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Occidental to write down value of upstream assets by US$9 billion

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Oilfield Technology,

As reported by Reuters, Occidental Petroleum will write down the value of its oil and gas properties by up to US$9 billion this quarter and restructure some debts to avoid a possible default, the company said on Thursday.

The company is trying to shed nearly US$40 billion in debt from its purchase of rival Anadarko Petroleum last year.

The latest writedown stems from declining energy demand amid the Covid-19 pandemic and global glut that has oil trading 38% below what it cost in January. Occidental and many of its peers dismissed workers and cut budgets by billions of dollars as energy markets fell.

Occidental plans to replace US$9.12 billion in notes due in 2021 and 2022 and issue new notes that would remove provisions that could have pushed it into default.

This will be the third consecutive quarter in which Occidental takes a writedown, bringing the total to as much as US$12 billion in the last nine months, more than half of its market capitalisation.

Occidental recently set a 1 July deadline to accept bids for properties in Wyoming and Colorado that could bring up to US$700 million.

It cut its quarterly dividend last month to just a penny per share after having slashed it 86% in March to save cash.

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