Houston-based Occidental Petroleum is looking at selling its pipeline assets in an effort to free up $5 billion in capital which the company would invest in exploration and production. Dallas Morning News photo.
Occidental Petroleum hoping to cash in on higher oil prices
According to a report by Reuters, Occidental Petroleum is considering selling its pipeline assets. The company hopes the sale will be worth $5 billion, which will be used to fund exploration and production at a time when oil prices are recovering.
Should the sales go through, the Houston-based company would join Hess Corp and Oasis Petroleum, two companies that have sold or spun off pipelines in the past year.
Bottlenecks in pipelines in the Permian Basin are boosting the value of the crude pipelines and Oxy is hoping to cash in. As well, the company is hoping to get out from under the capital expenditures required to maintain US pipelines.
Reuters’ sources say the pipeline crunch in the Permian, the largest oilfield in the United States, along with rising US crude exports, could help Occidental sell its pipelines for top dollar.
At this time, the company is working with investment bankers on an auction of its pipeline assets, according to the sources.
Included in the midstream assets are a major US crude pipeline, a stake in a Middle Eastern gas pipeline, a crude export terminal in Texas, as well as the Centurion Pipeline. The Centurion is 2,900 miles long and transports Permian crude to Cushing, Oklahoma.
Last year, Oxy tried to sell its 50 per cent share of the Ingleside Energy Center, located in Corpus Christi, Texas. However, the sale did not happen and Occidental is including the crude storage and export terminal in its package of midstream assets, according to the Reuters’ sources.
Occidental officials did not respond to Reuters’ requests for comment.
Be the first to comment