Occidental Petroleum Explained: Oil Giant or Carbon Tech Pioneer?

Summary

• Occidental Petroleum is positioning itself at the crossroads of traditional oil production and large-scale carbon removal technology.

• The company’s exposure to the Permian Basin, chemicals, and Direct Air Capture creates a rare blend of cash flow and long-term optionality.

• Backing from Warren Buffett has strengthened investor confidence in Occidental Petroleum’s strategy and balance sheet recovery.

Occidental Petroleum sits in a rare position within the energy sector, balancing legacy oil production with emerging carbon technologies. The company is attempting to evolve rather than exit fossil fuels as global energy priorities shift.

Founded in 1920, Occidental Petroleum has grown into a multinational operator across the United States, the Middle East, and North Africa. Its modern strategy focuses on operating efficiently in a lower-carbon world rather than abandoning oil entirely.

At its core, Occidental Petroleum is built on three pillars: oil and gas production, chemical manufacturing, and carbon management. This structure gives the company multiple levers to manage risk across economic cycles.

Oil and gas remain the backbone, with a dominant presence in the Permian Basin. Occidental Petroleum specialises in enhanced oil recovery, allowing it to extract more value from mature fields at lower costs.

Beyond the Permian, the company operates in the DJ Basin, the Gulf of Mexico, and several international regions. This geographic spread helps stabilise revenue and reduce dependence on any single market.

OxyChem, the company’s chemical division, adds another layer of diversification. Chemical demand often remains resilient when oil prices weaken, supporting cash flow during downturns.

What truly differentiates Occidental Petroleum is its investment in Direct Air Capture technology. The company is building large-scale facilities designed to remove carbon dioxide directly from the atmosphere.

This carbon capture strategy is both environmental and commercial. Captured CO₂ can be reused for enhanced oil recovery or sold as part of emerging carbon offset markets.

Investor interest intensified after Warren Buffett, through Berkshire Hathaway, accumulated a significant stake in the company. His backing signalled confidence in Occidental Petroleum’s assets, leadership, and long-term vision.

Financially, the company has rebounded sharply after pandemic-era stress. Debt reduction and stronger cash flow have restored flexibility to invest across both energy production and carbon technology.

Risks remain, including oil price exposure and the early-stage economics of Direct Air Capture. Still, Occidental Petroleum stands out as one of the few energy companies actively trying to bridge today’s energy needs with tomorrow’s climate realities.