Occidental Petroleum Navigates Market Challenges with Berkshire’s Backing and Strategic Growth Plans

Strategic Position and Recent Developments

Occidental Petroleum Corporation (NYSE:OXY) stands as a prominent American oil and gas exploration and production company headquartered in Houston, Texas, with operations spanning the United States, the Middle East, and Latin America.

Warren Buffett’s Berkshire Hathaway has recently demonstrated continued confidence in Occidental, emerging as the company’s biggest investor with a 28.2% stake. The company’s performance remains robust, with first-quarter 2025 revenue reaching $6.843 billion, marking a 14% increase year-over-year.

Financial Performance and Strategic Initiatives

Occidental has been making headlines with its strong third-quarter performance, achieving record-high U.S. production and significant debt reduction. The company generated $1.5 billion in free cash flow and reported an adjusted profit of $1.00 per diluted share.

The company has successfully utilized its free cash flow to maintain dividend payments and address debt following its $12 billion CrownRock acquisition. Notably, Occidental achieved its near-term debt repayment target of $4.5 billion seven months ahead of schedule, thanks to strong cash flow generation and strategic asset sales.

Future Outlook and Sustainability Initiatives

A significant development in Occidental’s strategy is the Stratos carbon capture and storage hub. The company is set to commence operations this year, with plans to have half its capacity of 250,000 tonnes online by year-end and the remaining capacity operational by mid-next year. This initiative aims to reduce carbon emissions while generating steady cash flow through carbon credits and net-zero oil sales.

Industry analysts have set a fair value estimate of $59 per share for Occidental, with projections suggesting West Texas Intermediate oil prices will average $62 per barrel in 2025 and $58/bbl in 2026. Despite the stock’s recent 30% decline from its peak, Berkshire Hathaway’s continued investment signals strong confidence in Occidental’s future value potential as the company executes its strategic plan.