Occidental Petroleum to Spin Off California Business
In an effort to better focus its oil and natural gas operations, Occidental Petroleum announced today it will split its California operations off, forming two publicly traded entities. Occidental said the separation of its California business is expected to be complete by the end of this year or early 2015.
Upon completion of the split, Occidental intends to base its operations in Houston, while the California business will be headquartered in that state. According to Occidental, once the separation is finalized, it will become California's largest oil and natural gas provider with approximately 2.3 million net acres of land, and major operations in key areas including Los Angeles, Ventura, Sacramento, and San Joaquin.
In 2013, according to Occidental, its California operations generated $4.3 billion of its $24.46 billion in total net sales. The new company based in California will have an estimated 8,000 employees and contractors. Occidental currently has more than 40,000 employees worldwide.
The management team of the new California entity has not been determined. However, current Occidental CEO Stephen Chazen has agreed to remain in his post until the 2016 shareholder meeting to help with the transition. Chairman of the Board Edward Djerejian has also agreed to stay on for one more year.
Chazen's agreement to stay at the helm until 2016 comes a year after the Occidental board of directors sought to replace him in what some speculated was part of a power play by then-Chairman Ray Irani, before shareholder complaints caused the board to rethink their decision. Ultimately, Occidental announced in April of last year that Chazen would remain CEO through 2014. And Irani stepped down from the board.
The separation of Occidental into two public companies is contingent upon customary regulatory provisions and final approval from the board of directors.
Separately, the company said Friday that Elisse Walter, a former chairman of the U.S. Securities and Exchange Commission, has been elected to its board of directors.
-- Material from The Associated Press was used in this report.
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