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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
 Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2008
o Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from to
Commission File Number 1-9210
Occidental Petroleum Corporation
(Exact name of registrant as specified in its charter)
State or other jurisdiction of incorporation or organization Delaware
I.R.S. Employer Identification No. 95-4035997
Address of principal executive offices 10889 Wilshire Blvd., Los Angeles, CA
Zip Code 90024
Registrant’s telephone number, including area code (310) 208-8800
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
10 1/8% Senior Debentures due 2009 New York Stock Exchange
9 1/4% Senior Debentures due 2019 New York Stock Exchange
Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  YES o NO
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. (Note: Checking the box
will not relieve any registrant required to file reports pursuant to Section13 or 15(d) of the Exchange Act from their obligations under those
Sections). o YES  NO
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.  YES o NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. (See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act).
Large Accelerated Filer  Accelerated Filer o Non-Accelerated Filer o Smaller Reporting Company o
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). o YES  NO
The aggregate market value of the voting common stock held by nonaffiliates of the registrant was approximately $71.9 billion, computed by
reference to the closing price on the New York Stock Exchange composite tape of $89.86 per share of Common Stock on June 30, 2008.
Shares of Common Stock held by each executive officer and director have been excluded from this computation in that such persons may be
deemed to be affiliates. This determination of potential affiliate status is not a conclusive determination for other purposes.
At January 31, 2009, there were 810,294,560 shares of Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement, filed in connection with its May 1, 2009, Annual Meeting of Stockholders, are
incorporated by reference into Part III.

Table of contents

  • Page 1
    ... File Number 1-9210 Occidental Petroleum Corporation (Exact name of registrant as specified in its charter) State or other jurisdiction of incorporation or organization I.R.S. Employer Identification No. Address of principal executive offices Zip Code Registrant's telephone number, including area...

  • Page 2
    ...Security Holders Executive Officers Market for Registrant's Common Equity, Related Stockholder Matters and Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Strategy Oil and Gas Segment Chemical Segment...

  • Page 3
    .... OIL AND GAS OPERATIONS General Occidental's domestic oil and gas operations are located in Texas, New Mexico, California, Kansas, Oklahoma, Utah and Colorado. International operations are located in Argentina, Bolivia, Colombia, Libya, Oman, Qatar, the UAE and Yemen. For additional information...

  • Page 4
    ... and acquiring rights to explore and develop in areas with known oil and gas deposits. Occidental also competes by increasing production through enhanced oil recovery projects in mature and underdeveloped fields and making strategic acquisitions. CHEMICAL OPERATIONS OxyChem manufactures and markets...

  • Page 5
    ... barrels of oil storage Not applicable Markiting and Trading Texas Powir Giniration California, Texas and Louisiana (a) 1,800 megawatts per hour and 1.6 million pounds of steam per hour Capacity requires additional gas compression and customer contracts. CAPITAL EXPENDITURES For information on...

  • Page 6
    ... levels, production disruptions, the actions of OPEC, currency exchange rates, speculation, worldwide drilling and exploration activities, weather, geophysical and technical limitations and other matters may affect the supply and demand dynamics of oil and gas, contributing to price volatility...

  • Page 7
    ...- Oxy Oil & Gas, International since 2008; President, Eastern Hemisphere 2005-2008; Occidental Development Company: 2004, President; Occidental Middle East Development Company: 2001-2003, President. James M. Lienert R. Casey Olson 55 Martin A. Cozyn 48 Executive Vice President, Human Resources...

  • Page 8
    ... financial data, which are included in this report after the Notes to the Consolidated Financial Statements, set forth the range of trading prices for the common stock as reported on the composite tape of the New York Stock Exchange and quarterly dividend information. In May 2006, Occidental...

  • Page 9
    ... Petroleum Corporation, Apache Corporation, BP p.l.c. (BP), Chevron Corporation, ConocoPhillips, Devon Energy Corporation, ExxonMobil Corporation, Royal Dutch Shell plc and Occidental. Analysis for the peer group includes five years of historical performance data as noted above for the common stock...

  • Page 10
    ... common stock outstanding, net of shares held in treasury stock, by the year-end closing stock price. ITEM 7 AND 7A Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) STRATEGY General In this report, "Occidental" refers to Occidental Petroleum Corporation...

  • Page 11
    ... Hills oil and gas field in California in 1998, followed by a series of purchases in the Permian Basin in west Texas and New Mexico, the integration of Vintage Petroleum, Inc. (Vintage) operations acquired in 2006, and Plains Exploration & Production Company (Plains) assets acquired in 2006 and 2008...

  • Page 12
    11 OxyChem's strategy is to be a low-cost producer in order to maximize its cash flow generation. OxyChem concentrates on the

  • Page 13
    ... and should be evaluated independently of any other rating. OIL AND GAS SEGMENT Business Environment Oil and gas prices are the major variables that drive the industry's short and intermediate term financial performance. Average oil prices were stronger in 2008 over 2007, as a result of steadily...

  • Page 14
    ... 31, 2007, and then dropped to $44.60 per barrel at the end of 2008. The average WTI market price for 2008 was $99.65 per barrel compared with $72.32 per barrel in 2007. Occidental's realized price for crude oil as a percentage of average WTI prices was approximately 89 percent and 90 percent for...

  • Page 15
    ...the amount of $450 million in June 2008. Occidental's remaining annual payments of $150 million each, are due in each of the next two years. Production-Sharing Contracts (PSC) Occidental conducts its operations in Qatar, Oman, Libya and Yemen and the Dolphin Project under PSCs. Under such contracts...

  • Page 16
    ... of existing wells. Occidental had an average of 150 well service units working in the Permian area during 2008 performing well maintenance and workovers. 13 Approximately 66 percent of Occidental's Permian Basin oil production is from fields that actively employ the application of CO 2 flood

  • Page 17
    ...BOE per day. At December 31, 2008, proved reserves for these operations totaled 250 million BOE. Middli East/North Africa Middli East/North Africa 1. Libya 2. Yemen 3. Oman 4. United Arab Emirates 5. Qatar Dolphin Projict Occidental's investment in the Dolphin Project, which was acquired in 2002...

  • Page 18
    working interest. Additionally, Occidental holds a 92.5-percent working interest in the Block 13 exploration block. 14 In 2008, Occidental received approval from the Government of Qatar for the third phase of field development of the ISND field. Drilling

  • Page 19
    ...,000 BOE per day in 2008, and proved reserves totaled 142 million BOE as of December 31, 2008. Libya In 2005, Occidental signed an agreement with the Libyan National Oil Corporation (NOC) which allowed it to re-enter the country and participate in exploration and production operations in the Sirte...

  • Page 20
    ... of 23 concessions located in the San Jorge Basin in southern Argentina and the Cuyo Basin and Neuquén Basin in western Argentina. Occidental operates 20 of the concessions with a 100-percent working interest. 15 During 2008, Occidental drilled 162 new wells and performed a number of recompletions...

  • Page 21
    ... the project. Production from the field is transported by Ecopetrol through its pipeline and sold to Ecopetrol. Additionally, Occidental holds various working interests in two exploration blocks. Occidental's share of 2008 production from its Colombia operations was approximately 37,000 BOE per day...

  • Page 22
    ... Elk Hills and Permian Basin properties both transferred 22 million BOE into proved developed reserves from proved undeveloped reserves . Risirvis Evaluation and Riviiw Prociss A senior corporate officer of Occidental is responsible for the internal audit and review of its oil and gas reserves data...

  • Page 23
    ...of gas and market prices for NGLs. In June 2008, Occidental signed an agreement for a third party to construct a west Texas gas processing plant and pipeline infrastructure that will provide CO 2 for Occidental's EOR projects in the Permian Basin. Occidental will own and operate the new facility and...

  • Page 24
    ... Transportation Margin and cash flow from pipeline transportation operations mainly reflect volumes shipped. The Dolphin Pipeline investment contributes significantly to pipeline transportation results. See "Oil and Gas Segment -Middle East/North Africa - Dolphin Project." In August 2008, Occidental...

  • Page 25
    ... Occidental's contract for the operation of Block 15. The 2006 amount includes a $253 million after-tax loss for Ecuador and the Vintage properties held for sale (and subsequently sold in 2006) and $242 million after-tax income for the operations of Horn Mountain and Pakistan. 19 Oil and Gas

  • Page 26
    ...Sales Price table) 605 (6) 2 (b) 573 (5) 549 (5) 1 2 570 601 545 Production per Day United States Oil and liquids (MBBL) Natural gas (MMCF) Latin America Crude oil (MBBL) Argentina Colombia Total Natural gas (MMCF) Middle East/North Africa Oil and liquids (MBBL) Oman Dolphin Qatar Yemen 2008...

  • Page 27
    ... Yemen-Occidental net interest Total Worldwide Production (MBOE) 546 (5) (6) 2 567 2 543 603 (See footnotes following the Average Sales Price table) In millions, except as indicated 2008 2007 2006 Average Sales Prices Crude Oil Prices ($ per bbl) United States Latin America Middle East...

  • Page 28
    ...matters discussed above, oil and gas segment earnings for 2007, compared to 2006, reflected higher crude oil prices and higher oil and gas production, partially offset by increased DD&A rates and higher operating and exploration expenses. Chemical In millions Segment Sales Segment Earnings Capital...

  • Page 29
    Discontinued operations, net of tax Total Corporate (a) Amounts shown after tax. 18 $ 256 $ 322 407 $ (11) 75 TAXES Deferred tax liabilities, net of deferred tax assets of $1.4 billion, were $2.5 billion at December 31, 2008. The current portion of the deferred tax assets of $200 million is ...

  • Page 30
    ... net sales in 2007, compared to 2006, reflects higher crude oil prices and increased oil and gas volumes, including production from the start-up of the Dolphin Project in the third quarter of 2007. Interest, dividends and other income in 2007 and 2006 included gains related to litigation settlements...

  • Page 31
    ... 2007, due to the increase in sales volumes, mainly from the Dolphin Project, and higher DD&A rates caused by the cost of new proved reserve additions being higher than the existing average rates, especially in Latin America and the Middle East/North Africa. The 2008 amount also included a charge of...

  • Page 32
    ...Marketing and trading assets and other Inventories Prepaid expenses and other Total current assets Investments in unconsolidated entities Property, plant and equipment, net Long-term receivables and other assets, net CURRENT LIABILITIES Current maturities of long-term debt and notes payable Accounts...

  • Page 33
    Liabilities and Stockholders' Equity

  • Page 34
    ... in current maturities of long-term debt and notes payable is due to the 2009 maturities of the Dolphin Energy loans and Occidental's 10 1/8-percent senior notes. The decrease in accounts payable reflected lower crude oil prices and volumes in the marketing and trading operations during the fourth...

  • Page 35
    ... a substantial portion can be delayed until industry costs are aligned with product prices. Occidental will continue to fully fund much of its Middle East operations, the exploration programs in California, Utah and Argentina, and the midstream and marketing and CO2 programs, which it believes have...

  • Page 36
    Dolphin Project See "Oil and Gas Segment - Business Review - Middle East/North Africa - Dolphin Project" and "Midstream, Marketing and Other Segment - Business Review - Dolphin Project" for further information about the structure of the Dolphin Project. In July 2005, Dolphin Energy entered into a ...

  • Page 37
    ...date been successful in sharing response costs with other financially sound companies. With respect to all such lawsuits, claims and proceedings, including environmental proceedings, Occidental...below. 26 Lawsuits have been filed in Nicaragua against OxyChem and other companies that once manufactured...

  • Page 38
    ... generally increased over time and could continue to rise in the future. Occidental factors environmental expenditures for its operations into its business planning process as an integral part of producing quality products responsive to market demand. Environmental Remediation The laws that require...

  • Page 39
    ... 27 percent of Occidental's total assets at that date. Of such assets, approximately $6.9 billion are located in the Middle East/North Africa and approximately $4.3 billion are located in Latin America. For the year ended December 31, 2008, net sales outside North America totaled $8.8 billion, or...

  • Page 40
    ... oil field services. The rapid and significant decline in product prices in the second half of 2008 has resulted in capital and operating costs that are not aligned with current product prices. Current pricing, coupled with a sustained high production cost environment, could cause management's plans...

  • Page 41
    ... useful lives of Occidental's chemical plants include sustained higher or lower product prices, which are particularly affected by both domestic and foreign competition, demand, feedstock costs, energy prices, environmental regulations and technological changes. Occidental performs impairment tests...

  • Page 42
    ... 2008, the FASB issued FSP SFAS No. 132(R)-1. This FSP requires companies to enhance disclosures related to the assets held in defined benefit plans and other post-retirement benefits. Occidental will be required to provide greater detail as to the categories of plan assets as well as the level...

  • Page 43
    31 SFAS No. 157

  • Page 44
    ... Managimint Occidental conducts its risk management activities for energy commodities (which include buying, selling, marketing, trading, and hedging activities) under the controls and governance of its risk control policy. The President and Chief Financial Officer and the Risk Management Committee...

  • Page 45
    ...139) During the next twelve months, Occidental expects that approximately $48 million of net derivative after-tax gains included in Accumulated Other Comprehensive Income, based on their valuation as of December 31, 2008, will be recognized in earnings. Hedge ineffectiveness did not have a material...

  • Page 46
    ... in fair value with a 95-percent level of confidence. The marketing and trading value at risk was immaterial during all of 2008. Interest Rate Risk Giniral Occidental's exposure to changes in interest rates relates primarily to its long-term debt obligations, and is not expected to be material...

  • Page 47
    33 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

  • Page 48
    ... financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Occidental's internal control over financial...

  • Page 49
    ...defined benefit pension and other postretirement plans. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Occidental Petroleum Corporation and subsidiaries' internal control over financial reporting as of December 31, 2008, based...

  • Page 50
    ... on the Company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about...

  • Page 51
    ...except per-share amounts For the years ended December 31, Occidental Petroleum Corporation and Subsidiaries 2008 $ 24,217 236 27 24,480 $ 2007 2006 REVENUES AND OTHER INCOME Net sales Interest, dividends and other income Gains on disposition of assets, net 18,784 355 $ 874 20,013 17,175 381...

  • Page 52
    ... Assets at December 31, Occidental Petroleum Corporation and Subsidiaries 2008 2007 CURRENT ASSETS Cash and cash equivalents Trade receivables, net of reserves of $45 in 2008 and $35 in 2007 $ 1,777 3,117 1,012 958 308 7,172 1,263 $ 1,964 4,973 416 910 Marketing and trading assets and other...

  • Page 53
    ..., except share and per-share amounts Occidental Petroleum Corporation and Subsidiaries Liabilities and Stockholders' Equity at December 31, 2008 2007 CURRENT LIABILITIES Current maturities of long-term debt and notes payable Accounts payable Accrued liabilities $ 698 $ 47 4,263 1,611...

  • Page 54
    Consolidated Statements of Stockholders' Equity In millions Occidental Petroleum Corporation and Subsidiaries Common Stock Treasury Stock Balance, December 31, 2005 Net income Pension and postretirement adjustments, net of tax $ 161 $ - - - - 11(a) (8) - Additional Paid-in Capital $ 4,827 ...

  • Page 55
    ...from long-term debt Payments of long-term debt and capital lease liabilities Proceeds from issuance of common stock Purchases of treasury stock Redemption of preferred stock Cash dividends paid Stock options exercised Excess tax benefits related to share-based payments Other financing, net - (2,819...

  • Page 56
    ..., contracts that meet specified accounting criteria are recorded at fair value. Revenue from all marketing and trading activities is reported on a net basis. Revenue from chemical product sales is recognized when the product is shipped and title has passed to the customer. Prices are fixed at...

  • Page 57
    ... financial statements include assets of approximately $11.2 billion as of December 31, 2008, and net sales of approximately $8.8 billion for the year ended December 31, 2008, relating to Occidental's operations in countries outside North America. Occidental operates some of its oil and gas...

  • Page 58
    ... useful lives of Occidental's chemical plants include sustained higher or lower product prices, which are particularly affected by both domestic and foreign competition, demand, feedstock costs, energy prices, environmental regulations and technological changes. Occidental performs impairment tests...

  • Page 59
    ...be made at this time. Occidental has identified conditional asset retirement obligations at a certain number of its facilities that are related mainly to plant decommissioning. Occidental believes that there is an indeterminate settlement date for these asset retirement obligations because the range...

  • Page 60
    ... the quoted market price of Occidental's common stock. For stock options (Options), stocksettled stock appreciation rights (SARs), performance stock awards (PSAs) and total shareholder return incentives (TSRIs), compensation expense is measured on the grant date using valuation models. Compensation...

  • Page 61
    ... oil recovery projects in the Permian Basin. Occidental will own and operate the new facility and pipeline system. In June 2008, Occidental and its partner signed 30-year agreements (including a potential 5-year extension) with the Libyan National Oil Company (NOC) to upgrade its existing petroleum...

  • Page 62
    ...) for discontinued operations related to Ecuador for the year ended December 31, 2006 were $275 million and $(529) million, including a pre-tax write-off of $(673) million. In September 2006, Occidental acquired oil and gas assets located in the Permian Basin in West Texas and California from Plains...

  • Page 63
    ... $ 2008 123 412 494 2007 $ 92 349 571 1,012 (102) 910 $ 1,029 (71) 958 $ NOTE 5 LONG-TERM DEBT Long-term debt consisted of the following: Balance at December 31, (in millions) Occidental Petroleum Corporation 7.0% senior notes due 2013 6.75% senior notes due 2012 4.25% medium-term senior...

  • Page 64
    ... in the form of letters of credit. Borrowings under the Credit Facility bear interest at various benchmark rates, including LIBOR, plus a margin based on Occidental's senior debt ratings. Additionally, Occidental paid an annual facility fee of 0.05 percent to 0.06 percent in 2008 on the total...

  • Page 65
    ... (a) Primarily relates to price changes on existing production hedges. $ $ (327) (576) INTEREST RATE RISK Occidental's exposure to changes in interest rates relates primarily to its long-term debt obligations, and is not expected to be material. CREDIT RISK Occidental's energy contracts are...

  • Page 66
    ...refinery in Louisiana where Occidental reimburses the current owner and operator for certain remedial activities - accounted for 60 percent of Occidental's reserves associated with these sites. 52 Five sites - chemical plants in Kansas, Louisiana and New York and two groups of oil and gas properties...

  • Page 67
    ... and New York and two groups of oil and gas properties in the southwestern United States - accounted for 71 percent of Occidental's reserves associated with its operated sites. Five other sites - former chemical plants in Delaware, Michigan, Tennessee and Washington and a closed coal mine in...

  • Page 68
    ... terminal and pipeline capacity, drilling rigs and services, electrical power, steam and certain chemical raw materials. Occidental has certain other commitments under contracts, guarantees and joint ventures, including purchase commitments for goods and services at market-related prices and certain...

  • Page 69
    ... of $92 million in 2006. Additional paid-in capital was credited $77 million in 2008, $43 million in 2007 and $140 million in 2006 for an excess tax benefit from the exercise of certain stock-based compensation awards. Occidental adopted FASB Interpretation No. 48 effective January 1, 2007. As of...

  • Page 70
    ... Options exercised and other, net Balance, December 31, 2008 Common Stock 804,430 57,257 8,992 870,679 2,933 3,512 877,124 2,018 2,281 881,423 In May 2006, Occidental amended its Restated Certificate of Incorporation to increase the number of authorized shares of common stock to 1.1 billion. The...

  • Page 71
    ... in the case of death or disability, during the director's period of service as a member of the Board. Compensation expense for these awards was measured using the quoted market price of Occidental's common stock on the grant date and was recognized at the grant date. The table below summarizes...

  • Page 72
    ...line basis over the vesting period. The expected life is estimated based on the actual weighted-average life of historical exercise activity of the grantee population at the grant date. The volatility factors are based on the historical volatilities of Occidental common stock over the expected lives...

  • Page 73
    ... under certain conditions. Dividend equivalents are paid during the vesting period. Compensation expense for RSUs is measured using the quoted market price of Occidental's common stock on the grant date. The weighted-average, grant-date fair values of the RSUs granted in 2008, 2007 and 2006...

  • Page 74
    ...as Long-Term Incentive awards). CSSUs are equivalent in value to actual shares of Occidental common stock but are paid in cash at the time of vesting. The fair value of the CSSUs is initially measured using the grant date quoted market price of Occidental common stock and expensed on a straight-line...

  • Page 75
    ... contributions by Occidental based on plan-specific criteria, such as base pay, age level and employee contributions. Certain salaried employees participate in a supplemental retirement plan that provides restoration of benefits lost due to governmental limitations on qualified retirement benefits...

  • Page 76
    ... pension expense. Occidental funds and expenses negotiated pension increases for domestic union employees over the terms of the applicable collective bargaining agreements. 62 The following table sets forth the weighted-average assumptions used to determine Occidental's benefit obligation and net...

  • Page 77
    ... curve in 2008 and 2007. The weighted-average rate of increase in future compensation levels is consistent with Occidental's past and anticipated future compensation increases for employees participating in retirement plans that determine benefits using compensation. The assumed long-term rate of...

  • Page 78
    ...financing facility represents a substantial majority of Occidental's guarantees. In Ecuador, Occidental has a 14-percent interest in the Oleoducto de Crudos Pesados Ltd. (OCP) oil export pipeline, which Occidental records as an equity investment. The project was funded in part by senior project debt...

  • Page 79
    ...of December 31, 2008, Occidental also had obligations relating to performance bonds totaling $14 million. Occidental has a 50-percent interest in Elk Hills Power, LLC (EHP), a limited liability company that operates a gas-fired, powergeneration plant in California, which it accounts for as an equity...

  • Page 80
    ... midstream and marketing operations were reported under corporate and other. In the last two years, the Dolphin Project began transporting natural gas to the United Arab Emirates and Occidental acquired a common carrier pipeline system in the Permian Basin, various gas processing plants and the...

  • Page 81
    INDUSTRY SEGMENTS In millions Midstream, Marketing and Other Corporate and Oil and Gas Chemical Eliminations (680) (372) (4,629) 18 (f) Total YEAR ENDED DECEMBER 31, 2008 Net sales Pretax operating profit (loss) Income taxes Discontinued operations, net $ $ 18,187(a) $ 10,651(d) - - $ 5,112...

  • Page 82
    ...GEOGRAPHIC AREAS In millions Net sales (a) 2007 For the years ended December 31, United States Foreign Qatar Colombia Oman Yemen Libya Argentina Other Foreign Total Foreign Total (a) $ 2008 15,258 $ 3,298 1,721 1,207 1,016 748 504 465 2006 12,300 $ 11,569 $ Property, plant and equipment, net...

  • Page 83
    ... of additions in Argentina, California and Yemen from the Vintage acquisition as well as existing unproved properties in California, Libya and Oman. Includes costs related to leases, exploration costs, lease and well equipment, other equipment, capitalized interest, asset retirement obligations and...

  • Page 84
    ... incurred in oil and gas property acquisition, exploration and development activities, whether capitalized or expensed, were as follows: Consolidated Subsidiaries Latin Middle East/ America North Africa In millions FOR THE YEAR ENDED DECEMBER 31, 2008 Property acquisition costs Proved properties...

  • Page 85
    ... (b) Production costs Other operating expenses Depreciation, depletion and amortization Taxes other than on income Charges for impairments Exploration expenses Pretax income Income tax expense (d) Results of operations United States Consolidated Subsidiaries Middle East/ Latin North Africa America...

  • Page 86
    ... PER UNIT OF PRODUCTION (Unaudited) Consolidated Subsidiaries Latin Middle East/ America North Africa United States Total Other Interests (a) FOR THE YEAR ENDED DECEMBER 31, 2008 Revenues from net production of barrel of oil equivalent ($/bbl.) (b,c) Production costs Other operating expenses...

  • Page 87
    2008 Quarterly Financial Data (Unaudited) In millions, except per-share amounts Occidental Petroleum Corporation and Subsidiaries Three months ended Segment net sales Oil and gas Chemical Midstream, marketing and other Eliminations Net sales March 31 $ 4,518 1,267 405 (170) 6,020 3,478 $ June 30...

  • Page 88
    2007 Quarterly Financial Data (Unaudited) In millions, except per-share amounts Occidental Petroleum Corporation and Subsidiaries Three months ended Segment net sales Oil and gas Chemical Midstream, marketing and other Eliminations Net sales March 31 June 30 September 30 December 31 $ $ $ ...

  • Page 89
    ...In many cases, activity-based cost models for a reservoir are utilized to project operating costs as production rates and the number of wells for production and injection vary. A senior corporate officer of Occidental is responsible for the internal audit and review of its oil and gas reserves data...

  • Page 90
    ... exploration, production-sharing and concession agreements. Approximately one percent of the proved developed reserves at December 31, 2008 are nonproducing. The majority of these volumes are located in the United States and the remainder is in Latin America and Middle East/North Africa. 76 Gas...

  • Page 91
    ... Reserves In billions of cubic feet United States Consolidated Subsidiaries Middle East/ Latin North Africa America Total Other Interests PROVED DEVELOPED AND UNDEVELOPED RESERVES Balance at December 31, 2005 Revisions of previous estimates Improved recovery Extensions and discoveries Purchases...

  • Page 92
    ... Standardized Measure of Discounted Future Net Cash Flows In millions Consolidated Subsidiaries Latin Middle East/ America North Africa United States Total Other Interests (a) AT DECEMBER 31, 2008 Future cash flows Future costs Production costs and other operating expenses $ 75,267 $ 9,880...

  • Page 93
    ... taxes, interest, general and administrative and other expenses. Consolidated Subsidiaries Latin Middle East/ America (a) North Africa United States Total Other Interests (b) 2008 Oil - Average sales price ($/bbl.) Gas - Average sales price ($/Mcf) Average oil and gas production cost ($/bbl...

  • Page 94
    ... December 31, 2008, Occidental's net productive and dry -exploratory and development wells completed. United States Consolidated Subsidiaries Middle East/ Latin North Africa America Total Other Interests (a) 2008 Oil - Exploratory Development Gas - Exploratory Development Dry - Exploratory...

  • Page 95
    ... in Yemen. At December 31, 2008, Occidental was participating in 177 pressure maintenance projects in the United States, 21 in Latin America and 27 in the Middle East/North Africa. Oil and Gas Acreage The following table sets forth, as of December 31, 2008, Occidental's holdings of developed and...

  • Page 96
    ... 167 3 256 256 194 138 588 235 181 171 587 593 Latin America Crude oil (MBBL) Argentina Colombia TOTAL Natural gas (MMCF) Argentina Bolivia TOTAL Middle East/North Africa Oil and liquids (MBBL) Oman Dolphin Qatar Yemen Libya TOTAL Natural gas (MMCF) Oman Dolphin TOTAL 32 43 75 21 21 42 32 42 74...

  • Page 97
    Production per Day 2008 263 2007 2006 United States Oil and liquids (MBBL) 260 593 256 588 Natural gas (MMCF) 587 Latin America Crude oil (MBBL) Argentina Colombia TOTAL Natural gas (MMCF) Middle East/North Africa Oil and liquids (MBBL) Oman Dolphin Qatar Yemen Libya TOTAL 34 44 78 42 33...

  • Page 98
    ... and Qualifying Accounts In millions Occidental Petroleum Corporation and Subsidiaries Balance at Beginning of Period Additions Charged to Charged to Other Costs and Expenses Accounts Deductions Balance at End of Period 2008 Allowance for doubtful accounts Environmental Litigation, tax...

  • Page 99
    ...III ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Occidental has adopted a Code of Business Conduct (Code). The Code applies to the Chairman of the Board and Chief Executive Officer, President and Chief Financial Officer, Principal Accounting Officer and persons performing similar...

  • Page 100
    ... Common Stock (filed as Exhibit 4.9 to the Registration Statement on Form S-3 of Occidental, File No. 333-82246). Form of Officers' Certificate, dated October 21, 2008, establishing the terms and form of the 7% Notes due 2013 (filed as 4.4* Exhibit 4.1 to the Current Report on Form 8-K of Occidental...

  • Page 101
    ... executive officers (filed as Exhibit B to the Proxy Statement of Occidental for its May 21, 1987, Annual Meeting of Stockholders, File No. 1-9210). Occidental Petroleum Corporation Split Dollar Life Insurance Program and Related Documents (filed as Exhibit 10.2 to the Quarterly Report on Form...

  • Page 102
    ... 31, 2005, File No. 1-9210). Terms and Conditions of Performance-Based Stock Award (deferred issuance of shares) under Occidental Petroleum Corporation 2005 Long-Term Incentive Plan (January 2006 version - Chemicals) (filed as Exhibit 10.65 to the Annual Report on Form 10-K of Occidental for the...

  • Page 103
    ... 10.69 to the Annual Report on Form 10-K of Occidental for the fiscal year ended December 31, 2006, File No. 1-9210). Terms and Conditions of Performance-Based Stock Award under Occidental Petroleum Corporation 2005 Long-Term Incentive Plan (January 2007 version - Chemicals) (filed as Exhibit 10.70...

  • Page 104
    ... Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. OCCIDENTAL PETROLEUM CORPORATION /s/ RAY R. IRANI Ray R. Irani Chairman of the Board of Directors and Chief Executive Officer February 24, 2009 By: Pursuant...

  • Page 105
    ... /s/ RODOLFO SEGOVIA Rodolfo Segovia /s/ AZIZ D. SYRIANI Aziz D. Syriani /s/ ROSEMARY TOMICH Rosemary Tomich /s/ WALTER L. WEISMAN Walter L. Weisman Director February 24, 2009 Director February 24, 2009 Director February 24, 2009 Director February 24, 2009 Director February 24, 2009 91

  • Page 106
    This report was printed on recycled paper. © 2009 Occidental Petroleum Corporation 92 EXHIBITS

  • Page 107
    ... of the five years in the period ended December 31, 2008. List of subsidiaries of Occidental at December 31, 2008. 21 23.1 23.2 31.1 31.2 32.1 Independent Registered Public Accounting Firm's Consent. Expert Consent. Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002...

  • Page 108
    EXHIBIT 12 OCCIDENTAL PETROLEUM CORPORATION AND SUBSIDIARIES COMPUTATION OF TOTAL ENTERPRISE RATIOS OF EARNINGS TO FIXED CHARGES (Amounts in millions, except ratios) For the years ended December 31, 2008 2007 2006 2005 2004 Income from continuing operations Add: $ 6,839 116 $ 5,078 75 $...

  • Page 109
    ... Occidental International Oil and Gas Ltd. Occidental International Services, Inc. Occidental Joslyn GP 1 Co. Occidental Joslyn GP 2 Co. Occidental Latin America Holdings, Inc. Occidental Libya Oil & Gas B.V. Occidental Mukhaizna, LLC Occidental of Elk Hills, Inc. Occidental of Oman, Inc. Occidental...

  • Page 110
    ... Occidental Petroleum of Qatar Ltd. Occidental Power Services, Inc. Occidental PVC, LLC Occidental Qatar Energy Company LLC Occidental Quimica do Brasil Ltda. Occidental Resources Company Occidental Transportation Holding Corporation Occidental Yemen Ltd. OOG Partner Inc. OOOI Chemical International...

  • Page 111
    ... Name PXP CV Pipeline LLC Repsol Occidental Corporation Stockdale Oil and Gas, Inc. Vintage Petroleum Boliviana, Ltd. Vintage Production California LLC Vintage Petroleum International, Inc. Vintage Petroleum International Holdings, Inc. Vintage Petroleum South America Holdings, Inc. Jurisdiction of...

  • Page 112
    ... eeriod ended December 31, 2008 and the related financial statement schedule, and the effectiveness of internal control over financial reeorting as of December 31, 2008, which reeorts aeeear in the December 31, 2008 annual reeort on Form 10-K of Occidental Petroleum Coreoration. Our reeort on...

  • Page 113
    ... EXPERT CONSENT To the Board of Directors Occidental Petroleum Corporation: We consent to the inclusion in the Occidental Petroleum Corporation (Occidental) Form 10-K for the year ended December 31, 2008, and the incorporation by reference in Occidental's registration statements (Nos. 333-123324...

  • Page 114
    ...; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 24, 2009 /s/ RAY R. IRANI Ray R. Irani Chairman of the Board of Directors and Chief Executive Officer

  • Page 115
    ... and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 24, 2009 /s/ STEPHEN I. CHAZEN Stephen I. Chazen President and Chief...

  • Page 116
    ... with the Annual Report on Form 10-K of Occidental Petroleum Corporation (the "Company") for the fiscal period ended December 31, 2008, as filed with the Securities and Exchange Commission on February 24, 2009 (the "Report"), Ray R. Irani, as Chief Executive Officer of the Company, and Stephen...