OCCIDENTAL PETROLEUM CORP DE
For the period ended Dec 31, 2023. Filed Feb 14, 2024.
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FY2023 · Filed Feb 14, 2024
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Consolidated Results of Operations
MANAGEMENT’S DISCUSSION AND ANALYSIS
CONSOLIDATED RESULTS OF OPERATIONS
REVENUE AND OTHER INCOME ITEMS
| millions | 2023 | 2022 | 2021 |
|---|---|---|---|
| Net sales | $28,257 | $36,634 | $25,956 |
| Interest, dividends and other income | $139 | $153 | $166 |
| Gains on sale of assets, net | $522 | $308 | $192 |
NET SALES
Price and volume changes generally represent the majority of the change in the oil and gas and chemical segments sales. Midstream and marketing sales generally represent the margins earned by the marketing business as it strives to optimize the use of its transportation, storage and terminal commitments to provide access to domestic and international markets and, to a lesser extent, NGL and sulfur revenues from the gas processing business.
The decrease in net sales in 2023 compared to 2022 was primarily due to lower worldwide crude oil, domestic NGL and domestic natural gas commodity prices in the oil and gas segment, lower realized PVC and caustic sales prices and lower sales volumes across most product lines in the chemical segment and lower sales in the marketing business, partially offset by higher domestic sales volumes in the oil and gas segment.
EXPENSE ITEMS
| millions | 2023 | 2022 | 2021 |
|---|---|---|---|
| Oil and gas operating expense | $4,677 | $4,028 | $3,160 |
| Transportation and gathering expense | $1,481 | $1,475 | $1,419 |
| Chemical and midstream cost of sales | $3,116 | $3,273 | $2,772 |
| Purchased commodities | $2,009 | $3,287 | $2,308 |
| Selling, general and administrative | $1,083 | $945 | $863 |
| Other operating and non-operating expense | $1,084 | $1,271 | $1,065 |
| Taxes other than on income | $1,087 | $1,548 | $1,005 |
| Depreciation, depletion and amortization | $6,865 | $6,926 | $8,447 |
| Asset impairments and other charges | $209 | $— | $304 |
| Acquisition-related costs | $26 | $89 | $153 |
| Exploration expense | $441 | $216 | $252 |
| Interest and debt expense, net | $945 | $1,030 | $1,614 |
OIL AND GAS OPERATING EXPENSE
Oil and gas operating expense increased in 2023 compared to 2022, primarily as a result of higher workover and maintenance activity in Occidental’s domestic operations.
CHEMICAL AND MIDSTREAM COST OF SALES
Chemical and midstream cost of sales decreased in 2023 compared to 2022, primarily as a result of lower ethylene and energy cost in the chemical segment and lower power generation cost of sales in the midstream and marketing segment.
PURCHASED COMMODITIES
Purchased commodities decreased in 2023 compared to 2022, due to lower volumes and prices on third-party crude purchases in the midstream and marketing segment.
SELLING, GENERAL, AND ADMINISTRATIVE
Selling, General, and Administrative increased in 2023 compared to 2022, due to increased employee and technology costs.
OTHER OPERATING AND NON-OPERATING EXPENSE
Other operating and non-operating expense decreased in 2023 compared to 2022, primarily due to the $260 million adjustment of the valuation allowance for the Maxus Liquidating Trust.
MANAGEMENT’S DISCUSSION AND ANALYSIS
TAXES OTHER THAN ON INCOME
Taxes other than on income in 2023 decreased compared to 2022, primarily due to decreases in production taxes and Rockies ad valorem taxes, which are directly tied to revenues.
ASSET IMPAIRMENTS AND OTHER CHARGES
Asset impairments in 2023 included a pre-tax impairment of $180 million related to undeveloped acreage in the northern non-core area of the Powder River Basin and a $29 million impairment related to an equity method investment in the Black Butte Coal Company.
EXPLORATION EXPENSE
Exploration expense increased in 2023 compared to 2022, primarily due to higher dry hole expense in the Gulf of Mexico.
INTEREST AND DEBT EXPENSE, NET
Interest and debt expense decreased in 2023 compared to 2022, due to lower outstanding debt as a result of $9.5 billion of debt repayments in 2022, partially offset by early debt extinguishment costs incurred in 2022.
OTHER ITEMS
| Income (expense) millions | 2023 | 2022 | 2021 |
|---|---|---|---|
| Gains on interest rate swaps and warrants | $— | $317 | $122 |
| Income from equity investments and other | $534 | $793 | $631 |
| Income tax expense | $(1,733) | $(813) | $(915) |
| Loss from discontinued operations, net | $— | $— | $(468) |
INCOME FROM EQUITY INVESTMENTS AND OTHER
Income from equity investments and other decreased in 2023 compared to 2022, primarily due to lower equity income from WES and charges recorded by NET Power in relation to their public offering.
INCOME TAX EXPENSE
Income tax expense increased in 2023 compared to 2022, primarily as a result of a $2.7 billion tax benefit taken in 2022 related to a legal entity reorganization.
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