Occidental Petroleum plans to sell stake in Middle East/ North African assets

The fourth-largest US oil and gas company, Occidental Petroleum Corp, yesterday said that it plans to sell a minority stake in its Middle East and North African operations, as part of a restructuring that will increase shareholders value.

"Our goal is to become a somewhat smaller company with more manageable exposure to political risk," said Stephen Chazen, president and CEO. "We will continue to consider additional strategic alternatives for the company to maximise total returns to our shareholders."

Its assets in the Middle East and North African, which include oilfields in the UAE, Bahrain, Oman, Qatar, Iraq, Yemen and Libya, could be worth between $15 to $20 billion, according to analysts.

These assets have proven reserves of 929 Mmboe and produced 263 Mboepd in the first six months of this year.

Occidental Petroleum will also pursue strategic alternatives for certain Midcontinent assets, such as oil and gas interests in the Williston Basin, Hugoton Field, Piceance Basin and other Rocky Mountain assets.

It also expects $1.3 billion from the sale of a portion of its 35-per cent investment in Plains All-American Pipeline's general partner. Occidental said that its remaining interest would be worth about $3.4 billion.

''These actions will generate a significant amount of proceeds. Together with the excess cash on the company's balance sheet, these funds will largely be used to reduce Occidental's capitalisation. The company expects to complete the strategic review in the coming months and will disclose material developments as they occur,'' the company said in a release.

Occidental Petroleum is an international oil and gas exploration and production company with operations in the US, Middle East, North Africa and Latin America regions.

Its wholly owned subsidiary, OxyChem, manufactures and markets chlor-alkali products and vinyls.