HOUSTON – Occidental Petroleum Corp. announced Friday that it is moving its corporate headquarters from Los Angeles to Houston, where hundreds of energy companies have their headquarters or major regional offices.
“Occidental Petroleum is the largest oil producer in Texas and one of the largest in the nation, so it seems only fitting the company would locate its headquarters in Houston, the Energy Capital of the World,” Texas Gov. Rick Perry said. “Oxy ranks 125 on the Fortune 500 list, and the company’s move is further evidence Texas has built the most dynamic, pro-growth economy in the nation.”
Since 1987 Occidental Petroleum has had its Houston offices in Greenway Plaza, a 4.3 million square foot business complex near the intersection of Buffalo Speedway and the Southwest Freeway. Cousins Properties purchased Greenway Plaza from Crescent Real Estate in a $1 billion deal last fall.
About a year ago, Occidental Oil & Gas renewed its lease in the Greenway Plaza, a massive 850,000-sf lease transaction engineered by Charles Gordon and Brandon Clarke of CBRE. At the time, landlord representative Bob Boykin said Occidental was the biggest tenant in the entire Crescent Real Estate portfolio – and Crescent is no small time player.
Occidental Petroleum’s headquarters will have about 200 employees and the HQ move will result in dozens of new jobs in Houston. Another California-based company, Chevron recently announced it was relocating 1,700 employees to Texas. California has been criticized by those who charge that it is not very business friendly.
Occidental Petroleum reportedly paid $284 million in California state, local and payroll taxes annually.
A large number of office building are being built in Houston to house energy firms, including Phillips 66, Southwestern Energy, Exxon Mobil and many more. Exxon Mobil is building a new campus, south of The Woodlands, with 20 buildings now under construction with more than 3 million square feet.
Occidental Petroleum will begin to focus more attention on the Permian Basin, a West Texas oil formation that is one of the richest oilfields in the world. With advances in drilling technology the Permian Basin is a hotbed of economic activity and jobs creation, even some new office buildings in Midland, a West Texas city that is a hub of commerce.
In the deal – announced Friday- Occidental Petroleum will spin off its California energy business into a separate company.
The new California company will have 8,000 employees and contractors and will establish its headquarters in the state. It will be California’s largest natural gas producer and the state’s largest oil and gas producer on a gross-operated barrels of oil equivalent basis. This new company will be the largest oil and gas mineral acreage holder in the state with 2.3 million net acres, and will have major operations in the state’s high-potential oil and gas basins, including Los Angeles, San Joaquin, Ventura and Sacramento. Last year the California business earned approximately $1.5 billion on a pre-tax basis.
Occidental Petroleum Corp., headquartered in Houston, will have exploration and production operations in the Permian Basin and other parts of Texas, the Middle East region and Colombia. It will also have a midstream and marketing segment and a chemical subsidiary, OxyChem. Each of these segments is a leader in its respective sector.
“Creating two separate energy companies will result in more focused businesses that will be competitive industry leaders,” said Stephen Chazen, President and Chief Executive Officer.