Performance

Performance

Occidental's reporting focuses on the policies, objectives, performance and activities of the company. To improve transparency and provide relevant information to our stakeholders, we have elected to use our corporate website as the primary medium for Social Responsibility-related reporting. This website provides updates to our 2016 year-end performance and information on activities implemented and achievements in 2016 and 2017. An Annual Performance Summary Table, linked in the left margin, highlights our Environmental, Health, Safety and Social performance metrics to the year-end 2016 (unless otherwise noted). Occidental also reports annually to CDP on its climate change and water programs. Our most recent submissions to the CDP are linked in the left margin.

More information and examples of our performance can be found throughout the Social Responsibility sections in this corporate website.

Occidental's reporting process is informed by IPIECA's Oil and Gas Industry Guidance on Voluntary Sustainability Reporting (third edition, 2015 release) and is routinely updated and refined based on active stakeholder and investor engagement. In addition to the Performance Summary Table highlights, we achieved progress on the following key topics that surfaced during the 2016-17 timeframe:

  • Governance of political advocacy

  • Greenhouse gas (GHG) emissions, including methane management

  • Climate-related risks and opportunities

  • Employee engagement

  • Transparency/better communications and disclosure on what matters most to Occidental's stakeholders

  Read more

Content Index

The Content Index refers to the IPIECA-API-IOGP sector-specific performance issues and indicators most relevant to Occidental and our community-level stakeholders. The Content Index also cross-references the indicators from the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (G4) and the United Nations Sustainable Development Goals (SDGs) most aligned with our business operations and our ability to help achieve the SDGs.


IPIECA Issue IPIECA Indicator GRI G4 Indicator SDG
Climate Change and Energy E1: Greenhouse gas emissions EN15, EN16, EN18, EN19 SDG7
E2: Energy use EN3, EN5
E3: Alternative Energy Sources EC2, OG2 SDG13
E4: Flared gas EN15, OG6
Biodiversity and Ecosystem Services E5: Biodiversity and ecosystem services EN11, EN12, EN13, OG4 SDG15
Water E6: Fresh water EN8, EN10, EN22 SDG6
E7: Discharges to water EN1, EN8, EN10, EN22, EN27, OG5, OG7
Local Environmental Impact E8: Other air emissions EN20, EN21 SDG13
E9: Spills to the environment EN24
IPIECA Issue IPIECA Indicator GRI Indicator SDG
Workforce Protection HS1: Workforce protection LA5 SDG3
HS2: Workforce health LA5
HS3: Occupational injury and illness incidents LA6
Product Health, Safety and Environmental Risks HS4: Product stewardship EN27, PR3 SDG12
Process Safety and Asset Integrity HS5: Process Safety OG13
IPIECA Issue IPIECA Indicator GRI Indicator SDG
Community and Society SE1: Local community impacts and engagement EC8, SO1, SO2, SO9, SO11 SDG16
SE2: Indigenous peoples HR8, OG9
SE4: Social investment EC7, EC8
Local Content SE5: Local content practices EC9 SDG8
SE6: Local hiring practices and performance EC8
SE7: Local procurement and supplier development EC8, EC9, EN32, EN33, LA14, LA15, HR1, SO9, SO10
Human Rights SE8: Human rights due diligence LA15, LA16, HR1, HR2, HR3, HR5, HR8, HR9, HR12, OG9, OG10 SDG16
SE9: Human rights and suppliers LA14, LA15, HR1, HR5, HR6, HR10, HR11
SE10: Security and human rights LA14, HR2, HR5, HR7, OG10
Business and Transparency SE11: Preventing corruption SO3, SO4, SO5, SO7 SDG16
SE12: Preventing corruption involving business partners SO3, SO4, SO5
SE13: Transparency of payments to host governments EC1
SE14: Public advocacy and lobbying SO6
Labor Practices SE15: Workforce diversity and inclusion LA1, LA12 SDG5
SE16: Workforce engagement HR4 SDG8
SE17: Workforce training and development LA9, LA10
SE18: Non-retaliation and grievance system LA16, SO10, SO11 SDG16




Occidental is governed by a Board of Directors (Board), which, among other duties, sets the company's policies, objectives and overall direction of the business and monitors and evaluates the senior management team. The Board of Directors is committed to strong corporate governance policies and practices and continually reviews evolving best practices in governance and seeks input from Occidental's stockholders. The performance of individual directors, committees and the full Board is evaluated annually. The annual assessment focuses on such factors as whether committees are functioning effectively and whether the Board has the necessary diversity of skills, backgrounds and experience to meet the company's current and future needs.

Occidental's corporate governance highlights include:

  • an independent Chairman of the Board;

  • annual elections of the entire Board;

  • majority voting for directors and, in uncontested elections, mandatory resignation if a majority vote is not received;

  • stockholders right to proxy access, the ability to act by written consent and to call special meetings;

  • no poison pill or similar plan; and,

  • a confidential voting policy.

Occidental's stockholders elected eleven directors to the Board, ten of whom are independent directors.

Board of Directors

BOD
Female Directors

7 Years Experience

Occidental demonstrates its commitment to respecting and upholding human rights through continued integration of the Company's Human Rights Policy into its global business practices. Occidental's actions to fulfill this commitment included:

  • educating and promoting Occidental's Business Code of Conduct and its Human Rights Policy to employees, contractors and other business partners;

  • participating in meetings and working groups to advance respect for human rights; and

  • engaging host governments, non-governmental organizations (NGOs), communities, and civil society groups.


At Occidental, we actively promote diversity, inclusion and equal employment opportunity throughout the company. Our diverse workforce contributes to our ability to work effectively across multicultural environments. Internationally, we team with nationwide, regional and local governments to transfer skills and technology to workers in the regions where we operate, and to recruit and train local citizens for jobs at all levels of the company.

At the close of 2016, women represented 17.2 percent of Occidental's U.S. management and senior leadership positions. Minorities represented 19.3 percent of our U.S. management and senior leadership positions.

Workforce Diversity







  • In 2016, we achieved our highest-rated employee safety performance, based on the U.S. Department of Labor's Injury and Illness Incidence Rate (IIR). Occidental's 2016 worldwide employee IIR of 0.24, which included no occupational fatalities, is less than one-tenth of the current U.S. private industry average IIR of 3.2 published by the U.S. Bureau of Labor Statistics. Our employee IIR has been less than 1.0 for 20 consecutive years.

  • Occidental Oman achieved a combined employee and contractor injury and illness rate (IIR) of 0.10 while working over 42 million man-hours, which is a record performance since Occidental started operations in Oman over 30 years ago.

  • Occidental Qatar's combined employee and contractor Injury and Illness Incident Rate (IIR) of 0.00, is an all-time low. Occidental Qatar contractors worked 3 million man-hours in 2016 -- and have since achieved more than 5 million man-hours -- without experiencing a single recordable incident.

  • Occidental Colombia’s combined employee and contractor Injury and Illness Incident Rate (IIR) of 0.04 is based on more than 4.8 million man-hours worked in 2016.

  • OxyChem's 2016 worldwide employee Injury and Illness Incidence Rate (IIR) of 0.58 was 34 percent better than the average 2015 employee IIR of 0.88 for its midsize company peers in the American Chemistry Council.

The overall safety performance across Occidental's operations in 2016 was excellent, and the company is committed to continuously improving workplace and contractor safety and preventing any incidents. Occidental's business units actively encourage contractors to improve their Health, Environment and Safety (HES) programs, both in periodic safety meetings where Occidental management discusses HES practices with contractors, and in individual service quality meetings. Potential areas of improvement Occidental pursues include increasing supervision, job safety analysis, equipment inspections and emergency preparedness, particularly in drilling and workover activities. We expect both employees and contractors to uphold Occidental's commitment to health and safety, and the company's Safety Management System practices.

Occidental strives to achieve exemplary environmental performance. This section describes environmental stewardship topics and performance indicators most relevant to Occidental stakeholders such as biodiversity and habitat conservation, climate change, energy use and greenhouse gas emissions and water management.

Environmental Remediation

Occidental maintains a wholly owned subsidiary, Glenn Springs Holdings, Inc., to uphold Occidental's commitment to protect health, safety and the environment at former operating locations and historical environmental sites of Occidental entities. The scientists, engineers and project managers at Glenn Springs employ advanced, environmentally sound methods and innovative site restoration and management solutions in cooperation with interested stakeholders. Through proactive engagement with relevant agencies and with the development and application of common process initiatives and tools, Glenn Springs is able to effectively provide consistent results at Occidental sites currently or previously used for industrial, mining, or commercial activities. Discussion of Occidental's remediation spending can be found in our Annual Report on Form 10-K.

Notable remediation efforts include the Lower North Potato Creek at the Copper Basin Project in Tennessee. Governor Bill Haslam announced that Glenn Springs earned the Tennessee Department of Environment and Conservation's 2015 award for exceptional environmental stewardship of a natural heritage site, for successfully restoring the Lower North Potato Creek watershed in eastern Tennessee to its natural habitat.

"I am extremely proud of the efforts of our employees, contractors and vendors, working together with our State and Federal partners to restore the Lower North Potato Creek," said Glenn Springs President Mike Anderson. "The Governor's Environmental Stewardship Award is recognition of the team's innovative approach to reviving this important ecosystem in eastern Tennessee."

Eureka Roast Yard 1
Eureka Roast Yard 2
Burra Creek 1
Burra Creek 2

Before and After Photos of Burra Creek: A tributary of North Potato Creek was reconstructed by removing contaminated materials, replacing with healthy soils and constructing natural flow control and habitat enhancements.

Biodiversity and Habitat Conservation

Occidental actively promotes habitat preservation and biodiversity. Minimizing the disturbance of wildlife habitat is a key tenet of our conservation efforts. We believe that using existing oil and natural gas production infrastructure -- and avoiding, in many cases, the need to develop greenfield land, build new roads, pipelines and storage and processing facilities -- to recover additional oil and natural gas from existing fields provides significant life-cycle environmental benefits. Field development using directional drilling and locating more than one well from a single drill pad reduces the surface area needed for oil and gas production. In mature fields, we often apply enhanced oil recovery (EOR) technologies and drilling techniques. These approaches minimize our operational footprint and minimize habitats exposed to disturbance.

Occidental works with national, regional and local government agencies, university researchers and nonprofit organizations to support native species in certain operating locations, implement adaptive management practices to minimize habitat disruption and to preserve and restore habitat for those species.

  • The Pecos Watershed Initiative, a proactive approach to the Endangered Species Act, involves landscape-based management of multiple species and their habitat within the Pecos River Watershed, in Texas. The Initiative is a collaborative endeavor between industry and local, state and federal agencies to improve habitat and species health while allowing for responsible economic development.

  • In Colombia, Occidental Colombia and Ecopetrol have implemented a reforestation and habitat conservation program with the Barrancabermeja San Silvestre Wetland Integrated Management Regional District, a regional protected area. This program aims to recover degraded areas and restore contiguous areas previously fragmented by cattle farming, and has established a productive tree plantation served by the local community. The plantation has around 108,000 trees, including some endangered species. Also, around 700 fruit trees have been planted with the objective of attracting protected fauna, impacted by hunting and the loss of habitat.

Occidental amplifies its commitment to biodiversity through an active membership in and support of nonprofit conservation organizations, including the Wildlife Habitat Council (WHC) and The Nature Conservancy. Occidental's longstanding participation in the WHC has helped us to enhance habitats across the United States. WHC's Corporate Wildlife Habitat Certification/International Accreditation Program recognizes commendable wildlife habitat management and environmental education programs at company-owned properties. We currently manage four sites certified by the WHC under the Corporate Lands for Learning and Wildlife at Work programs. Since 2012, Glenn Springs has earned four national habitat awards from the WHC, National Wild Turkey Federation, Pheasants Forever and Ducks Unlimited.

At the site of a former chemical facility in Montague, Michigan, Glenn Springs implemented a comprehensive wildlife enhancement plan benefiting several species of mammals, birds and insects. In 2015, the site received the Wings over Wetlands Award from Ducks Unlimited in recognition of its accomplishments. The Montague conservation plan includes:

  • Creation of a long-term forest management plan

  • Creation of 35 acres of wetlands and aquatic habitat

  • Creation of two timber ponds

  • Planting and maintaining over 80 acres of native prairie grasses

  • Establishment of nearly 30 acres of wildlife food plots

Energy Utilization and Energy Efficiency

Occidental uses energy to produce oil and gas and manufacture chemicals to generate steam and electricity, and to conduct other business activities. Our longstanding policy is to seek continuous improvement in resource recovery and energy efficiency. Occidental reports overall energy use net of the amount of energy consumed to generate electricity exported to the grid and adjusted by Occidental's equity share in the facilities we operate. Occidental has been successful in controlling energy consumption, achieving a 10 percent reduction in energy intensity per pound of production over the 2012-2016 period.

In its oil and gas operations, Occidental's energy consumption per barrel of oil equivalent (BOE) has improved by over three percent since 2012. Occidental applies several strategies to increase energy efficiency and reduce air emissions, even while expanding our production from mature fields that require more energy per BOE. Generally, however, the energy demand per barrel increases over time, as more intensive production methods, such as water and steam flooding and carbon dioxide enhanced oil recovery (CO2-EOR), are used to recover oil and natural gas from mature fields.

OxyChem's energy consumption per pound of product improved over the 2012-2016 period. In 2016, guided by the principles of the American Chemistry Council (ACC) Responsible Care® Energy Efficiency program, seven OxyChem plants successfully implemented innovative energy efficiency initiatives through technical innovations, creative projects or novel processes. Combined, energy savings resulting from these projects in 2016 equated to 154,000 million British Thermal Units (MMBTU), which contributed to a reduction of 9,500 tons of greenhouse gas emissions.

In February 2017, OxyChem announced the start-up of a 1.2 billion pound-per-year capacity ethylene cracker at its plant in Ingleside, Texas, one of the largest new ethylene crackers along the Gulf Coast. In addition to the energy efficiency features such as the use of hydrogen-rich vent gas as fuel, recovery of waste heat on the process and flue gas outlet of the cracking furnaces, a unique aspect of this project is the use of two thermal oxidizers equipped with waste heat boilers to combust low pressure discharges of vent gases from process equipment and storage vessels. These thermal oxidizers are designed to provide high emissions control and generate steam from the waste heat. OxyChem estimates that the approximately 970,000 tons per year of total CO2 is avoided due to its highly efficient design.

OxyChem began constructing a plant at its Geismar, Louisiana facility to produce a new raw material to be used in making next-generation, climate-friendly refrigerants. Based on patented research and development by OxyChem, the new product would enable the efficient production of next-generation refrigerants, which have low global-warming potential and ozone depletion potential. The refrigerant is approved by the U.S. EPA and meets the European Union regulatory requirements for automobile air conditioning systems.

Cogeneration

Occidental's cogeneration facilities are highly efficient natural gas fired cogeneration power plants that co-produce electricity and steam for adjacent plants, while also providing excess electricity into local markets. Cogeneration, or combined heat and power (CHP), significantly increases electrical power generation efficiency over traditional methods while reducing carbon dioxide (CO2) emissions by more than 50 percent. Cogeneration is more than just an energy-efficient method of generating electricity and thermal energy. It has the potential to deliver lower overall system costs, stronger critical infrastructure, and improved grid reliability.

The greenhouse gas (GHG) emission-reduction benefits from Occidental's natural gas-fired CHP facilities are substantial. Based on typical assumptions, Occidental's CHP facilities at full utilization are estimated to reduce GHG emissions by 5 million metric tons per year compared to the case where equivalent power is supplied from the electrical grid. The steam produced by the combined cycle facilities reduces the nearby manufacturing facilities' CO2 emission of about 500,000 tons annually, compared to steam supplied by typically configured boilers.

OxyChem has made improvements to its CHP systems, saving more than 306,000 MMBtu/year and approximately 18,500 tons of CO2 equivalents reductions per year since implementation.

OxyChem has partnered with Canada's Independent Electricity System Operator (IESO) to build an energy saving project at our Ontario-based PVC Plant. A new gas turbine and heat recovery steam generator will generate efficient power and steam for the plant's processes. This updated technology will increase the macro-efficiency of the plant by about 25 percent.

Demand Response

In the Texas market, Occidental is one of the leading providers of Responsive Reserve Service, which helps improve reliability of the electric grid. By offering to reduce power consumption at specific Occidental locations, when called upon by the grid operator, Occidental provides the Texas electrical grid with a demand response tool which helps maintain grid reliability for industrial, commercial and residential consumers.

Renewable Energy Generation

Occidental routinely looks for alternatives to help secure low cost, reliable energy for its power needs. Occidental devotes capital to install energy-efficient electrical equipment and distribution systems to provide electric power for operations that formerly required natural gas or diesel engines. We are exploring the possibility of installing renewable energy systems, such as wind and solar generation, to provide electricity for our chemical and oil and natural gas operations.

Climate Change

Globally, there is an ongoing effort to assess and quantify the effects of climate change and the human influences on climate. Occidental recognizes the importance of economic and policy assessments taking place in many countries and among international organizations related to climate change, including the agreement reached in Paris in 2016 to set a goal of limiting global warming to less than 2 degrees Celsius (°C), compared to pre-industrial levels.

Occidental is committed to be part of the climate solution and continues to develop and implement practical innovations to preserve the environment and reduce our emissions. Our business decision-making process integrates climate change-related issues with other business priorities to help us effectively manage greenhouse gas (GHG) emissions, the social and economic impacts of Occidental's energy use and further the company's commitment to be an efficient, low-cost producer of oil and gas and commodity chemicals. Climate change risks and opportunities are considered in our business decisions through a team of managers and employees, with oversight from the Board of Directors' Environmental, Health and Safety Committee.

Scenario planning, which factors intrinsic carbon pricing and energy intensity assumptions, enables Occidental's management team to understand a range of risk around commodity prices, expected returns on capital, and the risk and opportunity associated with various GHG abatement and CO2 utilization options. This includes the consideration of international accords, treaties, legislation, regulation and government policy initiatives that may affect the raw materials, other inputs and costs to produce our products, and the demand for and the restrictions on the use of our products. The process of risk evaluation also includes potential physical and social impacts relating to severe weather events and disruption of operations due to proximity to flood-prone and water-stressed areas. Other aspects that influence risk factors and assumptions include potential commercial and reputational risks; the actions of governments, such as actual or proposed international, national, regional and state GHG control measures; scenarios developed for the International Energy Agency (IEA) Energy Outlooks and; the recommendations of quasi-government agencies such as the Financial Stability Board's Task Force on Climate-related Financial Disclosures (FSB TCFD).

Key elements of Occidental's climate-related risks and opportunities assessment include:

  • Considering a range of possible future carbon-constraint scenarios, including the IEA 450 Scenario, which articulates an energy pathway consistent with the goal of limiting the global warming to no more than 2`C

  • Developing strategic alternatives to maximize shareholder value in a future with uncertain carbon constraints and defined carbon budgets

  • Testing strategies under various scenarios

  • Developing options for delivering sustainable shareholder value under scenarios with stringent regulation of CO2 emissions and potentially changing demand for oil and gas

Outcomes of this process to integrate climate change considerations into our business strategy help inform our active engagement with institutional stockholders, state and national-level regulators, environmental groups and other public stakeholders addressing climate risks. We work with governments, companies, peer companies in our industry sector and civil society organizations to facilitate the development of viable global policies and regulatory frameworks. The engagement with these stakeholders has initiated a constructive dialogue. Occidental participates in domestic and international industry initiatives, such as IPIECA and the Global Carbon Capture and Storage Institute that focus on GHG mitigation solutions and global climate change-related risks and opportunities.

Occidental’s newly released report, Climate-Related Risks and Opportunities: Positioning for a Lower-Carbon Economy highlights our efforts to address climate-related risks and opportunities in our business. The report begins with a letter from our President and CEO, followed by a substantive executive summary. We then take a deeper look at carbon dioxide enhanced oil recovery (CO2 EOR) and carbon capture, utilization and sequestration (CCUS), a technological and operations-oriented approach that can be used to reduce greenhouse gas emissions while growing our business. For those interested in greater detail, we include an in-depth review that is organized in the four-element framework recommended by the Task Force on Climate-related Financial Disclosures (TCFD), which covers governance, risk, strategy and metrics and targets.

Regulation of Greenhouse Gases (GHGs)

The U.S. federal government has adopted legislation, regulations and policies that seek to control or reduce the production, use or emissions of GHGs, to control or reduce the production or consumption of fossil fuels, and to increase the use of renewable or alternative energy sources. The U.S. Environmental Protection Agency (EPA) has a program that requires reporting of GHGs from certain facilities and has regulations covering certain GHG emissions.

Governmental efforts to mitigate or adapt to climate change - including the Paris Agreement - while maintaining reliable, cost-effective energy and fuel supplies for society present both challenges and opportunities. In accordance with the rules and regulations of the Securities and Exchange Commission (SEC), Occidental provides disclosure of the risks posed by climate change and climate change regulations on its business and operations in its Annual Report on Form 10-K. Occidental publishes information on our approach to reserves estimation and capital planning and allocation. This includes economic feasibility at the prevailing commodity prices; changes in proved reserves, including downward revisions of previous estimates due to changes in economic conditions; and provides an Industry Outlook section that identifies factors influencing the price of Occidental's products. The process includes consideration of the actions of governments, such as actual or proposed international, national and state GHG controls and fiscal measures.

Any approach to regulating GHG emissions should be holistic. Occidental does not support efforts that regulate some sectors while omitting others. Local programs that focus on a particular state or region have inherent limits in their ability to affect any human-induced climate change. Furthermore, such approaches may conflict with one another and are inherently cost-inefficient. Whether to impose mandatory GHG emission controls in the U.S. is a decision that should be legislated by U.S. Congress based on informed science, after due consideration of the social and economic costs and consequences of a particular course of action.

Greenhouse Gas (GHG) Emissions Management

Occidental voluntarily reports estimated greenhouse gas (GHG) emissions using several protocols. For our worldwide operations, Occidental uses the Greenhouse Gas Protocol of the World Business Council for Sustainable Development and the World Resources Institute, supplemented by business-specific protocols (API-IPIECA). We have reported on GHG emissions to the CDP (formerly known as Carbon Disclosure Project), since its inception in 2003. Carbon dioxide (CO2) is the predominant component of Occidental's GHG emissions, while the remainder is primarily methane (CH4).

In 2016, Occidental's estimated global direct and indirect GHG emissions on an equity-share basis increased by approximately seven percent, net of the disposition of certain oil and gas assets and included the additional source emissions categories resultant from the updated U.S. EPA GHG reporting requirements. On an emissions intensity basis, for the period 2011-2016, Occidental's global emissions per barrel of oil equivalent declined from .074 to .072, a 7.5% decrease.

Estimated GHG Emissions, Direct and Indirect
(in million metric tons equivalent)

GHG

Methane and Flaring

Occidental's ongoing efforts to capture methane emissions under the U.S. Environmental Protection Agency's (EPA) voluntary Natural Gas STAR Program have helped to reduce GHG emissions from our oil and gas operations. Occidental has implemented a broad spectrum of projects that reduced cumulative estimated methane emissions by more than 17.2 billion cubic feet from 1990 through year end 2016. This corresponds to almost 8 million metric tons of CO2 equivalents, which, according to EPA emission factors, is the same as the emissions from 2.5 coal-fired power plants operating for one year.

Occidental strives to achieve 100 percent reduction of all routine flaring of natural gas. Methane, the major component of natural gas, is a clean-burning fossil fuel and has 40-percent lower greenhouse gas emissions relative to coal. In upstream oil and gas operations, gas streams are flared for safety reasons when gas processing plants have planned shutdowns or during turnarounds, enabling inspections, repairs and maintenance activities that cannot occur during operation to be performed safely.

Occidental has developed business-specific plans to minimize gas flaring. Historically, Occidental's oil production operations in the Arabian Gulf offshore in Qatar were the largest source of gas flaring in the company's operations.

  • With the active support of our partner, Qatar Petroleum, Occidental Qatar has successfully reduced flaring emissions by more than 98 percent since 2005 and continues to reduce flaring in Qatar. These efforts include capturing a substantial portion of the produced gas for treatment and use by Qatar Petroleum as a feedstock or fuel, reinjecting it for enhanced oil recovery and using it to generate electricity for Occidental's Qatar's operations.

  • In Oman, Occidental has worked with the national oil company to implement projects that have reduced natural gas flaring and redirected 30 billion cubic feet of methane to productive end uses.

  • In its U.S. oil and gas operations, Occidental has achieved a 30 percent reduction in (CO2) emissions from natural gas flaring (primarily the result of non-routine operations, maintenance and weather related upsets) over the period of 2012-2016.

Other Air Emissions Management

Occidental has an ongoing effort to maintain and improve the reliability of the equipment and facilities used in its oil and gas activities. Occidental's oil and natural gas, chemical and midstream operations generate air emissions including sulfur oxides (SOX), nitrogen oxides (NOX), volatile organic compounds (VOCs) and carbon monoxide (CO), among other substances. These air emissions are generated from boilers, heaters, engines, flares, compressors and other process sources.

Occidental devotes significant resources to capture emissions of methane and other organic compounds, both in design and construction of new facilities and in retrofitting existing facilities. Occidental employs advanced technologies and leak detection and repair (LDAR) processes to contribute to the decline in methane and to monitor and control fugitive emissions of VOCs and other air pollutants. This reduction is the result of investments in gas process plant capacity, enhanced control systems and upgraded gas handing infrastructure. Among such efforts are:

  • Adopting lower emission thresholds to eliminate leaks and to repair connections (e.g., valves, flanges, pump seals).

  • Adopting "green completion" practices to capture gas at the wellhead during well completion and prevent its release to the atmosphere.

  • Replacing diesel generators and engines with electric drives, where feasible.

  • Installing air supply systems to control instruments, rather than using natural gas controls and instruments.

  • Installing Vapor Recovery Units (VRUs) to capture and recover gas from certain equipment, rather than venting to atmosphere.

  • Adopting better control devices (e.g., low-bleed or no-bleed pneumatic valves) to reduce methane emissions.

  • Adopting advanced monitoring systems to help identify and eliminate sources of fugitive emissions.

Infrared (IR) cameras use the infrared spectrum to visually identify possible emissions leaks. Equipment exhibiting possible leaks identified by IR cameras are further inspected and components are repaired or replaced, as appropriate. The IR camera approach is being used in Occidental's oil and gas segment to monitor fugitive emissions on equipment and components such as pneumatic valves, plunger lift systems, storage tanks, compressors, glycol dehydrators and similar components, especially where the equipment or components are geographically dispersed or difficult to access. Occidental has a comprehensive LDAR program for field facilities that includes the use of FLIR cameras and over 1,000 field surveys were conducted in 2016. Occidental follows all state and federal regulatory requirements for leak detection and repair and we continuously explore options for conducting enhanced surveys under voluntary programs being developed by industry groups and government agencies.

Enhanced Oil Recovery and Carbon Dioxide Sequestration

Occidental is an industry leader in applying carbon dioxide enhanced oil recovery (CO2-EOR) techniques for increased oil production. CO2-EOR is a key competitive advantage for our company. Operating more than 30 active CO2-EOR projects, Occidental injects 2.7 billion cubic feet per day or 1 trillion cubic feet of CO2 each year, making Occidental the largest injector of CO2 for EOR in the Permian Basin, and among the largest globally. From this CO2, about 40 to 50 percent is newly sourced from Occidental and other commercial suppliers, and the remainder is recycled from producing wells. Over time, virtually all injected CO2 becomes sequestered in the oil and gas reservoir.

Cumulative Stored CO2 - Denver Unit Plant
(in billions cubic feet)

CO<sub>2</sub>

Occidental continues to pursue measures to manage and control greenhouse gas (GHG) emissions - while continuing to expand our operations - and to promote the viability of CO2-EOR and Carbon Capture Utilization and Storage (CCUS) applications in oil and gas reservoirs. Underground injection of CO2, especially as practiced during EOR, is a ready and proven method for the large-scale geologic sequestration of CO2 that otherwise would be emitted to the atmosphere. In fact, the U.S. Government and the Intergovernmental Panel on Climate Change (IPCC) both support CCUS as part of a suite of pathways to reduce anthropogenic carbon emissions. Crucially, the IPCC and International Energy Agency project that most climate change models cannot meet the 1.5-2 degrees Celsius global warming scenarios without using CCUS technologies.

In 2015, the U.S. Environmental Protection Agency (EPA) approved a Monitoring, Reporting and Verification (MRV) Plan for simultaneous CO2 injection and sequestration for Occidental's Denver City unit operations in Texas. This is the first-of-its-kind MRV Plan approved by the EPA and represents an important milestone in the development and commercialization of CCUS technology as an approach for long-term management of greenhouse gas emissions. Since then, Occidental has received approval for a second MRV Plan at an additional CO2 facility. The continuing use of natural sources of CO2 in EOR is essential to support investment in and expansion of infrastructure that can be used in the future to transport and inject CO2 from anthropogenic sources.

Water Management

The production of oil and natural gas, electricity and chemicals requires water, and Occidental understands the importance of managing water resources responsibly. Occidental's water management program is designed to conserve and protect water resources in communities where we operate by optimizing the use of low-quality produced water, the recycling of water and limiting the use of freshwater used for drinking water supplies. We routinely assess our water management practices including those with respect to water supply, treatment and discharge, to identify water-related risks and opportunities for improvement. In addition, OxyChem, as an American Chemistry Council Responsible Care® company, is committed to reporting on its water management practices and water stewardship.

Occidental's water management program focuses on the unique characteristics of each community and locality of our operations. Through water management practices that include the treatment and use of low-quality produced water, the recycling of water and the limited use of freshwater and drinking water supplies, Occidental works to ensure its water use does not affect the ability of cities, towns, farms and ranches near our operations to secure its access to water resources. We report water metrics on our major global operations, including total water withdrawals, water recycling and wastewater discharges in the Annual Performance Summary Table.

Before beginning operations in a new location, Occidental's Health, Environment and Safety Management System (HESMS) requires an assessment of potential environmental effects, including those related to water resources. The HESMS encompasses programs, standards and operational strategies designed to conserve natural resources, such as improving efficient use, recycling and reuse of water and the quality of water being treated and discharged to surface water bodies. Occidental considers the longer-term patterns of integrated water resources management, regenerative capacity of ground water and aquifers, population growth/demand shifts and the potential for weather related impacts to evaluate and mitigate the effects of water risks on key operations and the safety and well-being of employees and contractors. When evaluating a new site or asset, this involves evaluating legal and regulatory issues and hydrological yield in terms of the reliability and proximity of other water users during exploration and production activities. Our analysis of water-related risks includes an information-gathering process, environmental due diligence, participation in industry association work groups (for example, IPIECA Water Working Group and the American Chemistry Council Responsible Care® ) and external stakeholder engagement to inform and refine our risk management and strategic planning processes.

Part of Occidental's assessment involves the identification of water-related risks and impacts as well as opportunities. Occidental uses various approaches, including the Global Environmental Management Initiative ®, Local Water Tool (GEMI® LWT) to assess risks and to evaluate water use and discharge at key operations, taking into account factors such as:

  • Physical and climatic characteristics

  • Future physical supply reliability

  • Population growth and industrial growth trends

  • Affected ecosystems

  • Regulatory issues

  • Social context

This process with the use of other industry risk tools, helps us validate the efficacy of existing water-related safeguards and identify new opportunities to ensure the protection of water sources and receiving water bodies.

Upstream Oil and Gas Water Management

The vast majority of water managed by Occidental is co-produced from hydrocarbon reservoirs with oil and natural gas. Occidental separates produced water, which is typically saline, from the produced oil and natural gas, and recycles it in a closed loop by reinjection into mature reservoirs as part of its improved oil recovery (IOR) or enhanced oil recovery (EOR) operations. Generally, since the ratio of water to oil and natural gas extracted increases over time, the extraction, processing, treatment and reinjection of produced water is integral to the design and efficient operation of Occidental's mature oil and natural gas fields. More recently developed oil and natural gas fields are in the primary recovery phase and do not require water injection to produce oil and gas. Occidental strives to use non-freshwater and recycled or reused sources in place of freshwater for both types of operations. Occidental also obtains water from other non-potable sources, seeking to use the lowest-quality water acceptable for operational activities, and it recycles produced water and wastewater wherever feasible.

Throughout its operations, Occidental is increasing the rate of recycling and reuse of water, which decreases our freshwater withdrawals, but also the need for transportation and disposal of water. Occidental has implemented major water treatment, reuse and recycling projects in many locations, including the United States and Oman. Occidental also is developing or enhancing water-related technologies. This includes new approaches for the treatment of produced water and wastewater streams. Occidental continues to evaluate new opportunities for beneficial reuse of water, such as for agricultural and ecological use or ranching operations.

The volumes and sources of water required by Occidental vary considerably by local basin, even from well to well. In all operations, Occidental strives to minimize the use of potable water sources and maximize the re-use of produced (flowback) water. In the Delaware Basin, Occidental's water recycling program achieves close to 95 percent recycling rate; only 5 percent of water used for drillings completions are fresh water sources. Since the inception of this program in 2016, 2.7 million barrels of produced water have been recycled. Occidental's operations expect to recycle approximately six million barrels by the end of 2017.

Discharge to surface water bodies requires a permit or authorization that sets water quality parameters consistent with the receiving water body and may specify treatment requirements. Additionally, discharges or runoff from Occidental's facilities are evaluated for water quality under other applicable regulations and company policies. In certain locations, such as in the United States and in Colombia, discharges of treated water from Occidental's facilities support riparian (or riverbank) eco-systems by providing a more consistent flow of freshwater than would otherwise exist.

Water Management for Hydraulic Fracturing

Occidental is committed to public disclosure about its hydraulic fracturing operations. In 2011, Occidental was an early participant in FracFocus®, a website created by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission to provide for well-specific voluntary disclosure of hydraulic fracturing operations, including the chemical ingredients used in fracturing fluids. In addition to providing a national registry, the website provides factual information about hydraulic fracturing and groundwater protection.

Occidental also maintains on-site Safety Data Sheets (SDS) for all of the chemicals and fracturing fluid additives it uses. Several states also use FracFocus® for regulatory disclosures. As a leading producer of oil and gas in the United States, Occidental remains at the forefront in disclosing hydraulic fracturing, including in jurisdictions where such disclosure is voluntary. Please refer to FracFocus.org if you would like to access the chemical registry or for more information about how hydraulic fracturing works, groundwater protection, chemical use and related regulations.

Occidental is committed to conducting hydraulic fracturing in a manner that does not impact the environment or the communities in which we operate. It is Occidental's practice to avoid diesel fuels, including any of the following chemicals: benzene, toluene, xylene and ethylbenzene (collectively BTEX), in hydraulic fracturing treatments. In certain hydraulic fracturing fluid ingredients, BTEX components may be present in trace amounts. In such cases, the BTEX components will be disclosed in accordance with FracFocus procedures. FracFocus may exclude chemicals protected by claims of protected / confidential information.

Occidental's commitment to using produced water from oil and gas reservoirs and other non-potable sources wherever feasible reduces our demand for freshwater. Produced water, along with varying volumes of drilling muds and fracturing fluids can be collected and reused in a closed loop system. Depending on the volume and chemical properties of the produced water, Occidental and its service companies employ a range of mitigation techniques to manage the potential environmental impacts of drilling materials and flowback fluids. Occidental works collaboratively with its service companies to improve drilling and production techniques to enhance the efficiency of water usage and to minimize the amount of chemicals required for hydraulic fracturing. Several techniques include:

  • Re-use of drilling fluids to the maximum extent; Occidental avoids sending any wastewater to disposal

  • Drilling using closed loop systems in areas with high freshwater tables

  • Within our U.S. drilling operations, Occidental stores drilling muds, other (oily) residuals and flowback water in closed containment systems or tanks for on-site storage and eventual disposal

Regulatory Compliance

Occidental's operations are governed by hundreds of thousands of health, environment and safety related legal, regulatory and permit requirements. We monitor our performance worldwide through an index that tracks reportable events and citations to the appropriate government agency. Reportable events include spills or releases in excess of a level stipulated by regulatory agencies, or a deviation from a regulatory standard or an established permit condition. Citations include notices of violation received from a government agency, as well as initiation of government agency proceedings such as administrative orders, consent orders or agreements, civil actions or court orders to enforce HES laws or regulations. Occidental's high level of performance in our increasingly regulated industry sector reflects the company's attention to ensuring compliance.

Citations and penalty data are influenced by the level of enforcement activity, which varies from year to year. Occidental takes proactive measures to identify, report and resolve compliance issues in cooperation with government agencies, which can also serve to mitigate potential penalties. Discussion of Occidental's environmental spending can be found in our Annual Report on Form 10-K.


Occidental takes pride in stimulating economic opportunity and growth in the countries where it operates. Sourcing from local suppliers and contractors, offering competitive employee compensation and benefits, producing oil and gas on behalf of host governments, paying substantial taxes and royalties, and investing in valuable social programs all contribute to the development of sustainable economies. For example, in 2016, Occidental contributed approximately $12.1 billion to the U.S. economy through salaries, payments to businesses for goods and services, taxes, and financial returns to investors. Occidental paid more than $1.1 billion in worldwide taxes, including income, production, property and payroll taxes at key operating locations in the U.S., Oman, Qatar and Colombia. During 2016, Occidental did not receive any significant financial assistance from government.

Occidental actively engages with its key stakeholders in order to understand their interests and concerns and develop mutually beneficial outcomes. This process helps us identify social investment opportunities in key areas such as education, health, culture and economic development to address local community needs and to support development goals.



Performance Reports