Occidental Petroleum, a prominent energy corporation, has recently made substantial strides in improving its financial health by significantly reducing its outstanding debt and enhancing returns for its shareholders. This pivotal transformation follows the successful divestiture of its OxyChem division to Warren Buffett's Berkshire Hathaway, marking a strategic shift towards a more robust and shareholder-friendly financial structure.

Occidental Petroleum Fortifies Financial Standing with Key Strategic Sale

In a significant corporate development on February 19, 2026, Occidental Petroleum announced the successful completion of the sale of its OxyChem division to Berkshire Hathaway. This transaction generated an impressive $9.7 billion in proceeds, which Occidental Petroleum strategically allocated to debt reduction. Specifically, the company utilized these funds to pay down approximately $5.8 billion of its debt, thereby bringing its total principal debt down to a more manageable figure of around $15 billion. This aggressive deleveraging effort has substantially bolstered the company's balance sheet and financial stability. Following this decisive action, Occidental Petroleum has initiated a shift in its capital allocation strategy from primarily reducing debt to increasing direct returns to shareholders. Evidencing this new direction, the company declared an increase in its quarterly dividend by over 8%, raising it to 26 cents per share. Berkshire Hathaway continues to be a major stakeholder in Occidental Petroleum, holding a significant portion of its shares, alongside preferred shares and warrants, reinforcing a deep strategic connection between the two entities. Concurrently, Occidental is intensifying its focus on its core oil and gas exploration and production activities, particularly within the lucrative Permian Basin, which is central to its future growth ambitions. The company reported robust operating cash flow and remains committed to further debt reduction while maintaining stringent discipline in its capital expenditures.

This strategic move by Occidental Petroleum provides a clear roadmap for companies burdened with high debt levels, illustrating how targeted divestitures can rapidly improve financial health. It highlights the importance of strategic partnerships, such as that with Berkshire Hathaway, which can provide both capital and confidence to investors. Furthermore, the quick pivot from debt reduction to shareholder returns demonstrates a strong commitment to value creation, setting a positive example for corporate governance and financial management in the energy sector.