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Liam Denning

Buying Occidental Isn't Warren Buffett's Only Option

The Berkshire Hathaway CEO has multiple ways to benefit from his stake in the oil company.

Keeping his options open.

Keeping his options open.

Photographer: Houston Cofield/Bloomberg

Warren Buffett turned Occidental Petroleum Corp. into the sort of company he could love by helping it dig its own hole. You can read the history of that here. It turns out his ardor is even fiercer than it appeared. With Berkshire Hathaway Inc. owning more than a fifth of Oxy already, a filing published by the Federal Energy Regulatory Commission on Friday afternoon disclosed that Buffett’s company had applied for permission to buy up to half.

Given parallels to Berkshire’s piecemeal takeover of the Burlington Northern Santa Fe railroad in 2009-10, dreams that Oxy is about to become BOxy helped push the stock up 10% on Friday. At just over four times forecast cash flow, Oxy’s relative valuation is almost back to where it was before the ill-timed Anadarko Petroleum Corp. bidding war — in which Buffett played a vital part — kicked off.