On Tuesday, Occidental Petroleum’s CEO Vicky Hollub said that the company would focus more on diminishing their debts before moving to strengthen oil production. She also expects oil and gas output in the second half of 2020 to slump.
Regarding the debt, Occidental has been struggling to reduce the USD38 billion due to the purchase of rival Anadarko Petroleum in 2019, mostly by selling its assets. The company is still put on sale its assets in Ghana and Wyoming. The sale of a land and minerals package in Wyoming is targeted to be closed this year.
However, the company’s assets in Algeria failed to be sold as authorities had blocked Total SA’s acquisition. Hollub now calls Algeria as Occidental’s core asset.
In 2021, Occidental is due to pay around USD4.5 billion and reported long-term debt of USD36 billion on June 30.
The company’s oil and gas output in the July-December period is estimated to dip with a 1.2 million bpd of oil and gas at the end of the year, down by 200,000 bpd year-on-year.
Analyst Vincent Lovaglio of Mizuho Securities USA commented that the outlook in production does not signal confidence in capital efficiency nor in the ability to meet sustaining capital requirements for 2021.
Occidental did not disclose its spending plans for next year but said it would have to spend about USD2.9 billion to keep production flat, based on oil prices at USD40/barrel.
