Occidental Counts the Cost of Its Thwarted Permian Oil Ambitions
- Slump in production means it has too much pipeline capacity
- Midstream division expects to post $750 million loss in 2021
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The decline in Occidental Petroleum Corp.’s oil production in the Permian Basin has left the company with so much unused capacity on pipelines to the Gulf Coast that the problem will drive a midstream loss of as much as $750 million this year.
Occidental said Tuesday that total Permian production is expected to be about 485,000 barrels of oil equivalent a day this year, well short of the 800,000 barrels of pipeline space it’s committed to. That means the company needs to buy the balance elsewhere, adding to costs.