Occidental Petroleum, a significant player in the energy industry, is reportedly considering selling Western Midstream Partners, a pipeline operator with a focus on natural gas, valued at nearly $20 billion, including its debt.
The potential sale is aimed at easing Occidental’s substantial debt burden, which has grown due to recent acquisitions, notably the $12 billion acquisition of CrownRock in December.
Insiders familiar with the situation disclosed that Occidental’s decision to divest Western Midstream is part of a larger strategy to streamline its operations and lessen its debt load. Occidental’s series of acquisitions, including the $54 billion takeover of Anadarko Petroleum four years ago, has considerably increased its debt, necessitating asset sales to restore financial stability.
In discussing Occidental’s strategy to reduce debt, a company spokesperson underscored the significance of shedding non-core assets to achieve its objective of lowering debt to less than $15 billion.
The successful completion of the CrownRock transaction holds importance for Occidental’s plans, potentially influencing its determination regarding the sale of Western Midstream.
Despite Occidental’s debt-related concerns, the possibility of Western Midstream’s sale has piqued investor interest, with shares of the pipeline operator rising by 5.7 percent upon the news.
However, Occidental’s stock experienced a slight dip amid broader downturns affecting energy producers.
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