Oxy Bulks Up on Low-Cost U.S. Oil Production

For nearly two decades, Occidental Petroleum Corp. (OXY) has been bulking up in producing oil in the U.S., exploiting low-cost opportunities while its competitors look abroad.

While Occidental, the fourth-largest U.S. oil and gas company by market value, has also made significant investments in the Middle East and in Latin America, the company has remained committed to keeping most of its reserves inside U.S. borders.

That’s a marked change from 1990 when Occidental produced little oil and gas from U.S. sources. Now, production in the U.S. accounts for 70% of Occidental’s reserves of about three billion barrels of oil equivalent — the largest percentage of any major oil company. Occidental has built up those reserves by finding opportunities onshore and away from headline-grabbing — and often expensive — new oil and gas finds in the U.S.

This year, the company will drill 20 exploratory oil wells to tap neglected reservoirs in California, where it has 1.1 million acres. That’s the largest position in the state and one that may eventually add more than 5% to Occidental’s reserves.

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