occidental petroleum 2006 Annual Report


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occidental petroleum 2006 Annual Report

  1. 1. Occidental Petroleum Corporation 2006 Annual Report
  2. 2. Selected Financial Data Dollar amounts in millions, except per-share amounts 2006 2005 2004 2003 2002 For the years ended December 31, Results of Operations (a) Net sales $ 17,661 $ 14,597 $ 10,879 $ 9,020 $ 7,149 Income from continuing operations 4,435 5,040 2,406 1,559 1,167 Net income 4,182 5,281 2,568 1,527 989 Basic earnings per common share from continuing operations 5.20 6.25 3.04 2.03 1.55 Basic earnings per common share 4.90 6.55 3.24 1.99 1.31 Diluted earnings per common share 4.86 6.45 3.20 1.97 1.30 Core earnings (b) 4,349 3,732 2,299 1,599 1,003 Financial Position (a) Total assets 32,355 26,108 21,391 18,168 16,548 Long-term debt, net and trust preferred securities (c) 2,619 2,873 3,345 4,446 4,452 Stockholders’ equity 19,184 15,032 10,550 7,929 6,318 Market Capitalization 42,515 32,129 23,153 16,349 10,750 Cash Flow Cash provided by operating activities 6,353 5,337 3,878 3,074 2,100 Capital expenditures (3,005) (2,324) (1,720) (1,523) (1,145) Cash used by all other investing activities, net (1,378) (837) (708) (608) (551) Dividends Per Common Share $ 0.80 $ 0.645 $ 0.55 $ 0.52 $ 0.50 Basic Shares Outstanding (thousands) 852,550 806,600 791,159 767,887 752,380 (a) See the Management’s Discussion and Analysis of Financial Condition and Results of Operations (MDA) section of this report and the “Notes to Consolidated Financial Statements” for information regarding accounting changes, asset acquisitions and dispositions, discontinued operations, environmental remediation, other costs and other items affecting comparability. (b) For an explanation of core earnings and reconciliation to net income, see “Significant Items Affecting Earnings” in the MDA section of this report. (c) On January 20, 2004, Occidental redeemed the trust preferred securities. Portions of this report contain forward-looking statements and involve risks and uncertainties that could materially affect expected results of operations, liquidity, cash flows and business prospects. Words such as “estimate,” “project,” “predict,” “believe,” “will,” “anticipate,” “plan,” “intend” and “expect” or similar expressions that convey the uncertainty of future events or outcomes generally identify forward- looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, Occidental expressly disclaims any obligation to publicly update or revise any forward-looking statements, as a result of new information, future events or otherwise. The United States Securities and Exchange Commission (SEC) permits oil and natural gas companies, in their filings with the SEC, to disclose only proved reserves demonstrated by actual production or conclusive formation tests to be economically producible under existing economic and operating conditions. We use certain terms in this report, such as estimated proved reserves, probable, possible and recoverable reserves and oil in place, that the SEC’s guidelines strictly prohibit us from using in filings with the SEC. Additionally, the SEC requires oil and natural gas companies, in their filings, to disclose non-financial statistical information about their consolidated entities separately from such information about their equity holdings and not to show combined totals. Certain information in this report is shown on a combined basis; however, the information is disclosed separately in the “Notes to the Consolidated Financial Statements” included in the 2006 Annual Report on Form 10-K included in this report. ON THE COvER: The illustration is a depiction of a multilateral horizontal well. Horizontal wells enable Oxy to produce concurrently from multiple intervals off a single well bore.
  3. 3. Oxy in Brief Occidental Petroleum Corporation (NYSE: OXY) is a world leader in oil and natural gas exploration and production, and a major North American chemical manufacturer. With oil and natural gas operations in the United operations include producing assets in Argentina, States, the Middle East/ North Africa region and Bolivia and Colombia. The company also has Latin America, Occidental is helping to meet producing assets in Pakistan. the world’s energy needs. In the United States, Occidental Chemical Corporation (OxyChem) Occidental is the largest oil producer in Texas and manufactures vinyls and performance chemicals the largest natural gas producer in California, with in addition to chlorine and caustic soda — the additional operations in Kansas, Oklahoma and building blocks for such indispensable products as New Mexico. Occidental also has an interest in a pharmaceuticals, water disinfectants, detergents single non-operated property in the Gulf of Mexico. and others. In the Middle East/North Africa, Occidental has Worldwide, Occidental is committed to safeguarding assets in Libya, Oman, Qatar, Yemen and is a the environment, protecting the safety and health of partner in the transborder Dolphin Project that will employees and neighboring communities and upholding supply natural gas from Qatar to markets in the the highest standards of social responsibility. United Arab Emirates and Oman. Our Latin American 3 1 9 2 4 13 12 14 5 1. Elk Hills 10 11 2. Long Beach 3. Hugoton 4. Permian Basin 6 5. Horn Mountain 6. Colombia 7. Bolivia 8. Argentina 7 9. Libya 10. Yemen 8 11. Oman 12. United Arab Emirates 13. Qatar 14. Pakistan
  4. 4. 2006 nnual Report to Stockholders In my reports to you during the past five years, I have emphasized the strategic steps we have taken to strengthen our financial and operational performance. The execution of our strategy to balance near-term profitability with long-term growth has positioned the company to capitalize on strong energy prices to generate a growing stream of income and cash flow, and secure new investment Dr. Ray R. Irani opportunities. As a result, our performance Chairman, President and Chief Executive Officer in 2006 again ranked among the strongest in the oil and gas industry as demonstrated by a series of key metrics that we believe best measure comparative financial performance. Return on Capital Net Income Return on Employed* Equity $ in Billions Stated as Percent Stated as Percent 33 5.3 41 29.714302 4.2 35.142886 21 28 26.428585 29.285738 20 24 23.142868 23.428591 2.6 15 21 19.857151 17.571443 1.5 11.714295 16.571434 13.285717 5.857148 10.000000 0.000000 2005 2004 2006 2003 2005 2004 2005 2006 2003 2004 2006 2003 * ROCE is earnings before interest expense and tax effect of interest expense over stockholders’ equity plus average total debt. 2
  5. 5. We also received $250 million from the sale of 10 Market PerforMance After adjusting for a two-for-one stock split in August million shares of our investment in Lyondell Chemical 2006, Occidental’s year-end closing stock price of Company. We used $3 billion of our cash flow to $48.83 per share was the highest year-end stock fund our 2006 capital program, used $2.5 billion for price in the company’s history and 22 percent higher acquisitions and $1.5 billion to repurchase 30.6 than the previous year-end record of $ 39.94 set in million shares of Occidental common stock. We 2005. Our 2006 total return to stockholders, based also paid off $895 million of debt, including debt on stock price appreciation plus dividend reinvest- assumed as part of the Vintage acquisition, and we ment, was 24 percent. Over the past five years, paid dividends totaling $645 million. At year-end Occidental’s total return to stockholders of 315 2006, Occidental had approximately $1.6 billion of percent substantially outperformed the total returns cash and short-term investments on hand. of 195 percent recorded by the Standard Poor’s We also increased the annual dividend rate by 24 500 Oil and Gas Exploration Production Index and percent, which was the fifth increase since 2002. 125 percent by the Standard Poor’s 500 Oil and The board of directors will continue to evaluate the Gas Integrated Index. dividend policy in keeping with our commitment to financial PerforMance generate top quartile total returns for our stockholders. Consolidated net income was nearly $4.2 billion During 2006, our return on capital employed was compared to the $5.3 billion we earned in 2005. 21 percent, and the three-year average from 2004 Core income, which excludes special items, rose through 2006 was 25 percent. Our return on equity to an all-time high of $4.3 billion. Cash flow from in 2006 was 24 percent, and the three-year average operations was approximately $6.4 billion. In addition, was 30 percent. During the same three-year period, we received total proceeds of $1 billion from the sale our stockholders’ equity grew by 142 percent — of non-core properties that were part of Vintage from $7.9 billion to $19.2 billion. Petroleum, which we acquired early in the year. Total Debt Stockholders’ Debt-to- Equity Capitalization $ in Billions Ratio $ in Billions Stated as Percent 19.2 4.6 37 3.9 16.457157 3.942860 15.0 27 3.0 3.285717 13.714297 2.9 10.6 2.628574 10.971438 17 7.9 1.971430 8.228578 13 5.485719 1.314287 2.742859 0.657143 0.000000 0.000000 2005 2005 2004 2004 2006 2006 2003 2003 2005 2004 2006 2003
  6. 6. Oil and Gas oPerations PerforMance For the third consecutive year, oil and gas segment income set a new record. Oil and gas earnings of $7.239 billion were 21 percent higher than the $5.968 billion this segment earned in 2005. The improvement was mainly the result of higher Production from California averaged about 129,000 crude oil prices and combined oil and gas volumes. BOE per day, which was 21 percent of the world- Oil and gas income on a barrel of oil equivalent wide total. (BOE) basis—after taxes and before interest The assets we acquired from Vintage Petroleum in expense — was $20.51, which we believe will California, Argentina and Yemen were an excellent place Occidental in the top quartile among large strategic fit with our existing core operations. The capitalization oil and gas industry peers for the September acquisition of oil and gas producing eighth consecutive year. properties from Plains Petroleum further strength- Worldwide oil and natural gas production averaged ened Occidental’s operations in California and the 601,000 BOE per day in 2006, which is 14 percent Permian Basin. These 2006 acquisitions are part of higher than the 2005 average production of 526,000 our business strategy to achieve profitable growth BOE per day. Our oil and gas production for the by focusing on large, long-lived assets in our core fourth quarter 2006 averaged a quarterly record high geographic areas. of 616,000 BOE per day, up 5 percent from the third Middle East/North Africa quarter and 13 percent from the fourth quarter 2005. Occidental’s net 2006 production from our Middle Last year, we continued adding proved oil and gas East/North Africa operations increased by 15 percent, reserves at a pace well ahead of production. In compared in 2005 to an average of 118,000 BOE 2006, we produced approximately 219 million BOE per day, and accounted for 20 percent of our total while adding 511 million BOE of proved reserves worldwide production. from all sources. At year-end 2006, Occidental’s The primary factor accounting for the increase was total proved reserves from all sources rose to 2.9 a full year’s worth of production from our historic billion BOE. The United States accounted for 72 contract areas in the prolific Sirte Basin in Libya, percent of our total proved reserves followed by the compared to four months of production in 2005. Middle East with 18 percent, Latin America with 9 Occidental’s net production from Libya averaged percent and 1 percent for other operations. 23,000 BOE per day in 2006, compared to an average of 8,000 BOE per day in 2005. We continue United States Combined United States oil and natural gas to hold discussions with Libyan officials about the production, which accounted for 61 percent potential to increase production from these and of total worldwide production, increased to an other producing fields through the application of average of 367,000 BOE per day, a 6-percent innovative enhanced recovery techniques. increase compared to 2005. The largest operation Our success in winning nine new exploration blocks is in the Permian Basin of west Texas and south- in the EPSA-IV oil and gas licensing round in Libya eastern New Mexico and accounted for an average in January 2005 has been followed by the most of 199,000 BOE per day, or 33 percent of our extensive seismic data acquisition program in the daily worldwide production.
  7. 7. Oil Natural Gas Oil Natural Gas Proved Reserves Production Million BOE Thousand BOE/Day 2,208 2,365 2,428 2,611 2,899 520 502 522 526 601 453 560 584 585 814 International 176 177 181 181 234 International 1,755 1,805 1,844 2,026 2,085 U.S. 326 345 339 345 367 U.S. 2004 2002 2003 2005 2006 2004 2002 2003 2005 2006 Oxy’s Long Beach, California operations are an The Permian Basin is a showcase for Oxy’s world-class Formerly a U.S. Naval Petroleum reserve, Oxy’s example of the company’s success in increasing Enhanced Oil Recovery (EOR) expertise. Through Elk Hills operation in central California is the reserves and maximizing production from mature emphasis on advanced technology, reservoir manage- seventh largest oil field in the continental United fields. Visitors to this beachside community are ment and a cost-effective capital program, Oxy has States. Elk Hills helps make Oxy the largest often unaware that the harbor’s resort-looking minimized the production decline from this mature field. natural gas producer and the third largest oil islands are oil and gas production facilities. Pictured above is Oxy’s Permian Basin Denver City unit. producer in California. Pictured at left is Oxy’s Permian Basin unit in Hobbs, New Mexico. Oxy’s Permian Basin assets, which span 2 million acres of west Texas and a portion of New Mexico, account for about a third of Oxy’s worldwide net production. In 2006, Oxy acquired Vintage Petroleum with primary assets in California and Argentina. Pictured at right is one of the Argentina properties. Through aggressive drilling, waterflooding and EOR projects, Oxy expects to ramp up production from these newly acquired assets.
  8. 8. Oil and Gas company’s history. Occidental is the operator and and water desalination markets in the United Arab holds a 90-percent exploration working interest in Emirates and Oman. Occidental has a 24.5-percent onshore Blocks 106 and 124 in the Sirte Basin, interest in this mega project. Blocks 131 and 163 in the Murzuk Basin and Block Qatar remains our largest operation in the Middle 59 in the Cyrenaica Basin. Occidental also holds a East/North Africa. Our net production in Qatar of 35-percent exploration working interest in offshore 43,000 barrels per day in 2006 accounted for more Blocks 35, 36, 52 and 53. Occidental’s total than one-third of our total production for the region. exploration and production acreage in Libya encompasses an area of approximately 130,000 Latin America square kilometers, making Occidental the largest Our production in Latin America averaged approxi- net holder of oil and gas acreage in the country. mately 76,000 BOE per day, which made up 13 percent of our total worldwide production. Occidental and its partners have thus far accumulated seismic data covering 20,000 kilometers. Plans are The acquisition of Vintage Petroleum’s operations in place to gather data spanning an additional 6,000 in Argentina contributed significantly to Occidental’s kilometers. Our ongoing analysis of the seismic data 2006 Latin American production. Occidental’s share has already led to the identification of a number of of production from the Argentina operations attractive prospects and we have just begun an averaged approximately 39,000 BOE per day, on extensive drilling program. an annualized basis, for the 11 months the company held the properties. The integration of the former Since July 2005, when the Sultanate of Oman Vintage assets into our operations has largely been awarded Occidental a 45-percent working interest completed. We are excited by the large number of in a contract to operate one of the largest oil fields opportunities to increase production in Argentina, in Oman, work in the Mukhaizna field has been and we are moving forward with plans for the moving forward according to plan. Occidental and accelerated development of these assets. its partners plan to implement a large-scale steam flood to increase production to approximately In Colombia, we completed our evaluation of 150,000 barrels per day within the next few years a multiphase enhanced recovery project in the and to recover approximately 1 billion barrels of oil La Cira Infantas field and we are moving forward over the life of the project. During 2006, Occidental with plans for the full development of the field in drilled a total of 40 wells in the Mukhaizna field, and cooperation with Ecopetrol, Colombia’s state oil is on track to reach its objectives. company. At full development, this project has the potential to recover approximately 80 million net The Dolphin Project, the premier transborder natural barrels of reserves for Occidental, with net production gas project in the Middle East, made significant increasing to 20,000 BOE per day in 2010. progress in 2006. Construction was completed on all the project’s upstream and downstream compo- Occidental’s production in Latin America was nents by year-end except the giant gas processing adversely impacted by the seizure of the company’s plant located at Ras Laffan in Qatar. The project operations in Ecuador. Occidental has filed a claim involves the initial development of approximately two against Ecuador with an agency of the World Bank billion cubic feet per day of natural gas from Qatar’s in Washington, DC seeking redress for the illegal giant North Field. The processed gas will be confiscation of our assets without compensation. transported from Ras Laffan through a 48-inch diameter, 260-mile long pipeline to supply power Oxy’s massive seismic surveying project is underway in Libya, where vast areas both onshore and offshore are under explored. Oxy moved quickly once sanctions were lifted, successfully bidding on nine exploration blocks. The Libya Exploration Program is the largest in Oxy’s history.
  9. 9. Chemicals Our chemical segment core earnings of $901 million were the highest level achieved in more than a decade and exceeded our 2005 results by 16 percent. Demand for our major products remained strong across most sectors of the economy, including construction, for much of the year. Sales volumes also were sustained by the need to rebuild downstream inventories following the hurricanes in late 2005 and concerns about the potential for similar supply disruptions in 2006. In addition, we continued to benefit from the operation of assets acquired from Vulcan Materials Company in mid-2005 and have realized substantial synergies after the first full year following the integration of these assets. Overall chemical performance was driven by generally strong demand that resulted in healthy margins for our key products. Consistent with our focus on continued improvement in our assets and on health, environment and safety, OxyChem began a project to convert its membrane cell chlor-alkali plant at Taft, Louisiana to potassium hydroxide. The project, when complete in early 2008, will not only improve our cost position, but also will eliminate the last of our mercury cell production facilities in the United States. Oxy’s chemical subsidiary, OxyChem, is a leading North American manufacturer of vinyls, chlorine and caustic soda—the building blocks for such products as pharmaceuticals, water disinfectants and plastics. Based in Dallas, Texas, OxyChem has manufacturing facilities in the United States, Canada, Brazil and Chile. Pictured top left is OxyChem’s Ingleside, Texas plant; left, employees pose at OxyChem’s plant in Talcahuano, Chile. Below left is the control room at OxyChem’s Taft, Louisiana plant. Employee Recordable Injury Illness Trend* Rate Per 100 Employees Average of all U.S. industries 7.10 6.70 6.30 6.10 5.70 5.30 5.00 4.80 4.60 0.73 0.68 0.65 0.83 0.69 0.62 0.68 0.34 0.47 0.47 Occidental 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 * The US industry data for 2006 are not yet available.
  10. 10. Corporate Social Responsibility Clean, efficient and reliable energy supplies are assets, primarily by capturing natural gas for sale. critical to the growth and development of the global Occidental Oil and Gas was recognized by U.S. economy. Occidental is committed to finding and EPA as its International Partner of the Year for the developing the oil and natural gas necessary to fuel Natural Gas Star program. economic growth while upholding high standards of We recognize that an important part of our effort to social responsibility, protecting the environment and find and develop new oil and natural gas resources safeguarding the health and safety of our employees, is evaluating how these activities impact local our neighbors and our customers. communities. Maximizing the social, environmental Safety is a top priority for Occidental. In 2006, we and safety benefits of our activities while minimizing maintained our excellent safety record. Our 2006 any negative impacts is our goal. In 2004, Occidental’s Employee Injury and Illness Incidence Rate (IIR— Board of Directors adopted a comprehensive recordable injuries and illnesses per 100 worker Human Rights Policy to restate and reinforce the years) was 0.47, the same as our 2005 rate. We are company’s commitment to respect and promote proud that we have been able to maintain consistently human rights. Since then, we have made excellent low IIR rates while simultaneously meeting the progress in advancing the policy. More than 2,000 challenge of integrating two significant oil and gas employees, including most of the employees from our acquisitions into our operations. We are working new operations in Argentina, Colombia, Libya and diligently to implement enhanced safety and Oman have participated in human rights training environmental standards into these new operations. courses. The training is required for all Occidental managers, security employees and contractors Incidents are thoroughly investigated and Occidental’s and new employees in our international operations. safety programs evolve to meet the changing needs of our business as we grow. Occidental also maintains The policy also requires social impact assessments a strong health, environment and safety risk manage- in new work areas in non-U.S. locations. So far, ment and mitigation program, with results regularly assessments have been initiated in Oman, Libya, reviewed by senior management. Yemen, Colombia and Argentina. In Colombia, Occidental collaborated with Ecopetrol and Building on our history of strong environmental International Alert, a London-based Human Rights stewardship, Occidental Oil and Gas Corporation group, to introduce a new, comprehensive joined the new U.S. EPA-sponsored Natural Gas risk matrix, which has proven to be helpful in Star International program. Participation will provide evaluating potential impacts of oil field operations a recognized forum to document and present the on local communities. significant reductions in methane emissions that have been achieved in Occidental’s international In addition, our oil and gas business units are incorporating auditable social responsibility standards into the company’s Health, Environment and Safety Management Systems to help ensure our programs are fully integrated into our daily business practices. Occidental recognizes that responsible social, environmental and safety practices are critical to strong financial performance, and we strive to be a socially responsible corporate citizen. In September 2005, Oxy took over operations of the Mukhaizna field, one of the largest in Oman. Oxy and its partners are implementing a drilling and development program including a massive steam flood project.
  11. 11. Looking head While we are pleased with our progress in 2006, we are focused on the future to make sure that we grow stronger in 2007 and beyond. World energy demand is growing rapidly. With very little excess capacity, energy prices are likely to remain high and volatile. These factors will continue to drive investment across the energy sector. We plan to grow by building on our strengths and participating in new investment opportunities. One of our most important priorities is to add another core growth area to keep our new project inventory full of high return projects. Another priority is continued growth in our existing is the most extensive exploration initiative in core areas. We plan to aggressively pursue the Occidental’s history and we are excited by the exploitation of properties we acquired in California quality of the prospects. and Argentina in 2006 from Vintage and Plains Also, we are working on a number of new, high through a combination of primary drilling and EOR potential projects in the Middle East and North projects. We expect to continue with our consolida- Africa. We expect to announce success in winning tion initiatives in Texas and California. In addition, additional projects this year. we have a large inventory of EOR projects in the Permian Basin of Texas and New Mexico where we We are confident we can keep our combined oil and expect to offset moderate decline rates and keep gas production growing at a sustainable annual rate production stable. of 5 to 8 percent through 2010. Growth will come from the company’s Argentina assets, the giant Dolphin We expect the Dolphin Project to become fully gas project in Qatar and the United Arab Emirates operational around mid-year 2007, with gross and the Mukhaizna EOR project in Oman and Libya. production ramping up to 2 billion cubic feet per day by year-end. This production outlook does not depend on new exploration success, new EOR projects or new We expect to drill between 14 and 16 exploration acquisitions. However, we clearly hope that success wells in Libya this year, with 10 to 12 wells onshore in these areas will further enhance our outlook for and the remaining four offshore. This focused effort sustained growth. The Dolphin Project’s giant 1 by 2 kilometer gas plant under construction in Qatar will process natural gas produced in Qatar’s North Field. Oxy has a 24.5-percent interest in Dolphin Energy Limited with this project, which is one of the largest energy projects to be undertaken in the Middle East.
  12. 12. Oxy began exploring Oman’s Safah field in 1983 and discovered this 300-million-barrel field a year later. Through EOR success, extensive 3-D seismic surveying and an 85-percent exploration drilling success rate, Oxy has increased its production, reserves and scope of operations over its 20+ year tenure in Oman. In January 2007, we sold our 50-percent interest in We are committed to achieving superior financial the Vanyoganneft joint venture in western Siberia for and operational results, while adhering to the highest approximately $485 million. We recorded a gain of standards of ethical behavior, maintaining a safe and approximately $400 million in the first quarter of healthy work place and serving as a responsible 2007. This transaction reduces our risk profile and steward of the environment. We are focused on the provides additional cash to support our initiatives to fundamentals of the business, including optimizing enhance stockholder value in 2007 and beyond. profits and free cash flow per BOE, keeping finding and development costs competitive, growing oil and Maintaining financial discipline and flexibility remains gas reserves at a rate well in excess of production a key part of our strategy. We will continue to look and maintaining financial discipline. Focusing for opportunities to use our free cash flow to on these fundamentals should keep our returns on enhance stockholder value by maintaining a strong equity and capital employed in the top quartile—and balance sheet, expanding our share repurchase ultimately generate top quartile total returns for our program and investing for growth. We expect capital stockholders. This formula, which has served us well expenditures to rise by approximately $400 million in in the past, will continue to drive our performance in 2007, from $3 billion in 2006 to $3.4 billion in 2007, the future. for an increase of 13 percent. Under the stewardship of our board of directors We will assess the potential of using the excess and strong management team, we believe we have cash from operations to fund new projects, established a solid foundation for future growth and repurchase additional shares and make strategic profitability. Our stockholders have high expectations, acquisitions. Our decisions will be driven by our and we are committed to meeting those expectations. commitment to maximize value for our stockholders. We believe our employees are second-to-none. Dr. Ray R. Irani They are the most critical factor in the successful execution of our growth strategy. As we strive Chairman, President and Chief Executive Officer to achieve higher levels of performance, we are broadening our recruiting efforts to attract the most highly skilled and dedicated people. 2
  13. 13. Board and Officers Board of directors officers Dr. Ray R. Irani 1,8 Dr. Ray R. Irani Chairman, President and Chief Executive Officer, Chairman, President and Chief Executive Officer Occidental Petroleum Corporation Stephen I. Chazen Spencer braham 3,4,7 Senior Executive Vice President and Chief Financial Officer Chairman and Chief Executive Officer, The Abraham Group, LLC; former U.S. Secretary of Energy Executive vice Presidents Ronald W. Burkle 8 Donald P. de Brier Managing Partner, The Yucaipa Companies Executive Vice President, General Counsel and Secretary John S. Chalsty Richard W. Hallock 1,2,3,5,8 Principal, Muirfield Capital Management LLC; Executive Vice President — Human Resources former Chairman, Donaldson, Lufkin Jenrette, Inc. James M. Lienert Edward P. Djerejian 4,5,7 Executive Vice President — Finance and Planning Director, James A. Baker III Institute for Public Policy; John W. Morgan former U.S. Ambassador Executive Vice President; R. Chad Dreier 2,3 President, Oxy Oil and Gas — Western Hemisphere Chairman, President and Chief Executive Officer, R. Casey Olson The Ryland Group, Inc. Executive Vice President; John E. Feick 1,2,4,8 President, Oxy Oil and Gas — Eastern Hemisphere Chairman, Matrix Solutions Inc. Irvin W. Maloney 1,2,3,7 vice Presidents and Key Executives Retired Chairman and Chief Executive Officer, B. Chuck nderson Dataproducts Corporation President, OxyChem Rodolfo Segovia 1,3,4,5,7 James R. Havert Member of the Executive Committee, Inversiones Sanford; former President, Ecopetrol — Colombian national oil Vice President and Treasurer company Jim . Leonard ziz D. Syriani 1,2,5,6,8 Vice President and Controller President and Chief Executive Officer, The Olayan Group Robert M. McGee Rosemary Tomich 1,2,3,4,5,7 Vice President — Government Relations Owner, Hope Cattle Company and A.S. Tomich Lawrence P. Meriage Construction Company; Chairman and Chief Executive Vice President — Communications and Public Affairs Officer, Livestock Clearing, Inc. Donald L. Moore, Jr. Walter L. Weisman 4,5,8 Vice President and Chief Information Officer Private investor; former Chairman and Chief Executive Officer, American Medical International, Inc. www.bakerbuilds.com Roy Pineci Vice President — Internal Audit Member of the Executive Committee 1 Christopher G. Stavros Member of the Audit Committee 2 Vice President — Investor Relations Member of the Executive Compensation 3 Todd . Stevens and Human Resources Committee Vice President — Acquisitions and Corporate Finance Member of the Environmental, Health, 4 Baker | Brand Communications and Safety Committee Michael S. Stutts Member of the Corporate Governance, Nominating and 5 Vice President — Tax; Chief Tax Counsel Social Responsibility Committee Lead Independent Director Richard . Swan 6 Member of the Charitable Contributions Committee Vice President — Health, Environment and Safety 7 Member of the Dividend Committee 8 As of December 31, 2006
  14. 14. auditors annual certifications KPMG LLP Occidental has filed the certifications of the chief Los Angeles, California executive officer and chief financial officer required by Section 302 of the Sarbanes-Oxley Act of 2002 as Exhibits 31.1 and 31.2 to its 2006 Annual transfer agent and registrar Report on Form 10-K filed with the Securities Mellon Investor Services LLC and Exchange Commission. In addition, in 2006, Shareholder Relations Occidental submitted to the NYSE a certificate Newport Office Center VII of the chief executive officer stating that he is not 480 Washington Boulevard aware of any violation by the company of the Jersey City, New Jersey 07310 NYSE corporate governance listing standards. (800) 622-9231 www.melloninvestor.com/isd current news and general inforMation stock exchange listing Information about Occidental, including press Common Stock releases, is available on the Internet at New York Stock Exchange (NYSE) www.oxy.com. In addition, our investor package is available by calling toll-free 1-888-OXYPETE; dividend reinvestMent Plan (1-888-699-7383). Occidental stockholders owning 25 or more shares of common or preferred stock registered additional PuBlications in their name are eligible to purchase additional availaBle to stockholders shares of common stock under the Dividend The Health, Environment, Safety and Social Reinvestment Plan by investing dividends on a Responsibility Report, and Occidental’s Corporate minimum of 25 shares and optional cash Governance Principles are available upon request payments of up to $10,000 per month. by writing to Occidental, and at www.oxy.com. Information may be obtained from: Mellon Investor Services LLC at www.melloninvestor.com. corPorate headQuarters oil and gas cheMicals 10889 Wilshire Boulevard Occidental Oil and Gas Corporation Occidental Chemical Corporation Los Angeles, California 90024-4201 10889 Wilshire Boulevard Occidental Tower 310.208.8800 Los Angeles, California 90024-4201 5005 LBJ Freeway www.oxy.com (310) 208-8800 Dallas, Texas 75244-6119 www.oogc.com P.O. Box 809050 Dallas, Texas 75380-9050 investor relations Occidental Middle East (972) 404-3800 1230 Avenue of the Americas Crescent Towers, Zayed The First Street, www.oxychem.com 8th Floor, Suite 800 Khalidyah New York, New York 10020-1508 P.O. Box 73243 occidental international (212) 603-8111 Abu Dhabi, United Arab Emirates corPoration investorrelations_newyork@oxy.com +971 2 691 7200 1717 Pennsylvania Avenue, NW stockholder relations Occidental Energy Marketing, Inc. Suite 400 5 Greenway Plaza Washington, DC 20006-4614 10889 Wilshire Boulevard Houston, Texas 77046-0506 (202) 857-3000 Los Angeles, California 90024-4201 P.O. Box 27570 (310) 443-6459 Houston, Texas 77227-7570 (713) 215-7000