February 2020, Vol. 247, No. 2
Global News
Oxy Separates Western Midstream in Debt-Reduction Move
Occidental Petroleum (Oxy) said it will make its Western Midstream (WES) business a standalone company, shedding $7.8 billion in debt through its separation of the former Anadarko pipeline business.
Oxy’s announcement capped months of expectation that it might sell the midstream business, and its decision may indicate that it failed to attract a suitable offer during a challenging period for the industry.
“Over the last few months, Occidental and WES have worked to finalize agreements beneficial to both companies that establish WES as an independent midstream company capable of successfully competing for third-party business in its core areas of operation,” said President and CEO Vicki Hollub. “We believe that our shareholders and WES’s unitholders are positioned to benefit from these new agreements.”
The transition was accomplished through a series of agreements that enable WES to operate as an independent midstream company to support. The management team transferred employment from Oxy to Western.
Oxy said it will reduce its holdings in Western Midstream Partners to less than 50% by the end of this year but expects to maintain a significant economic interest in the company.
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