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middle east and north africa
Forward-Looking StatementsStatements in this publication that contain words such as “will,” “expect” or “estimate,” or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could significantly affect expected results. Factors that could cause results to differ materially include, but are not limited to: exploration risks such as drilling of unsuccessful wells, global commodity pricing fluctuations and supply/demand considerations for oil, gas and chemicals; higher-than-expected costs; political risks; and not successfully completing (or any material delay in) any expansion, capital expenditure, acquisition, or disposition. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this publication. Unless legally required, Occidental does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise. Investors are urged to consider carefully the disclosure in Occidental’s Form 10-K, available through the following toll-free telephone number, 1-888-OXYPETE (1-888-699-7383) or on the Internet at www.oxy.com. You also can obtain a copy from the SEC by calling 1-800-SEC-0330.
Occidental Petroleum Corporation (OXY) is an international oil and gas exploration and production company as well as a major North American chemical manufacturer.
Occidental Petroleum Corporation
With operations in the United States, the Middle
East, North Africa and Latin America, Occidental
helps to meet the world’s energy needs. In the
Middle East and North Africa, Occidental has
major assets in Oman, Qatar, Libya, the United
Arab Emirates (U.A.E.) and Yemen. In the United
States, Occidental is the largest oil producer
in Texas and the largest natural gas producer
in California.
Occidental’s Latin American operations include
producing assets in Colombia, Argentina and
Bolivia. Occidental Chemical Corporation
manufactures vinyls, specialty chemical products
and basic chemicals, such as chlorine and caustic
soda — the building blocks for indispensable
products such as pharmaceuticals, water
disinfectants and detergents.
Clean, efficient and reliable energy supplies
are critical to the growth and development of
the global economy. Energy fuels the economic
expansion that provides jobs and improves
health care, education and living standards.
As the world’s energy demands grow, so does
the need for additional sources.
Occidental Petroleum Corporation has the
expertise and experience to find and develop
new sources of oil and natural gas today to
fuel tomorrow’s economic growth — without
compromising its strong commitment to protecting
the environment, upholding high standards of
social responsibility and safeguarding the health
and safety of employees and neighbors.
Occidental Development CompanyMezzanine Floor, Crescent Towers
Zayed the 1st Street
Abu Dhabi, United Arab Emirates
Occidental Petroleum Corporation10889 Wilshire Boulevard
Los Angeles, California 90024-4201 USA
www.oxy.com
Cover: Oxy’s operation in Oman’s Safah Field. Oxy’s first project in Oman incorporated technological skills and regional expertise which resulted in a successful partnership that thrives today.
This page: A Dolphin Energy Limited drilling rig in Qatar’s North Field. Oxy is a 24.5-percent interest partner in this premier transborder energy project that became operational in July 2007.
Elk Hills Long Beach Permian Basin Mid-Continent Colombia Bolivia Argentina
Libya YemenBahrain Oman United Arab Emirates Qatar
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Occidental Petroleum Corporation has been an active investor in
the Middle East and North Africa for four decades. The company’s
first venture into international exploration resulted in a number of
giant discoveries in Libya in the 1960s.
Regional Experience and Expertise
Since then, Occidental has expanded its presence
in the Middle East with operations in the U.A.E.,
Qatar, Oman, Yemen and Bahrain. Collectively,
Occidental’s assets in the region account for roughly
22 percent of the company’s worldwide production.
Lending technical expertise to develop the
region’s rich resources, recognizing the importance
of hiring local employees and respecting local
customs are integral elements of Oxy’s growth
strategy.
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Dolphin ProjectOccidental is a partner in the Dolphin Project, one of the world’s premier transborder energy projects. In July 2007, the Dolphin Project became operational, delivering natural gas from Qatar’s North Field to customers in the U.A.E. As one of the largest energy initiatives undertaken in the Middle East, the Dolphin Project is expected to have a significant impact on the region’s development and to be a steady contributor to Oxy’s financial performance over the next 25 years.
The project’s scope included drilling more than 24 wells in the Khuff Zone of Qatar’s North Field, one of the world’s largest gas reservoirs. These wells
produce natural gas and associated natural gas liquids. The liquids are separated from the gas stream at Dolphin’s gas processing plant in Ras Laffan, Qatar, one of the largest facilities of its kind in the world. The processed gas is transported through a 48-inch, 370-kilometer long subsea pipeline to the Taweelah receiving facility in the U.A.E. Supplying gas to the U.A.E. and in the near future to Oman, Dolphin Energy Limited will initially transport approximately two billion cubic feet per day.
QatarOxy’s success in Qatar helped establish Oxy as one of the world’s premier companies in enhanced oil recovery from mature fields. Since taking over operation of the offshore Idd El Shargi North Dome (ISND) oil field, Oxy has reversed nearly 25 years of steadily declining production. The field went into production in 1963 and peaked at 50,000 barrels per day in 1970. When Oxy took over the operation in 1994, average daily production had fallen to less than 20,000 barrels. With the application of advanced drilling systems and new technologies, Oxy was able to boost production to a rate of 120,000 barrels per day, more than double the previous record.
Today, the ISND field has an estimated 4 billion barrels of oil remaining in place.* Through the
application of waterfloods, innovative drilling techniques and state-of-the-art reservoir characterization, Oxy is maximizing recovery rates and adding new reserves. In 2005, Oxy added major new processing facilities to the existing PS-1 offshore platform doubling the fluid handling capacity. The platform addition is a remarkable technical achievement that has enabled Oxy to increase power generation five-fold and more than double gas compression, water injection and separation capacity.
Oxy’s successful redevelopment of ISND resulted in the Government of Qatar awarding Oxy a second production sharing contract covering the Idd El Shargi South Dome (ISSD) field, 24 kilometers south of ISND.
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Ras Laffan: Natural Gas Processing Plant
The Dolphin Project natural gas produced in Qatar’s North Field is processed at this massive 1 kilometer by 2 kilometer gas plant in Ras Laffan, Qatar.
ISND & ISSD: Enhanced Oil Recovery
1 The Idd El Shargi North Dome Field (ISND) is located 80 kilometers to the east of the Qatar peninsula in 32 meters of water and today contains an estimated 4 billion barrels of oil in place.*
2 The Idd El Shargi South Dome Field (ISSD) is a satellite facility located about 24 kilometers to the south of ISND.
This diagram depicts the dome structures that trap the oil and two of the seven producing reservoirs. The ISND field had historically experienced a low recovery rate because of the field’s complex geology. Oxy’s enhanced recovery effort is aggressively developing the field through waterflooding, innovative drilling techniques and state-of- the-art reservoir characterization.
* The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the commission, to disclose only proved reserves demonstrated by actual production or conclusive formation tests to be economically producible under existing economic and operating conditions. The commission’s guidelines strictly prohibit using “oil in place” and “recoverable reserves” in filings with it.
Oman
Taweelah
Dubai
Fujairah
Al Ain
OmanU.A.E.Dolphin Project Gas Pipeline
Ras Laffan
ISND & ISSD
Doha
Abu Dhabi
Qatar
Oman
United Arab Emirates
Qatar
Bahrain
Yemen
Libya
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Libya
Occidental’s prominent presence in Libya, with
approximately 121,400 square kilometers of
exploration and production areas, makes Oxy the
country’s largest net oil and gas acreage holder.
Oxy was the first U.S. company to resume oil
operations in Libya after sanctions were lifted.
In July 2005, Oxy reentered its historic producing
areas after a 19-year absence and began
applying new technology and oil recovery
expertise to enhance production.
Libya is one of the world’s most attractive
international exploration regions. Oxy
geoscientists are conducting a major exploration
program — the largest in the company’s
history — to search for new oil and gas fields.
In January 2005, Oxy dominated Libya’s first
post-sanction exploration licensing round,
winning nine of 15 exploration blocks up for bid.
Of these new exploration blocks, Oxy is operator
and holds a 90-percent working interest in five
onshore areas and was awarded a 35-percent
working interest in four offshore areas. It also
holds a 100-percent working interest in four
additional exploration blocks. A massive seismic
program is underway and Oxy is drilling numerous
exploration wells in Libya.
Oman
Oxy’s development work over the past few years
in Oman illustrates the company’s commitment to
enhancing Oman’s diverse oil and gas resources.
Through successful enhanced oil recovery methods,
extensive 3-D seismic surveying and an 85-percent
exploration drilling success rate, Oxy has increased
its production, reserves and scope of operations
over its more than 25-year tenure in Oman. Oxy
operates Blocks 9 and 27 in northern Oman and
the giant Mukhaizna Oil Field in Block 53 in south-
central Oman. In 2006, Oxy added exploration
Block 54, which is located adjacent to the
Mukhaizna infrastructure.
Oxy began operating Block 9, also known as the
Safah Field, in 1984. In 2004 Oxy and the Omani
government built new infrastructure to market
110 to 120 million cubic feet per day of previously
stranded gas from Block 9.
In 2005, Oxy took over operation of the Mukhaizna
field, one of the largest in Oman. Oxy and its
partners are implementing an aggressive drilling
and development program, including a large-scale
steam flood project to fully develop the field’s
enormous heavy oil resources. The goal is to
increase production 17-fold from 8,500 barrels
per day to 150,000 barrels per day within the
next few years. Approximately one billion barrels
of oil are expected to be recovered over the life
of the project.*
In June of 2006, Oxy initiated production in
Block 27, just nine months after the government
declared the field commercial and three months
ahead of target. Additional exploration and
production wells are being drilled.
Oxy is currently pursuing several new exploration
and development projects in cooperation with
the Omani government.
Tripoli 35
52 53
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124
59
NC29
NC144
NC145
NC74
NC150
103102NC143
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927
53 54
Yemen
Oxy is one of the most active companies in
Yemen with significant interests in both of the
major oil and gas production regions. The
company holds a 38-percent working interest in
the giant Masila Block (Block 14) where some of
the world’s largest oil discoveries were made in
the 1990s. Oxy also holds a 40-percent interest
in the adjacent East Shabwa Block (Block 10).
In 2005, Oxy was awarded a new exploration
area, Block 75, and in 2006, the company
acquired the S-1 Block as a part of its acquisition
of Vintage Petroleum.
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Oxy’s massive seismic surveying project is underway in Libya. The Libya exploration project is the largest in Oxy’s history.
In 2005, Oxy took over operations of the Mukhaizna field, one of the largest in Oman.
Oxy is drilling numerous exploration wells in Yemen with potential to expand operations.
Muscat
Qatar
Oman
U.A.E.
Yemen
Libya
10 14
S-175 20
Yemen
exploration areas historic producing areas
* The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the commission, to disclose only proved reserves demonstrated by actual production or conclusive formation tests to be economically producible under existing economic and operating conditions. The commission’s guidelines strictly prohibit using “oil in place” and “recoverable reserves” in filings with it.
Oxy Libya’s Protocol Affairs Manager, Leila Elkial, helps raise staff awareness and understanding of culture and history at the beautifully preserved Roman ruins of Sabratha on the Mediterranean Sea in Libya.
Oxy works with the Royal Oman Police, The Ministry of Education and Oman TV to promote the “Oman Safe Driving Program.”
Social Responsibility
Serving as a good neighbor is crucial to Oxy’s
core values and an integral part of its management
philosophy. Strong environmental safety and social
programs minimize risk, enhance the company’s
reputation and improve Oxy’s financial and
operational performance.
Environment and Safety Performance
A fundamental element of Occidental’s success is
its health, environment and safety (HES) protection
management system. This system includes using
design procedures, work practices and employee
training to prevent incidents; correcting and
improving operating conditions that could have an
adverse impact on HES; reducing pollutants;
improving the efficiency of energy use; and
maintaining an ongoing dialogue with neighboring
communities about HES concerns. Oxy holds an
industry-leading position in maintaining the safety
of employees, assets and the environment.
Developing Expertise in Our International Workforce
Occidental has an ongoing comprehensive
program to hire and train national employees
for jobs in all professional and operational
disciplines. This is critical for emerging countries
striving to enhance their economic development
and technical expertise.
For example, Oxy Oman’s “Omanization” program
has increased the number of Omani employees
at established operations to 89 percent, up from
only five employees in 1984. Omani employees
work at all levels of the company, from executive
management to entry-level positions. These
programs have helped transfer technical expertise
to the national workforces, and provide excellent
local employment opportunities.
Occidental Petroleum Corporation is committed to being an outstanding and responsible corporate citizen as we strive for continual improvement in our worldwide Health, Environment and Safety (HES) systems and Social Responsibility performance.
Oxy Oman’s Sadiq Al-Lawati, Vice President — Health, Environment and Safety, and Najeeb Al Harthy, Vice President for B9 and B27 operations.
Maximizing Ultimate Recovery
Oxy is a proven leader in cost-effectively increasing production from mature oil and gas fields and extracting value from opportunities overlooked by competitors. Companies and host governments seeking technical collaboration on challenging projects have found Oxy to be a responsive and innovative partner.
Branching Out
Oxy has earned a reputation as an industry leader in horizontal drilling. Horizontal drilling involves drilling a
well at an incline greater than 75 degrees, to access oil and gas reserves that would be difficult to reach
with a vertical well. These wells are first drilled vertically to a predetermined depth, and then gradually
curved to reach the target zone.
Horizontal wells are advantageous for numerous reasons: to improve recovery rates by increasing exposure
to thin pay zones; to avoid sensitive environmental areas or surface obstacles; or to drill several wells from
a single location, particularly for offshore drilling.
This illustration depicts a multilateral horizontal well in Oxy Oman’s Safah Field. These advanced wells allow Oxy to target thin pay zones in the oil producing Shuaiba reservoir and to produce concurrently from two intervals using a single wellbore.
Dolphin Energy Limited is sponsoring a study of the coral reefs between Abu Dhabi and Qatar to gather data for a conservation plan.
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Delivering Results
Occidental’s success in the Middle East and around the world is built on sound business skills, exploration and development expertise, application of innovative technology and the acquisition of strategic assets.
Occidental has used these skills to build a
reputation for completing projects on time
and within budget, while simultaneously
maintaining a strong commitment to health,
the environment and safety, and the highest
standards of ethical conduct. Oxy continuously
pursues new opportunities to enhance value
for the countries where it operates, and has the
experience, expertise and drive to deliver results.
Occidental’s success in Qatar helped establish us as one of the world’s premier companies in enhancing recovery from mature fields through the application of appropriate technology and advanced reservoir characterization techniques.
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Oman