Reuters with Brian Kessens

Occidental CEO Vicki Hollub makes bold bid for rival shale producer

With a $38 billion bid on Wednesday for rival oil producer Anadarko Petroleum Corp, Occidental Petroleum Corp CEO Vicki Hollub has again grabbed the spotlight, as the oil and gas industry trailblazer squares off against Chevron Corp, a company four times Occidental’s size.
Hollub, the first woman to become chief executive officer of a major oil company, rose through the ranks after earning a degree in mineral engineering. She turned around a business that lost $1.09 billion in 2016 and last year tripled profit, to $4.1 billion.
By challenging Chevron for a takeover of Anadarko, she is betting she can convince investors that she is able to run a much bigger business. Anadarko has deep-water fields and is moving into liquefied natural gas, two areas where Occidental has no experience. Chevron offered $33 billion for Anadarko earlier this month.
Anadarko’s board said it would study the Occidental offer. Occidental and Chevron want Anadarko’s nearly quarter-million acres in the Permian Basin, the top U.S. shale field.
Many on Wall Street were stunned by the $76 per share bid which is valued at $57 billion including debt. KeyBanc Capital Markets downgraded Occidental stock to sector weight from overweight. Moody’s Investors Service placed Occidental’s ratings under review for possible downgrade.
“She’s staking a lot of the company’s and her reputation on a potential Oxy-Anadarko merger,” said Brian Kessens, portfolio manager at Tortoise Capital, which holds shares in an Anadarko pipeline business and in Chevron. He considers the Anadarko deal a kind of “merger of equals” compared to a potential takeover by the much larger Chevron.
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