Occidental Petroleum Corp. of Los Angeles is reviewing itsinvestment in Canadian Occidental Petroleum Ltd. and consideringall options, the company said. Oxy’s investment in CanadianOxy ofCalgary dates back to 1971, and Occidental currently owns 40.2million shares, or about 29%, of the company’s outstanding commonshares.

In response to Oxy’s announcement, CanadianOxy’s board formed anindependent committee to consider proposals that may be receivedfrom Occidental or a third party. The committee is recommendingimplementation of a shareholder rights plan.

In January CanadianOxy said it laid off 112 staffers in acorporate restructuring due to the sale of more than a billiondollars of non-core assets, as well as reduced capital investmentin response to low oil prices. The layoffs included 66 staff inCalgary. Over the previous two years, CanadianOxy had sold assetsworldwide, including significant dispositions in Canada. As aresult, the Canadian division held a review of operations andprocesses.

CanadianOxy sold oil and gas properties worth $370 million inorder to take the bite out of low commodity prices, the companysaid in December 1998, bringing its 1998 property sales to $630million. The company did not disclose who bought the properties. Anadditional $235 million of sales were expected before the end ofJanuary 1999. Properties in Canada and the United Kingdom wereincluded in the sale. The Canadian assets were located in northeastBritish Columbia, west central Alberta, and northeast Alberta. Thelands produce 125 MMcf/d of gas and 6,000 b/d, and proved reservestotal 290 Bcf of gas and 20 million barrels of oil annually.

“By the time the last of these dispositions close in January1999, our long-term debt will be about $1.9 billion, credit lineswill be replenished, and we’ll be in good shape to weathervolatility in commodity prices,” Marv Romanow, CanadianOxy’s chieffinancial officer, said at the time. “We will be drilling a numberof prospects in 1999 which could require significant follow-upcapital. And if this environment persists, we expect to seeattractive opportunities to add to our portfolio.”

Joe Fisher, Houston

©Copyright 1999 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.