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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MAY 15, 1998
OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-9210 95-4035997
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
10889 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90024
(Address of principal executive offices) (ZIP code)
Registrant's telephone number, including area code:
(310) 208-8800
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Item 2. Acquisition or Disposition of Assets
On May 15, 1998, Lyondell Petrochemical Company ("Lyondell"), Millennium
Chemicals Inc. ("Millennium"), Occidental Petroleum Corporation ("Occidental")
and Equistar Chemicals, LP, a Delaware limited partnership ("Equistar"),
consummated a series of transactions to expand Equistar through the addition of
certain Occidental petrochemical assets. Equistar, which was formed December 1,
1997, initially comprised the olefins and polymers businesses of Lyondell and
Millennium.
These contributed Occidental assets include the ethylene, propylene and
ethylene oxide ("EO") and derivatives businesses and certain pipeline assets
held by Oxy Petrochemicals Inc. ("Oxy Petrochemicals"), a 50 percent interest in
a joint venture between PDG Chemical Inc. ("PDG Chemical") and E. I. DuPont de
Nemours & Co., and a leasehold interest in assets of Occidental Chemical
Corporation ("Occidental Chemical") (collectively, the "Occidental Contributed
Business"). Occidental Chemical, Oxy Petrochemicals and PDG Chemical are all
wholly-owned, indirect subsidiaries of Occidental. The Occidental Contributed
Businesses included olefins plants at Corpus Christi and Chocolate Bayou, Texas;
EO/ethylene glycol ("EG") and EG derivatives businesses located at Bayport,
Texas, Occidental's 50 percent ownership of PD Glycol, which operated EO/EG
plants at Beaumont, Texas, and 950 miles of owned and leased ethylene/propylene
pipelines. In addition, Occidental Chemical leased to Equistar its Lake Charles,
Louisiana olefins plant and related pipelines.
In a series of transactions effective May 15, 1998, including asset
contributions and assignments, a merger and the lease of certain assets to
Equistar, the Occidental Contributed Business was transferred to Equistar. In
exchange for the Occidental Contributed Business, two subsidiaries of Occidental
were admitted as limited partners and a third subsidiary was admitted as a
general partner in Equistar for an aggregate partnership interest of 29.5
percent (the "Occidental Interest"). With the completion of the transaction,
Lyondell holds a 41 percent ownership interest in Equistar and Millennium and
Occidental each hold a 29.5 percent ownership interest through their respective
subsidiaries. In addition, Equistar assumed approximately $205 million of
Occidental indebtedness and Equistar issued a promissory note to an Occidental
subsidiary for approximately $420 million. It is currently anticipated that the
note will be repaid with proceeds of a financing expected to be consummated by
Equistar next month.
In connection with the contribution of the Occidental Contributed
Business and the reduction of Millennium and Lyondell's original ownership
interests in Equistar, Equistar also issued a promissory note to the Millennium
subsidiary that is a limited partner in Equistar
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for approximately $75 million.
The consideration paid for the Occidental Contributed Business was
determined based upon arms-length negotiations among Lyondell, Millennium and
Occidental.
In connection with these transactions, Equistar and Occidental also
entered into a long-term agreement for Equistar to supply the ethylene
requirements for certain U.S. facilities of Occidental Chemical.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
1. To be filed by amendment.*
(b) Pro forma financial information.
1. Pro forma information with respect to the acquisition of the
Occidental Interest in Equistar to be filed by amendment.*
2. The pro forma information with respect to the disposition of the
Occidental Contributed Business is incorporated by reference from the pro forma
information included in Occidental's Current Report on Form 8-K, dated February
10, 1998, which was filed with the SEC on April 21, 1998. Although the
principal purpose of such report was to complete Occidental's filing obligations
with respect to the acquisition of the interest in the Elk Hills Naval Petroleum
Reserve, in connection with the preparation of the pro forma financial
statements reflecting such acquisition, Occidental has also provided disclosure
therein of other recent developments which may materially impact Occidental's
financial statements.
(c) Exhibits.
10.1 Master Transaction Agreement, dated May 15, 1998 (the
"Closing Date"), by and among Equistar Chemicals, LP ("Equistar"), Occidental
Petroleum Corporation ("OPC"), Lyondell Petrochemical Company ("Lyondell") and
Millennium Chemicals Inc. ("Millennium").
10.2 Amended and Restated Limited Partnership Agreement of Equistar,
dated the Closing Date, by and among the partners named therein.
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* Financial statements and pro forma information with respect to the acquisition
of the Occidental Interest in Equistar are to be filed by amendment not later
than 75 days after consummation of the acquisition.
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10.3 Agreement and Plan of Merger and Asset Contribution, dated as of
the Closing Date, by and among Equistar, Occidental Petrochem Partner 1, Inc.,
Occidental Petrochem Partner 2, Inc., Oxy Petrochemicals Inc. and PDG Chemical
Inc.
10.4 Amended and Restated Parent Agreement, dated as of the Closing
Date, among Occidental Chemical Corporation, Oxy CH Corporation, OPC,
Lyondell, Millennium and Equistar.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OCCIDENTAL PETROLEUM CORPORATION
(Registrant)
DATE: May 29, 1998 S. P. Dominick, Jr.
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S. P. Dominick, Jr., Vice President
and Controller
(Chief Accounting and Duly Authorized
Officer)
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INDEX TO EXHIBITS
EXHIBITS
10.1 Master Transaction Agreement, dated May 15, 1998 (the "Closing
Date"), by and among Equistar Chemicals, LP ("Equistar"),
Occidental Petroleum Corporation ("OPC"), Lyondell Petrochemical
Company ("Lyondell") and Millennium Chemicals Inc. ("Millennium").
10.2 Amended and Restated Limited Partnership Agreement of Equistar,
dated the Closing Date, by and among the partners named therein.
10.3 Agreement and Plan of Merger and Asset Contribution, dated as of
the Closing Date, by and among Equistar, Occidental Petrochem
Partner 1, Inc., Occidental Petrochem Partner 2, Inc., Oxy
Petrochemicals Inc. and PDG Chemical Inc.
10.4 Amended and Restated Parent Agreement, dated as of the Closing
Date, among Occidental Chemical Corporation, Oxy CH Corporation,
OPC, Lyondell, Millennium and Equistar.
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