that the transaction could be delayed or canceled, according to insider warnings. The divestment is seen as a key step for Occidental to manage the financial strain stemming from prior acquisitions, including the $55 billion purchase of Anadarko Petroleum in 2019 and the $13 billion acquisition of shale oil producer CrownRock in 2023.
Despite these challenges, the company has made progress in reducing its debt load, cutting $7.5 billion over the last year. This includes $4 billion from divestments since the start of 2024. In August, Occidental announced the sale of four development assets in the Permian Basin, the United States’ largest oil-producing region, to undisclosed buyers. Additionally, it completed the sale of Gas Pipeline and related infrastructure to Enterprise Products Partners, a Houston-based energy firm.
Chief Executive Vicki Hollub expressed satisfaction with the company’s progress, stating on a recent earnings call: “We are extremely pleased with the progress of our divestiture programme and the trajectory of our debt reduction plans.”
The broader US Shale Oil Industry is also tightening expenditure following a 15 percent drop in Oil Prices this year. Earlier this month, ConocoPhillips announced plans to cut up to 25 percent of its workforce, while Chevron announced job reductions of up to 20 percent in February. Petrochemical producers have faced margin pressures in recent years due to oversupply, with new production capacity emerging in the US and Middle East, alongside China’s expansion of domestic production.
