EXHIBIT 8.1
January 20, 1999
Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, California 90024
Oxy Capital Trust I
c/o Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, California 90024
Re: 8.16% Trust Originated Preferred Securities
of Oxy Capital Trust I
-------------------------------------------
Ladies and Gentlemen:
We have acted as special tax counsel for Occidental Petroleum
Corporation, a Delaware corporation (the "Company"), and Oxy Capital Trust I, a
statutory business trust organized under the Business Trust Act of the State of
Delaware (12 Del. Code Ann., tit. 12, (S)(S) 3801, et seq.), in connection with
the sale pursuant to an Underwriting Agreement dated January 13, 1999 among the
Company, the Trust, and the underwriters (the "Underwriters") named therein (the
"Underwriting Agreement") of 21,000,000 8.16% Trust Preferred Securities
(liquidation amount $25 per preferred security) of the Trust (the "Preferred
Securities"), representing undivided beneficial interests in the assets of the
Trust.
The Preferred Securities are guaranteed by the Company with respect
to distributions and payments upon liquidation, redemption, and otherwise
pursuant to the Preferred Securities Guarantee Agreement, dated as of January
20, 1999 (the "Guarantee Agreement"), between the Company and The Bank of New
York, as trustee, for the benefit of the holders of the Preferred Securities.
Occidental Petroleum Corporation
Oxy Capital Trust I
January 20, 1999
Page 2
In connection with the issuance of the Preferred Securities, the Trust
is also issuing 649,485 8.16% Common Securities (liquidation amount $25 per
common security) (the "Common Securities"), representing undivided beneficial
interests in the assets of the Trust.
The proceeds from the sale of the Preferred Securities and the Common
Securities are to be used by the Trust to purchase an aggregate principal amount
of $541,237,125 of 8.16% Subordinated Deferrable Interest Notes due 2039 (the
"Subordinated Notes"), to be issued by the Company. The Preferred Securities and
the Common Securities are to be issued pursuant to the Amended and Restated
Declaration of Trust, dated as of January 20, 1999 (the "Declaration"), among
the Company, as sponsor, The Bank of New York (Delaware), as Delaware trustee
(the "Delaware Trustee"), The Bank of New York, as property trustee (the
"Property Trustee"), and A.R. Leach, J.R. Havert, and John R. Zaylor as regular
trustees (the "Regular Trustees"). The Subordinated Notes are to be issued
pursuant to an indenture, dated as of January 20, 1999 (the "Indenture"),
between the Company and The Bank of New York, as debt trustee (the "Debt
Trustee").
Capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the Underwriting Agreement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Prospectus
Supplement dated January 13, 1999 (including a Prospectus dated January 8,
1999); (ii) the Certificate of Trust filed with the Secretary of State of the
State of Delaware as of January 20, 1999, by the Regular Trustees, the Property
Trustee, and the Delaware Trustee; (iii) an executed copy of the Declaration
including the designation of the terms of the Preferred Securities; (iv) the
form of the Preferred Securities and a specimen certificate thereof; (v) an
executed copy of the Guarantee Agreement; (vi) an executed copy of the
Indenture; (vii) the form of Subordinated Notes and a specimen certificate
thereof; (viii) the form of Common Securities and a specimen certificate
thereof; (ix) an executed copy of the Underwriting Agreement; and (x)
representations from an officer of the Company dated January 20,
2
Occidental Petroleum Corporation
Oxy Capital Trust I
January 20, 1999
Page 3
1999. We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such records of the Company and the Trust and
such agreements, certificates of public officials, certificates of officers,
trustees or other representatives of the Company, the Trust and others, as
applicable, and such other documents, certificates and records as we have deemed
necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies, and the
authenticity of the originals of such latter documents. In making our
examination of documents executed, or to be executed by parties other than the
Company or the Trust, we have assumed that such parties had, or will have the
power, corporate or other, to enter into and perform all obligations thereunder
and have also assumed the due authorization by all requisite action, corporate
or other, and execution and delivery by such parties of such documents and that
such documents constitute, or will constitute, valid and binding obligations of
such parties. As to any facts material to the opinions expressed herein which
were not independently established or verified, we have relied upon oral or
written statements and representations of officers, trustees and other
representatives of the Company, the Trust and others.
In rendering our opinion, we have participated in the preparation of
the Prospectus Supplement. Our opinion is conditioned on, among other things,
the initial and continuing accuracy of the facts, information, covenants, and
representations set forth in the documents referred to above and the statements
and representations made by the Company and the Trust.
In rendering our opinion, we have considered the provisions of the
Internal Revenue Code of 1986, as amended, Treasury regulations (proposed,
temporary and final) promulgated thereunder, judicial decisions and Internal
Revenue Service rulings all as of the date hereof, and all of which are subject
to change, which changes may be retroactively applied. A change in the
authorities
Occidental Petroleum Corporation
Oxy Capital Trust I
January 20, 1999
Page 4
upon which our opinion is based could affect our conclusions. There can be no
assurance, moreover, that any opinion expressed herein will be accepted by the
Internal Revenue Service or, if challenged, by a court.
Based solely upon the foregoing, we are of the opinion that under
current United States federal income tax law, although the discussion set forth
in the Prospectus Supplement under the heading "CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES" does not purport to discuss all possible United States
federal income tax consequences of the purchase, ownership, and disposition of
the Preferred Securities, in our opinion such discussion constitutes, in all
material respects, a fair and accurate summary of the United States federal
income tax consequences, to holders who purchase the Preferred Securities at
their original issuance, of the purchase, ownership, and disposition of the
Preferred Securities.
Except as set forth above, we express no opinion to any party as to
the tax consequences, whether United States federal, state, local or foreign, of
the issuance of the Subordinated Notes, the Preferred Securities, the Common
Securities, or any transactions related to or contemplated by such issuance.
We are furnishing this opinion to you solely for your benefit in connection with
the sale of the Preferred Securities pursuant to the Underwriting Agreement and
this opinion is not to be used, circulated, quoted, or otherwise referred to for
any other purpose without our written permission. This opinion is expressed as
of the date hereof, and we disclaim any undertaking to advise you of changes of
the facts stated or assumed herein or any subsequent changes in applicable law.
We consent to the filing of this opinion as Exhibit 8.1 to the Form
8-K of the Company dated January 13, 1999 as filed with the Securities and
Exchange Commission on January 20, 1999, and to the reference to Skadden, Arps,
Slate, Meagher & Flom LLP therein under the caption "Legal Matters." In giving
this consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
Occidental Petroleum Corporation
Oxy Capital Trust I
January 20, 1999
Page 5
amended or the rules or regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher
& Flom LLP