Occidental Petroleum (OXY) 10-Q 2 Nov 09 2009 Q3 Quarterly report Financial data

CONSOLIDATED CONDENSED BALANCE

CONSOLIDATED CONDENSED BALANCE SHEETS (USD $)
In Millions	Sep. 30, 2009	Dec. 31, 2008
CURRENT ASSETS
Cash and cash equivalents	$1,608	$1,777
Trade receivables, net	3,330	3,117
Marketing and trading assets and other	622	1,012
Inventories	1,132	958
Prepaid expenses and other	308	308
Total current assets	7,000	7,172
INVESTMENTS IN UNCONSOLIDATED ENTITIES	1,450	1,263
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation, depletion and amortization of $18,537 at September 30, 2009 and $16,462 at December 31, 2008	32,905	32,266
LONG-TERM RECEIVABLES AND OTHER ASSETS, NET	859	836
TOTAL ASSETS	42,214	41,537
CURRENT LIABILITIES
Current maturities of long-term debt and notes payable	239	698
Accounts payable	2,999	3,306
Accrued liabilities	1,682	1,861
Domestic and foreign income taxes	79	158
Liabilities of discontinued operations	107	111
Total current liabilities	5,106	6,134
LONG-TERM DEBT, NET	2,556	2,049
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred and other domestic and foreign income taxes	2,813	2,660
Long-term liabilities of discontinued operations	140	152
Other	3,079	3,217
TOTAL DEFERRED CREDITS AND OTHER LIABILITIES	6,032	6,029
STOCKHOLDERS' EQUITY
Common stock, at par value	177	176
Treasury stock	(4,150)	(4,121)
Additional paid-in capital	7,132	7,113
Retained earnings	25,864	24,684
Accumulated other comprehensive loss	(565)	(552)
Noncontrolling interest	62	25
TOTAL STOCKHOLDERS' EQUITY	28,520	27,325
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$42,214	$41,537

1_CONSOLIDATED CONDENSED BALANC

CONSOLIDATED CONDENSED BALANCE SHEETS (parenthetical) (USD $)
In Millions	Sep. 30, 2009	Dec. 31, 2008
CONSOLIDATED CONDENSED BALANCE SHEETS
Accumulated depreciation, depletion and amortization	$18,537	$16,462

CONSOLIDATED CONDENSED STATEMEN

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (USD $)
In Millions, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
REVENUES AND OTHER INCOME
Net sales	$4,104	$7,060	$10,864	$20,196
Interest, dividends and other income	22	59	80	192
Gains on disposition of assets, net	0	0	7	25
TOTAL REVENUES AND OTHER INCOME	4,126	7,119	10,951	20,413
COSTS AND OTHER DEDUCTIONS
Cost of sales	2,130	2,780	6,253	7,800
Selling, general and administrative and other operating expenses	359	295	991	994
Taxes other than on income	105	162	320	466
Environmental remediation	10	(2)	10	28
Exploration expense	56	61	168	193
Interest and debt expense, net	40	24	99	94
TOTAL COSTS AND OTHER DEDUCTIONS	2,700	3,320	7,841	9,575
Income before income taxes and other items	1,426	3,799	3,110	10,838
Provision for domestic and foreign income taxes	549	1,546	1,245	4,511
Income from equity investments	(66)	(57)	(154)	(168)
Income from continuing operations	943	2,310	2,019	6,495
Discontinued operations, net	(2)	(1)	(7)	23
Net income	941	2,309	2,012	6,518
Less: Net income attributable to noncontrolling interest	(14)	(38)	(35)	(104)
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$927	$2,271	$1,977	$6,414
BASIC EARNINGS PER COMMON SHARE - ATTRIBUTABLE TO COMMON STOCK
Income from continuing operations (in dollars per share)	1.14	2.78	2.44	7.78
Discontinued operations, net (in dollars per share)	$0	$0	-0.01	0.03
BASIC EARNINGS PER COMMON SHARE (in dollars per share)	1.14	2.78	2.43	7.81
DILUTED EARNINGS PER COMMON SHARE - ATTRIBUTABLE TO COMMON STOCK
Income from continuing operations (in dollars per share)	1.14	2.77	2.44	7.74
Discontinued operations, net (in dollars per share)	$0	$0	-0.01	0.03
DILUTED EARNINGS PER COMMON SHARE (in dollars per share)	1.14	2.77	2.43	7.77
DIVIDENDS PER COMMON SHARE (in dollars per share)	0.33	0.32	0.98	0.89

2_CONSOLIDATED CONDENSED STATEM

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
CASH FLOW FROM OPERATING ACTIVITIES
Net income	$2,012	$6,518
Adjustments to reconcile net income to net cash provided by operating activities:
Discontinued operations, net	7	(23)
Depreciation, depletion and amortization expense	2,297	1,957
Deferred income tax provision	247	397
Other non-cash charges to income	333	380
Gains on disposition of assets, net	(7)	(25)
Income from equity investments	(154)	(168)
Dry hole and impairment expense	130	134
Changes in operating assets and liabilities	(826)	(822)
Other operating, net	(165)	(245)
Operating cash flow from continuing operations	3,874	8,103
Operating cash flow from discontinued operations	(31)	33
Net cash provided by operating activities	3,843	8,136
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditures	(2,649)	(3,070)
Purchases of businesses and assets, net	(582)	(3,404)
Sales of assets, net	47	22
Sales of investments	0	51
Equity investments and other investing, net	(64)	(58)
Net cash used by investing activities	(3,248)	(6,459)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from long-term debt	740	51
Payments of long-term debt	(699)	(71)
Proceeds from issuance of common stock	16	22
Purchases of treasury stock	(29)	(1,487)
Excess tax benefits related to share-based payments	15	74
Cash dividends paid	(794)	(677)
Stock options exercised	2	10
Distributions to noncontrolling interest	(15)	(111)
Net cash used by financing activities	(764)	(2,189)
Decrease in cash and cash equivalents	(169)	(512)
Cash and cash equivalents-beginning of period	1,777	1,964
Cash and cash equivalents-end of period	$1,608	$1,452

General

General
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
General	1. General In these unaudited consolidated condensed financial statements, Occidental means Occidental Petroleum Corporation, a Delaware corporation (OPC), and/or one or more entities in which it owns a majority voting interest (subsidiaries). Occidental has made its disclosures in accordance with accounting principles generally accepted in the United States of America as they apply to interim reporting, and condensed or omitted, as permitted by the Securities and Exchange Commissions rulesand regulations, certain information and disclosures normally included in consolidated financial statements and the notes. The consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and the notes thereto in Occidentals Annual Report on Form10-K for the year ended December31, 2008. In the opinion of Occidentals management, the accompanying consolidated condensed financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present Occidentals consolidated financial position as of September30, 2009, and the consolidated statements of income and cash flows for the three and nine months ended September30, 2009 and 2008, as applicable. The income and cash flows for the periods ended September30, 2009 and 2008, are not necessarily indicative of the income or cash flows to be expected for the full year. Occidentals management has evaluated events from October1, 2009 through November2, 2009 and has made the appropriate disclosures.

Asset Acquisitions, Disposition

Asset Acquisitions, Dispositions and Other Transactions
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Asset Acquisitions, Dispositions and Other Transactions	2. Asset Acquisitions, Dispositions and Other Transactions In October2009, Occidental announced it signed an agreement to purchase Phibro LLC (Phibro) from Citigroup Inc. for approximately net asset value as of the closing date, which is anticipated to be by the end of the year. Phibro, primarily a trader in oil and gas, will become a part of Occidentals midstream, marketing and other segment. In July2009, Occidental repaid its $600 million debt associated with the Dolphin Project. In May2009, Occidental issued $750 million of 4.125-percent senior unsecured notes, receiving $740 million of net proceeds. Interest on the notes will be payable semi-annually in arrears on June1 and December1 of each year. The notes will mature on June1, 2016. In April2009, Occidental and its partner signed a Development and Production Sharing Agreement (DPSA) with the National Oil and Gas Authority of Bahrain for further development of the Bahrain Field. The DPSA is expected to become effective in the fourth quarter of 2009. Under this agreement, a Joint Operating Company will serve as operator for the project under the DPSA.

Accounting and Disclosure Chang

Accounting and Disclosure Changes
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Accounting and Disclosure Changes	3. Accounting and Disclosure Changes In the quarter ended June30, 2009, Occidental adopted new disclosure requirements for its evaluation of subsequent events as a result of new accounting standards issued by the Financial Accounting Standards Board (FASB) in May2009. In the quarter ended June30, 2009, Occidental adopted new disclosure requirements for the fair value of financial instruments in interim periods when it is practicable to estimate such values as a result of new accounting standards issued by the FASB in April2009. Beginning January1, 2009, Occidental modified its calculation of basic earnings per share (EPS) in accordance with new accounting standards issued by the FASB in June2008. Under this new accounting standard, instruments containing rights to nonforfeitable dividends granted in share-based payment transactions are considered participating securities prior to vesting and, therefore, should be included in the earnings allocations in computing EPS under the two-class method. While prior period EPS data has been adjusted retrospectively, this change had no material impact on Occidentals financial statements. Beginning January1, 2009, Occidental adopted new disclosure requirements for its derivative and hedging activities as a result of new accounting standards issued by the FASB in March2008. Beginning January1, 2009, Occidental prospectively adopted the deferred portion of new accounting standards related to the application of the measurement and disclosure framework of non-financial assets and liabilities that are recorded at fair value on a non-recurring basis. These new standards were issued by the FASB in February2008. Beginning January1, 2009, Occidental adopted new accounting standards related to the accounting and disclosure requirements for business combinations. The new standards were issued by the FASB in December2007 and April2009 and had no material impact on Occidentals financial statements upon adoption. On January1, 2009, Occidental adopted new accounting standards affecting the presentation and disclosure requirements related to noncontrolling interests in subsidiaries. Occidental adopted these new standards prospectively, except for the presentation and disclosure requirements which were applied retrospectively to all periods presented. These new standards were issued in December2007 and had no material impact on Occidentals financial statements upon adoption.

Comprehensive Income

Comprehensive Income
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Comprehensive Income	4. Comprehensive Income The following table presents Occidentals comprehensive income for the three and nine months ended September30, 2009 and 2008 (in millions): Periods Ended September30 Three months Nine months 2009 2008 2009 2008 Net income attributable to common stock $ 927 $ 2,271 $ 1,977 $ 6,414 Other comprehensive income (loss) items Foreign currency translation adjustments 10 (20 ) 28 (9 ) Pension and post-retirement adjustments 7 6 19 (4 ) Unrealized gains (losses) on derivatives (8 ) 404 (54 ) (158 ) Reclassification of realized losses (gains) on derivatives 16 20 (6 ) 103 Unrealized gains (losses) on securities (2 ) 14 Realized losses on securities (16 ) Other comprehensive income (loss), net of tax 25 408 (13 ) (70 ) Comprehensive income attributable to common stock $ 952 $ 2,679 $ 1,964 $ 6,344 There were no other comprehensive income (loss) items related to noncontrolling interests for the three and nine months ended September30, 2009 and 2008.

Supplemental Cash Flow Informat

Supplemental Cash Flow Information
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Supplemental Cash Flow Information	5. Supplemental Cash Flow Information Income taxes paid (received) for the nine months ended September30, 2009 and 2008 were $(168) million and $1.7 billion for U.S. taxes, respectively, and $1.1 billion and $2.3 billion for foreign taxes, respectively. Interest paid totaled approximately $116 million and $93 million for the nine months ended September30, 2009 and 2008, respectively.

Inventories

Inventories
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Inventories	6. Inventories A portion of inventories is valued under the LIFO method. The valuation of LIFO inventory for interim periods is based on Occidentals estimates of year-end inventory levels and costs. Inventories as of September30, 2009 and December31, 2008 consisted of the following (in millions): 2009 2008 Raw materials $ 48 $ 123 Materials and supplies 555 412 Finished goods 600 494 1,203 1,029 LIFO reserve (71 ) (71 ) Total $ 1,132 $ 958

Environmental Liabilities and E

Environmental Liabilities and Expenditures
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Environmental Liabilities and Expenditures	7. Environmental Liabilities and Expenditures Occidentals operations are subject to stringent federal, state, local and foreign laws and regulations relating to improving or maintaining environmental quality. Occidentals environmental compliance costs have generally increased over time and could continue to rise in the future. Occidental factors environmental expenditures for its operations into its business planning process as an integral part of producing quality products responsive to market demand. The laws that require or address environmental remediation, including the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and similar federal, state, local and foreign laws, may apply retroactively and regardless of fault, the legality of the original activities or the current ownership or control of sites. OPC or certain of its subsidiaries participate in or actively monitor a range of remedial activities and government or private proceedings under these laws with respect to alleged past practices at operating, closed and third-party sites. Remedial activities may include one or more of the following: investigation including sampling, modeling, risk assessment or monitoring; cleanup measures including removal, treatment or disposal; or operation and maintenance of remedial systems. The environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, punitive damages, civil penalties, injunctive relief and government oversight costs. As of September30, 2009, Occidental participated in or monitored remedial activities or proceedings at 167 sites. The following table presents Occidentals environmental remediation reserves as of September30, 2009, the current portion of which is included in accrued liabilities ($67 million) and the remainder in deferred credits and other liabilities other ($334 million). The reserves are grouped in four categories of environmental remediation sites sites listed or proposed for listing by the U.S. Environmental Protection Agency on the CERCLA National Priorities List (NPL) as well as non-NPL third-party sites, Occidental-operated sites and closed or non-operated Occidental sites. Number of Sites Reserve Balance (in millions) NPL sites 40 $ 56 Third-party sites 77 99 Occidental-operated sites 19 127 Closed or non-operated Occidental sites 31 119 Total 167 $ 401 As of September30, 2009, Occidentals environmental reserves exceeded $10 million at 14 of the 167 sites described above, and 117 of the sites had reserves from $0 to $1 million. Occidental expects to expend funds corresponding to about half of the current environmental reserves over the next four years and the balance over the subsequent ten or more years. Occidental believes its range of reasonably possible additional loss beyond those liabilities recorded for environmental remediation at the sites described above could be up to $390 million. The status of Occidentals involvement with the sites and related significant assumptions have not changed mat

Lawsuits, Claims, Commitments,

Lawsuits, Claims, Commitments, Contingencies and Related Matters
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Lawsuits, Claims, Commitments, Contingencies and Related Matters	8. Lawsuits, Claims, Commitments, Contingencies and Related Matters OPC or certain of its subsidiaries are named, in the normal course of business, in lawsuits, claims and other legal proceedings that seek, among other things, compensation for alleged personal injury, breach of contract, property damage, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. OPC or certain of its subsidiaries also have been named in proceedings under CERCLA and similar federal, state, local and foreign environmental laws. These environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, punitive damages, civil penalties and injunctive relief; however, Occidental is usually one of many companies in these proceedings and has to date been successful in sharing response costs with other financially sound companies. With respect to all such lawsuits, claims and proceedings, including environmental proceedings, Occidental accrues reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Lawsuits have been filed in Nicaragua against Occidental Chemical Corporation (OxyChem) and other companies that once manufactured or used a pesticide, dibromochloropropane (DBCP). These lawsuits claim damages of several billion dollars for alleged personal injuries. In the opinion of management, the claims against OxyChem are without merit because, among other things, the DBCP it manufactured was never sold or used in Nicaragua. In order to preserve its jurisdictional defense, OxyChem elected not to make a substantive appearance in these cases. Nicaraguan courts have entered judgments of approximately $900 million against four defendants, including OxyChem. Under Nicaraguan law, the judgments would be shared equally among the defendants. The plaintiffs attempted to enforce one judgment in Miami. In January2009, the federal district court in Miami granted summary judgment in favor of OxyChem and refused to enforce the judgment finding the Nicaraguan court lacked personal jurisdiction because there was no evidence that any OxyChem DBCP was used in Nicaragua and that OxyChem did not otherwise have sufficient contacts with Nicaragua. In October2009, the same court concluded the following additional grounds existed for not enforcing the Nicaraguan judgment: the Nicaraguan trial court lacked jurisdiction under a Nicaraguan DBCP statute; the judgment was rendered under a judicial system that does not provide procedures compatible with due process of law and lacks impartial tribunals; and enforcing the judgment would violate Florida public policy. OxyChem has no assets in Nicaragua and, in the opinion of management, no such Nicaraguan judgment would be enforceable in the United States. During the course of its operations, Occidental is subject to audit by tax authorities for varying periods in various federal, state, local and foreign tax jurisdictions. While the audits for taxable years through 2007 have concluded for U.S. federal income tax purposes, the 2008 taxable year as well as the current period are currently u

Retirement Plans and Postretire

Retirement Plans and Postretirement Benefits
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Retirement Plans and Postretirement Benefits	9. Retirement Plans and Postretirement Benefits The following table sets forth the components of the net periodic benefit costs for Occidentals defined benefit pension and postretirement benefit plans for the three and nine months ended September30, 2009 and 2008 (in millions): Three months ended September30 2009 2008 Net Periodic Benefit Costs Pension Benefit Postretirement Benefit Pension Benefit Postretirement Benefit Service cost $ 4 $ 4 $ 2 $ 3 Interest cost 7 10 7 10 Expected return on plan assets (6 ) (9 ) Amortization of prior service cost 1 Recognized actuarial loss 4 5 4 Total $ 10 $ 19 $ $ 17 Nine months ended September30 2009 2008 Net Periodic Benefit Costs Pension Benefit Postretirement Benefit Pension Benefit Postretirement Benefit Service cost $ 12 $ 12 $ 6 $ 10 Interest cost 21 30 21 29 Expected return on plan assets (19 ) (28 ) Amortization of prior service cost 1 Recognized actuarial loss 12 16 1 12 Total $ 27 $ 58 $ $ 51 Occidental contributed $2 million and $7 million to its defined benefit pension plans for the three and nine months ended September30, 2009, respectively, and expects to contribute an additional $3 million in the remainder of 2009. Occidental contributed $1 million and $3 million to its defined benefit pension plans for the three and nine months ended September30, 2008, respectively.

Fair Value Measurements

Fair Value Measurements
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Fair Value Measurements	10. Fair Value Measurements Occidental has categorized its assets and liabilities that are measured at fair value, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy: Level 1 is the use of quoted prices in active markets for identical assets or liabilities; Level 2 is the use of other observable inputs other than quoted prices; and Level 3 is the use of unobservable inputs. The following table provides fair value measurement information for such assets and liabilities that are measured on a recurring basis (in millions): Fair Value Measurements at September30, 2009 Using: Description Total Fair Value Level 1 Level 2 Level 3 Assets: Derivative financial instruments(a) Marketing and trading assets and other $ 128 $ 10 $ 118 $ Long-term receivables and other assets, net 136 136 Total assets $ 264 $ 10 $ 254 $ Liabilities: Derivative financial instruments(a) Accrued liabilities $ (230 ) $ (6 ) $ (224 ) $ Deferred credits and other liabilities-other (305 ) (305 ) Total liabilities $ (535 ) $ (6 ) $ (529 ) $ (a) Derivative fair values are reported on a net basis to the extent a legal right of offset with a counterparty exists. For the nine months ended September30, 2009, Occidental did not have any assets or liabilities measured at fair value on a non-recurring basis. Occidental primarily applies the market approach for recurring fair value measurements and maximizes its use of observable inputs and minimizes its use of unobservable inputs. Occidental utilizes the mid-point price between bid and ask prices for valuing the majority of its assets and liabilities measured and reported at fair value. In addition to using market data, Occidental makes assumptions in valuing its assets and liabilities, including assumptions about risk and the risks inherent in the inputs to the valuation technique. Certain of Occidentals derivative instruments, however, are valued using industry-standard models that consider various inputs, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable prices at which transactions are executed in the marketplace. The carrying amounts of cash and cash equivalents and other on-balance-sheet financial instruments, other than fixed-rate debt, approximate fair value. The cost, if any, to terminate off-balance-sheet financial instruments is not significant. Occidental estimates the fair value of its fixed-rate debt based on the quoted market prices for its debt instruments or on quoted market yields for similarly rated debt instruments, taking into account their maturities. The estimate

Derivatives

Derivatives
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Derivatives	11. Derivatives As discussed in Note 3, Occidental adopted new accounting standards for derivative disclosures on January1, 2009. Derivatives are carried at fair value and, when a legal right of offset with the same counterparty exists, Occidental records these derivatives on a net basis. Occidental applies hedge accounting when transactions meet specified criteria for such treatment. If a derivative does not qualify as a hedge or is not designated and documented as a hedge, any fair value gains or losses are recognized in earnings in the current period. For cash-flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (OCI) with an offsetting adjustment to the basis of the item being hedged. Realized gains or losses from cash-flow hedges, and any ineffectiveness, are recorded as a component of net sales in the consolidated statements of income. Ineffectiveness is primarily created by a basis difference between the hedged item and the hedging instrument due to location, quality or grade of the physical commodity transactions. Gains and losses from derivative instruments are reported net in the consolidated statements of income. There were no fair value hedges as of and for the three and nine months ended September30, 2009. Occidental is exposed to commodity price risk. Occidental has used derivatives to reduce its long-term exposure to price volatility on a small portion of its oil and gas production. Through its low-risk marketing and trading activities and within its established policy controls and procedures, Occidental also uses derivative instruments, including a combination of short-term futures, forwards, options and swaps to improve realized prices for its oil and gas. A majority of Occidentals derivative transactions are exchange-traded contracts, which are subject to nominal credit risk as a significant portion of these derivative transactions are executed on a daily margin basis. Cash collateral of $132 million deposited by Occidental with clearing houses, which has not been reflected in the derivative fair value tables, is included in the marketing and trading assets and other balance as of September30, 2009. In addition, Occidental executes a portion of its derivative transactions in the over-the-counter (OTC) market with various high-credit-quality counterparties. Occidental is subject to counterparty credit risk to the extent the counterparty to the derivatives is unable to meet its settlement commitments. Occidental manages this credit risk by selecting counterparties that it believes to be financially strong, by spreading the credit risk among many such counterparties, and by entering into master netting arrangements with the counterparties, as appropriate. Occidental actively monitors the creditworthiness of each counterparty and records valuation adjustments against the derivative assets to reflect counterparty risk, if necessary. Certain of Occidentals OTC derivative instruments contain collateral thresholds. If credit thresholds are exceeded or if Occidentals or the counterpartys credit rating is reduced by the major credit ratin

Industry Segments

Industry Segments
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Industry Segments	12. Industry Segments Occidental conducts its continuing operations through three segments: (1)oil and gas; (2)chemical; and (3)midstream, marketing and other (midstream and marketing). The oil and gas segment explores for, develops, produces and markets crude oil, natural gas liquids (NGLs), condensate and natural gas. The chemical segment manufactures and markets basic chemicals, vinyls and performance chemicals. The midstream and marketing segment gathers, treats, processes, transports, stores, trades and markets crude oil, natural gas, NGLs, condensate and carbon dioxide and generates and markets power. Segment earnings generally exclude income taxes, interest income, interest expense, environmental remediation expenses, unallocated corporate expenses and discontinued operations, but include gains and losses from dispositions of segment assets and income from the segments equity investments. The following table presents Occidentals industry segment and corporate disclosures (in millions): Oil and Gas Chemical Midstream, Marketing and Other Corporate and Eliminations Total Nine months ended September30, 2009 Net sales $ 7,952 $ 2,445 $ 763 $ (296 )(a) $ 10,864 Pretax operating profit (loss) $ 3,127 $ 356 $ 154 $ (373 )(b) $ 3,264 Income taxes (1,245 )(c) (1,245 ) Discontinued operations (7 ) (7 ) Net income attributable to noncontrolling interest (35 ) (35 ) Net income (loss) attributable to common stock $ 3,092 $ 356 $ 154 $ (1,625 ) $ 1,977 Nine months ended September30, 2008 Net sales $ 15,441 $ 4,107 $ 1,204 $ (556 )(a) $ 20,196 Pretax operating profit (loss) $ 10,416 $ 542 $ 350 $ (302 )(b) $ 11,006 Income taxes (4,511 )(c) (4,511 ) Discontinued operations 23 (d) 23 Net income attributable to noncontrolling interest (104 ) (104 ) Net income (loss) attributable to common stock $ 10,312 $ 542 $ 350 $ (4,790 ) $ 6,414 (a) Intersegment sales are generally made at prices approximately equal to those that the selling entity is able to obtain in third-party transactions. (b) Includes net interest expense, administration expense, environmental remediation and other pre-tax items. (c) Includes all foreign and domestic income taxes from continuing operations. (d) In 2008, Occidental received a $61 million refund of taxes from Ecuador.

Earnings Per Share

Earnings Per Share
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Earnings Per Share	13. Earnings Per Share As discussed in Note 3, Occidental adopted a new accounting standard for EPS on January1, 2009. Under this new accounting standard, nonvested share-based payment awards granted by Occidental containing rights to nonforfeitable dividends are considered participating securities. These securities allow the holders to participate in all dividends declared with the holders of common stock. Accordingly, Occidental applies the two-class method when computing basic and diluted EPS. Basic EPS was computed by dividing net income attributable to common stock by the weighted-average number of common shares outstanding during each period, net of treasury shares and including vested but unissued shares and share units. The computation of diluted EPS further reflected the dilutive effect of stock options and performance-based stock awards. The following table presents the calculation of basic and diluted EPS for the three and nine months ended September30, 2009 and 2008: Periods Ended September30 Three months Nine months (in millions, except per share amounts) 2009 2008 2009 2008 Basic EPS Income from continuing operations $ 943 $ 2,310 $ 2,019 $ 6,495 Less: Income from continuing operations attributable to noncontrolling interest (14 ) (38 ) (35 ) (104 ) Net income from continuing operations attributable to common stock 929 2,272 1,984 6,391 Discontinued operations (2 ) (1 ) (7 ) 23 Net income attributable to common stock 927 2,271 1,977 6,414 Less: Net income allocated to participating securities (1 ) (4 ) (3 ) (13 ) Net income attributable to common stock, net of participating securities $ 926 $ 2,267 $ 1,974 $ 6,401 Weighted average number of basic shares 811.8 815.3 811.1 820.1 Basic EPS $ 1.14 $ 2.78 $ 2.43 $ 7.81 Diluted EPS Net income attributable to common stock, net of participating securities $ 926 $ 2,267 $ 1,974 $ 6,401 Weighted average number of basic shares 811.8 815.3 811.1 820.1 Dilutive effect of potentially dilutive securities 2.6 2.3 2.8 3.4 Total diluted weighted average common shares 814.4 817.6 813.9 823.5 Diluted EPS $ 1.14 $ 2.77 $ 2.43 $ 7.77

Document and Entity Information

Document and Entity Information (USD $)
In Billions, except Share data	9 Months Ended Sep. 30, 2009	Jun. 30, 2008
Document and Entity Information
Entity Registrant Name	OCCIDENTAL PETROLEUM CORP /DE/
Entity Central Index Key	0000797468
Document Type	10-Q
Document Period End Date	2009-09-30
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		71.9
Entity Common Stock, Shares Outstanding	811,667,233