Occidental Petroleum plans to sell stake in Middle East, North Africa
Oil giant Occidental Petroleum Corp. said Friday it plans to sell off its minority stake in the Middle East and North Africa region along with other assets in an effort to boost shareholder value.
The Los Angeles company, which is one of the largest oil producers in the country, said those decisions come as part of a push to streamline operations and improve profitability.
“Our goal is to become a somewhat smaller company with more manageable exposure to political risk,” Stephen I. Chazen, Occidental’s chief executive, said in a statement. “We will continue to consider additional strategic alternatives for the company to maximize total returns to our shareholders.”
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Other plans include the sale of a portion of Occidental’s 35% stake in the Plains All-American Pipeline LP for $1.3 billion before taxes. The company estimates its remaining share of the pipeline at about $3.4 billion. The company will also pursue “strategic alternatives” for other assets, including its oil and gas interests in the Williston Basin, Hugoton Field and the Piceance Basin.
Earlier this year, Occidental went through a period of boardroom turmoil that ultimately resulted in shareholders ousting its longtime chairman, Ray Irani.
With its value dropping in 2011 and 2012, the oil and gas producer is looking for ways to improve investor return, analysts said. Rivals such as Hess Corp. have also had to consider restructuring or selling off assets in order to turn around performance.
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