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Occidental Petroleum is in talks to sell its OxyChem division in a deal expected to be worth at least $10bn that would carve out one of the world’s largest standalone petrochemicals units.
The Houston-based company, which is backed by Warren Buffett, has been steadily divesting assets in recent years in an effort to reduce its heavy debt load, which now stands at $24bn. Occidental is working with advisers on the sale process.
The divestment, which would be Occidental’s biggest to date, was likely to be announced in the coming weeks, two people familiar with the matter said, provided it does not hit any last-minute hurdles.
Occidental’s OxyChem division generated almost $5bn in revenues in the 12 months to the end of June.
The identity of the buyer could not immediately be established. It was possible that the sale could still fall apart, the people warned. Occidental did not immediately respond to requests for comment.
Occidental is grappling with a large debt burden, a legacy of its $55bn acquisition of Anadarko Petroleum Corporation in 2019 and its $13bn acquisition of shale oil producer CrownRock in 2023.
The company has reduced its debt by $7.5bn in the past year, helped by $4bn of divestments since the start of 2024.
“We are extremely pleased with the progress of our divestiture programme and the trajectory of our debt reduction plans,” chief executive Vicki Hollub said on an earnings call last month.
Occidental’s shares have performed poorly over the past 12 months — falling almost 8 per cent to $47.47 — as a result of falling oil prices and concerns about the company’s debt burden. Over the same period the S&P 500 has increased in value by more than 15 per cent.
Petrochemical producers’ margins have been squeezed by a supply glut in recent years, with new capacity coming on stream in the US and Middle East, and China building up its own domestic supply.
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