What were the key drivers of Occidental's financial performance in 2002?

Occidental's 2002 performance was primarily driven by its oil and gas segment, which benefited from higher crude oil prices and increased production volumes, partially offsetting the impact of lower natural gas prices. The chemical segment faced challenges due to poor economic conditions, though certain chemical prices improved.

How did Occidental's strategic actions in 2002 impact its business segments?

In the oil and gas segment, the company continued to focus on growing reserves through exploration and development and enhancing recovery from existing fields. In the chemical segment, the divestiture of its Equistar interest and investment in Lyondell aimed to diversify its petrochemical portfolio and mitigate market volatility.

What is Occidental's outlook for 2003?

Occidental anticipates continued volatility in oil and gas prices due to geopolitical factors. For the chemical segment, it expects gradual improvement with increasing demand for chlorine and caustic soda, and continued growth in PVC demand. The company plans capital expenditures of approximately $1.3 billion in 2003, predominantly in oil and gas.

How has Occidental managed its debt levels?

Occidental has actively managed its debt, leading to a reduction in its total debt-to-capitalization ratio from 66% at the end of 1998 to approximately 43% by the end of 2002. This was achieved through various actions including debt reduction using cash flow from asset sales and operations.

OXY/OXY-WT 10-K FY2002 Annual Report — Revenue, Net Income, EPS

Summary

Occidental Petroleum Corporation's (OXY) 2002 10-K filing shows a company navigating a dynamic energy and chemical market. The oil and gas segment, bolstered by significant acquisitions in previous years (Elk Hills, Altura, THUMS), remains the primary revenue and earnings driver. Despite lower natural gas prices impacting overall segment earnings, higher oil prices and production volumes provided a partial offset. Strategic focus remains on cost-effective production from long-lived assets and disciplined capital allocation. The chemical segment experienced a challenging year due to poor economic conditions, though commodity chemical prices saw some improvement. Key developments included the sale of its interest in Equistar Chemicals and the acquisition of a stake in Lyondell Chemical Company, aimed at diversifying petrochemical interests and reducing volatility. Occidental continues to harvest cash from its chemical business to support its core oil and gas strategy. Financially, Occidental demonstrated progress in strengthening its balance sheet, with its total debt-to-capitalization ratio declining to approximately 43% by year-end 2002 from 66% in 1998. Capital expenditures remained robust, with a significant portion allocated to oil and gas development, particularly in Qatar, Elk Hills, and the Permian Basin.

Key Highlights

1Occidental's oil and gas segment is the dominant contributor to revenue and earnings, driven by large, legacy assets like Elk Hills and Permian Basin properties, despite fluctuating commodity prices.

2The company made significant strategic moves in its chemical segment, selling its Equistar Chemicals stake and acquiring an interest in Lyondell Chemical Company to diversify and reduce petrochemical exposure.

3Occidental successfully reduced its overall debt-to-capitalization ratio to approximately 43% by the end of 2002, reflecting a stronger balance sheet.

4Capital expenditures were focused on oil and gas growth areas, with significant investments in Qatar (Dolphin Project), Elk Hills, and the Permian Basin.

5The company's 2002 net sales were $7.3 billion, with net income of $989 million ($2.63 per share), compared to $1.2 billion ($3.10 per share) in 2001.

6Occidental continued to pay a consistent dividend of $1.00 per share throughout 2000-2002.

OCCIDENTAL PETROLEUM CORP /DE/ Annual Report, Year Ended Dec 31, 2002

Summary

Key Highlights

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