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Acquisitions and Dispositions

Oxy's strong financial performance is due in large part to strategic transactions that have significantly transformed the company and established it as a major player in the industry. We continually manage our asset portfolio with an eye toward adding value through new acquisitions or identifying candidates for potential divestment.

Our highly stable, low-risk projects in the U.S., and development opportunities in the Middle East, North Africa and Latin America yield strong production growth and high returns. Transactions must meet our stringent investment criteria: projected return targets of 15 percent or more for domestic projects and 20 percent or more for international projects. Our capital allocation philosophy is driven by the goal of creating long-term value for stockholders.

Recent Transactions

2007

• Purchase of PXP Working Interests in U.S.: In the fourth quarter, we announced the purchase of 50 percent of Plains Exploration & Production's (PXP) working interests in oil and gas properties in the Permian Basin as well as the Piceance Basin of Colorado. The Piceance assets complement our existing Colorado holdings, while the additional Permian assets expand our industry-leading position there. Together, these acquisitions are expected to increase our net proved reserves by 92 million BOE, a figure we believe will substantially increase over time.
• Extended Contracts in Libya: In November, we announced new agreements with the Libya National Oil Corporation (NOC) for major field redevelopment and exploration in the prolific Sirte Basin. The new 30-year agreements further expand our industry-leading position in Libya, where Oxy is the largest net holder of oil and gas acreage. We expect to develop with our partners gross oil reserves of approximately 2.5 million barrels for an anticipated overall capital investment of $5 billion over the next five years, of which Oxy's portion will be approximately $1.9 billion. As a result, oil production is projected to triple from the current 100,000 barrels per day to 300,000 barrels per day.
• Purchase of Anadarko Offshore Qatar Interest: In October, Oxy acquired Anadarko Petroleum Corporation's 92.5 percent interest in an exploration- and production-sharing agreement covering Blocks 12 and 13 located in offshore Qatar.
• Exploration Blocks in Bahrain: In the fourth quarter, Oxy was awarded two offshore exploration blocks in Bahrain, adjacent to major producing fields in Qatar, for which we have launched the study phase and technical assessment.
• BP Asset Exchange: In June, Oxy completed two transactions with BP that complement our existing Permian operations. In the first transaction, Oxy purchased BP's West Texas pipeline system, which has the capacity to transport approximately 191,000 barrels of crude oil per day, and sold our non-core oil and gas interests in Pakistan to BP. In the second transaction, an asset exchange with BP, Oxy received additional Permian Basin oil and gas interests in exchange for our one-third interest in the BP-operated Horn Mountain property in the Gulf of Mexico.
• Sale of Russia Joint Venture: In January, Oxy sold its 50-percent equity investment in Russia for approximately $485 million and recorded an after-tax gain of approximately $412 million.

2006

• Acquisition of PXP Properties in U.S.: In September, Oxy acquired oil and gas assets from PXP. The principal properties acquired are adjacent to Oxy's existing operations in California and the Permian Basin in West Texas.
• Acquisition of Vintage Petroleum: In January, Oxy completed the merger of Vintage Petroleum, Inc. into a wholly owned subsidiary. As a result, Oxy acquired assets in Argentina, California, Yemen, Bolivia and the Permian Basin.

2005

• Libya Re-Entry: In August, Oxy signed an agreement with the Libya NOC, allowing it to re-enter Libya and participate in exploration and production operations in the Sirte Basin, which it left in 1986 pursuant to United States law.
• Oman - Mukhaizna Oil Field: In July, Oxy signed a new production-sharing contract (PSC) for the Mukhaizna oil field with the Government of the Sultanate of Oman. Under the terms of the PSC, Oxy took over field operations for a period of 30 years.
• Acquisition of Vulcan Chemical Assets: In June, Oxy completed the purchase of three chlor-alkali chemical manufacturing facilities from Vulcan Chemical with producing facilities in Wichita, KS, and Geismar, LA.