Occidental Petroleum 2003 Annual Report Download - page 14

OMAN
Occidental's Oman business is centered in Block 9 where it holds a
65-percent working interest in the production-sharing contract for this block.
Net production to Occidental averaged 12,000 barrels of oil per day in
2003.
Occidental has entered into a gas sales and purchase agreement with the
Government of Oman to sell approximately 120 million gross cubic feet of natural
gas per day from Block 9 operations to the Government. First gas sales are
anticipated in mid-2004. This agreement has opened up a market for previously
stranded gas that is associated with oil production from the Safah field.
Occidental also continues its exploration program in the adjacent Block 27.
In 2003, the Government of Oman approved a farm-out of a 35-percent working
interest in Block 27 to Mitsui E&P Middle East B.V. (Mitsui). As a result,
Occidental and Mitsui now share the same working interest percentages in both
Block 9 and Block 27.
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LIBYA
Occidental suspended all activities in Libya in 1986 as a result of
economic sanctions imposed by the U.S. government, but continues to hold an
interest in the assets that it formerly operated. Since the imposition of
sanctions, Occidental has derived no economic benefit from its Libyan interests
and has no Libyan assets on its balance sheet. Over the past two years,
Occidental representatives have met with Libyan officials, under specific
authority and guidelines set by the U.S. Treasury Department's Office of Foreign
Assets Control (OFAC), for the purpose of fact-finding and discussing generally
the status of its contractual interests and property rights. Recent developments
that have led to an improvement in U.S.-Libya relations have given rise to
speculation that the sanctions could be eased, or perhaps lifted, in the near
future. Until that happens, Occidental will continue complying with the existing
sanctions and its OFAC licenses. Occidental remains very interested in returning
to Libya, where it had considerable success in finding and developing large
volumes of commercial oil reserves. Management is carefully monitoring the
dynamics of the evolving U.S.-Libya relationship.
OTHER EASTERN HEMISPHERE
PAKISTAN
Occidental holds oil and gas working interests, that vary from 25 to 50
percent, in four Badin Blocks in Pakistan. BP is the operator. In 2002,
Occidental purchased additional interests in two of these blocks from the
Government of Pakistan for approximately $72 million. 2003 gross production was
102,000 BOE per day, while Occidental's net share was approximately 22,000 BOE
per day.
RUSSIA
In Russia, Occidental owns 50 percent of a joint venture company,
Vanyoganneft, that operates in the western Siberian oil basin. Production for
2003 was approximately 30,000 BOE per day, net to Occidental.
LATIN AMERICA
COLOMBIA
Occidental has a 35-percent net share of production and is the operator of
the Cano Limon oil field in Colombia. Cumulative gross production from Cano
Limon reached one billion barrels of oil in 2003. Colombia's national oil
company, Ecopetrol, operates the Cano Limon-Covenas oil pipeline and
marine-export terminal. The pipeline transports oil produced from the Cano Limon
field for export to international markets. In addition, Occidental has working
interests in three exploration blocks: Rio Aipe (50 percent), Chipiron (88
percent) and Cosecha (75 percent).
Production in 2003 approximated 2002 levels as improved security along the
export pipeline reduced the number of attacks by local terrorist groups below
the peak levels of 2001. Occidental's net share of 2003 production averaged
32,000 barrels of oil per day. Occidental's interests in Colombia account for