Occidental Petroleum Corporation

Natural and catastrophic events · Natural disasters and extreme weather

Occidental is vulnerable to risks associated with offshore operations that could negatively impact its operations and financial results. Certain Occidental subsidiaries conduct offshore operations primarily in the Gulf of America and their operations are vulnerable to risks including hurricanes and other adverse weather conditions, geological complexities and water depths, limited number of partners available, oilfield service costs and availability, and compliance with HSE and other laws and regulations.

Social and demographic · Stakeholder activism and pressure

There have been efforts in the investment community, including investment advisers, financial institutions and certain sovereign wealth, pension and endowment funds, as well as political actors and other stakeholders, promoting divestment of fossil fuel equities, reducing access to capital markets and pressuring lenders to limit funding or increase the cost of lending to companies engaged in the extraction of fossil fuel reserves.

Natural and catastrophic events · Climate change and environmental impact

Continuing political, social and industry attention to climate change has resulted in both existing and pending international agreements and national, regional and local legislation and regulatory programs to report on and reduce GHG emissions. Collectively, the final regulations and other recent international, federal, state and local government actions relating to GHG and other air emissions are expected to require Occidental to incur increased operating and maintenance costs and could affect permitting and other regulatory approvals and prevent Occidental from conducting oil and gas development activities in certain areas.

Geopolitical and trade · Political instability and government changes

Occidental's non-U.S. operations accounted for approximately 16% of its consolidated revenue in 2024. Operations in non-U.S. countries with varying degrees of political, legal and economic stability expose Occidental to a wide range of developments that could result in contractual, legal or regulatory changes. Instability and unforeseen changes in any of the markets in which Occidental operates could result in business disruptions or operational challenges.

Strategic execution · Merger acquisition and divestiture risks

The success of acquisitions, divestitures and other transactions will depend, in part, on Occidental's ability to successfully complete and realize the anticipated benefits of such transactions. Difficulties in integrating businesses and/or employees may result in the failure to realize anticipated results, benefits, and synergies in the expected timeframes, in operational challenges, and in the diversion of management's attention from ongoing business concerns.

Market position and competition · Competitive pressure and market share loss

The exploration and production of oil, NGL and natural gas is a highly competitive business. Occidental has many competitors, some of which are larger and better funded, may be willing to accept greater risks, have greater access to capital, have substantially larger staffs, or have special competencies. Occidental's failure to acquire properties, potentially grow production, replace reserves and attract and retain qualified personnel could have a material adverse effect on its cash flows and results of operations.

Strategic execution · Joint venture and partnership risks

One of Occidental's subsidiaries acts as the general partner of WES, a publicly traded master limited partnership. Its general partner interest in WES may increase the possibility that it could be subject to claims of breach of duties owed to WES, including claims of conflict of interest. Any such claims could increase Occidental's costs and any liability resulting from such claims could have a material adverse effect on Occidental's financial condition, operating results or cash flows.

Reputation and brand · Corporate social responsibility

Occidental's efforts to research, establish, accomplish and accurately report on its emissions reductions, targets and strategies expose it to numerous operational, reputational, financial, legal, technological, implementation and other risks. Historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing and definitions, assumptions, data sources and estimates or measurements that are subject to change in the future.

Supply chain and procurement · Raw material availability and cost volatility

Prices for oil, NGL and natural gas fluctuate widely. Historically, the markets for oil, NGL and natural gas have been volatile and may continue to be volatile in the future. If the prices of oil, NGL or natural gas continue to be volatile or decline, Occidental's operations, financial condition, cash flows, level of expenditures and the quantity of estimated proved reserves that may be attributed to its properties may be materially and adversely affected.

Capital structure and performance · Credit rating and cost of capital

Occidental's level of indebtedness, including indebtedness incurred in connection with the CrownRock Acquisition, could increase its vulnerability to adverse changes in general economic and industry conditions. Any downgrade in Occidental's credit rating or announcement that its credit rating is under review for possible downgrade could increase the cost associated with any additional indebtedness Occidental incurs or limit or impair Occidental's access to additional indebtedness.

Market and investment · Asset valuation and impairment

Occidental has recorded impairments of its proved and unproved oil and gas properties resulting from prolonged declines in oil and gas prices, changes in development plans or operating costs and negative well results and may record such impairments in the future. If there is an adverse downturn of the macroeconomic conditions and if such downturn is expected to or does persist for a prolonged period of time, Occidental's assets may be subject to further testing for impairment, which could result in additional non-cash asset impairments.

Industry regulation · Safety and environmental regulations

An escalating 'methane waste emissions charge' under the IRA, for which the EPA issued final regulations in November 2024 to collect on reported upstream and midstream methane emissions from oil and gas facilities above specified intensity thresholds, starting at $900 per metric ton of methane emitted in 2024 above applicable thresholds, and increasing to $1,200 per ton in 2025, and $1,500 per ton in 2026 and thereafter.

Tax and financial reporting · Tax compliance and changes in tax law

In 2022, the IRA imposed new or reinstated corporate taxes and fees that could have an adverse effect on Occidental's tax liability. The IRA enacted a new corporate alternative minimum tax (CAMT) that started in tax year 2023 and imposed a 15% minimum tax on the adjusted financial statement income of corporations with average AFSI exceeding $1 billion for three preceding consecutive tax years.