Edgar Filing: OCCIDENTAL PETROLEUM CORP /DE/

form10k-2010.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

R Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934			£ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2010			For the transition period from to

Commission File Number 1-9210

Occidental Petroleum Corporation

(Exact name of registrant as specified in its charter)

State or other jurisdiction of incorporation or organization			Delaware
I.R.S. Employer Identification No.			95-4035997
Address of principal executive offices			10889 Wilshire Blvd., Los Angeles, CA
Zip Code			90024
Registrant's telephone number, including area code			(310) 208-8800

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class			Name of Each Exchange on Which Registered
9 1/4% Senior Debentures due 2019			New York Stock Exchange
Common Stock			New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. R YES £ NO

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act: (Note: Checking the box will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections). £ YES R NO

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. R YES £ NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period as the registrant was required to submit and post files). R YES £ NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. R

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. (See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act).

Large Accelerated Filer R Accelerated Filer £

Non-Accelerated Filer £ Smaller Reporting Company £

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). £ YES R NO

The aggregate market value of the voting common stock held by nonaffiliates of the registrant was approximately $61.85 billion, computed by reference to the closing price on the New York Stock Exchange composite tape of $77.15 per share of Common Stock on June 30, 2010. Shares of Common Stock held by each executive officer and director have been excluded from this computation in that such persons may be deemed to be affiliates. This determination of potential affiliate status is not a conclusive determination for other purposes.

At January 31, 2011, there were 812,849,169 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement, filed in connection with its May 6, 2011, Annual Meeting of Stockholders, are incorporated by reference into Part III.

TABLE OF CONTENTS
		Page
Part I
Items 1 and 2	Business and Properties	3
	General	3
	Oil and Gas Operations	3
	Chemical Operations	4
	Midstream, Marketing and Other Operations	5
	Capital Expenditures	5
	Employees	5
	Environmental Regulation	5
	Available Information	5
Item 1A	Risk Factors	6
Item 1B	Unresolved Staff Comments	7
Item 3	Legal Proceedings	7
	Executive Officers	8
Part II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	9
Item 6	Selected Financial Data	11
Item 7 and 7A	Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)	11
	Strategy	11
	Oil and Gas Segment	14
	Chemical Segment	19
	Midstream, Marketing and Other Segment	20
	Segment Results of Operations	21
	Significant Items Affecting Earnings	23
	Taxes	23
	Consolidated Results of Operations	23
	Consolidated Analysis of Financial Position	25
	Liquidity and Capital Resources	25
	Off-Balance-Sheet Arrangements	27
	Contractual Obligations	27
	Lawsuits, Claims, Commitments, Contingencies and Related Matters	28
	Environmental Liabilities and Expenditures	28
	Foreign Investments	29
	Critical Accounting Policies and Estimates	29
	Significant Accounting and Disclosure Changes	33
	Derivative Activities and Market Risk	33
	Safe Harbor Discussion Regarding Outlook and Other Forward-Looking Data	35
Item 8	Financial Statements and Supplementary Data	36
	Management's Annual Assessment of and Report on Internal Control Over Financial Reporting	36
	Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements	37
	Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting	38
	Consolidated Statements of Income	39
	Consolidated Balance Sheets	40
	Consolidated Statements of Stockholders’ Equity	42
	Consolidated Statements of Comprehensive Income	42
	Consolidated Statements of Cash Flows	43
	Notes to Consolidated Financial Statements	44
	Quarterly Financial Data (Unaudited)	71
	Supplemental Oil and Gas Information (Unaudited)	73
	Financial Statement Schedule:
	Schedule II – Valuation and Qualifying Accounts	84
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	85
Item 9A	Controls and Procedures	85
	Disclosure Controls and Procedures	85
Part III
Item 10	Directors, Executive Officers and Corporate Governance	85
Item 11	Executive Compensation	85
Item 12	Security Ownership of Certain Beneficial Owners and Management	85
Item 13	Certain Relationships and Related Transactions and Director Independence	85
Item 14	Principal Accountant Fees and Services	85

Part IV
Item 15	Exhibits and Financial Statement Schedules	86

Part I

Items 1 And 2 Business and Properties

In this report, "Occidental" refers to Occidental Petroleum Corporation, a Delaware corporation (OPC), and/or one or more entities in which it owns a majority voting interest (subsidiaries). Occidental conducts its operations through various subsidiaries and affiliates. Occidental’s executive offices are located at 10889 Wilshire Boulevard, Los Angeles, California 90024; telephone (310) 208-8800.

General

Occidental’s principal businesses consist of three segments. The oil and gas segment explores for, develops, produces and markets crude oil, including natural gas liquids (NGLs) and condensate (together with NGLs, "liquids"), as well as natural gas. The chemical segment (OxyChem) manufactures and markets basic chemicals, vinyls and other chemicals. The midstream, marketing and other segment (midstream and marketing) gathers, treats, processes, transports, stores, purchases and markets crude oil, liquids, natural gas, carbon dioxide (CO2) and power. It also trades around its assets, including pipelines and storage capacity, and trades oil and gas, other commodities and commodity-related securities. Unless otherwise indicated hereafter, discussion of oil or oil and liquids refers to crude oil, NGLs and condensate.

For information regarding Occidental's current developments, segments and geographic areas, see the information in the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" (MD&A) section of this report and Note 16 to the Consolidated Financial Statements.

Oil and Gas Operations

General

Occidental’s domestic oil and gas operations are mainly located in Texas, New Mexico, California, Kansas, Oklahoma, Utah, Colorado, North Dakota and West Virginia. International operations are located in Bahrain, Bolivia, Colombia, Iraq, Libya, Oman, Qatar, the United Arab Emirates (UAE) and Yemen. Occidental has classified its Argentine operations as held for sale on a retrospective application basis.

Proved Reserves and Sales Volumes

The table below shows Occidental’s total oil and natural gas proved reserves and sales volumes in 2010, 2009 and 2008. See "MD&A — Oil and Gas Segment," and the information under the caption "Supplemental Oil and Gas Information" for certain details regarding Occidental’s oil and gas proved reserves, the reserves estimation process, sales volumes, production costs and other reserves-related data.

Comparative Oil and Gas Proved Reserves and Sales Volumes
Oil in millions of barrels; natural gas in billions of cubic feet; barrels of oil equivalent (BOE) in millions of barrels of oil equivalent
	2010					2009					2008
Proved Reserves	Oil	(a)	Gas	BOE	(b)	Oil	(a)	Gas	BOE	(b)	Oil	(a)	Gas	BOE	(b)
United States	1,697		3,034	2,203		1,606		2,799	2,072		1,547		3,153	2,073
International	613	(c)	2,104	964	(c)	657	(d)	2,228	1,028	(d)	533	(d)	1,299	749	(d)
Continuing Operations	2,310		5,138	3,167		2,263		5,027	3,100		2,080		4,452	2,822
Held for Sale (e)	166		182	196		108		130	130		135		149	160
Total	2,476		5,320	3,363	(f)	2,371		5,157	3,230	(f)	2,215		4,601	2,982	(f)
Sales Volumes
United States	99		247	140		99		232	137		96		215	132
International	88	(d)	172	117	(d)	69	(d)	95	85	(d)	63	(d)	84	77	(d)
Continuing Operations	187		419	257		168		327	222		159		299	209
Held for Sale (e)	14		12	16		13		11	15		12		8	13
Total	201		431	273		181		338	237		171		307	222

(a)	Includes NGLs and condensate.
(b)	Natural gas volumes have been converted to BOE based on energy content of six thousand cubic feet (Mcf) of gas to one barrel of oil.
(c)	Excludes the former noncontrolling interest in a Colombian subsidiary because on December 31, 2010, Occidental restructured its Colombian operations to take a direct working interest in the related assets.
(d)	Includes the noncontrolling interest in a Colombian subsidiary.
(e)	Occidental has classified its Argentine operations as held for sale.
(f)	Stated on a net basis after applicable royalties. Includes proved reserves related to production-sharing contracts (PSCs) and other similar economic arrangements of 1.1 billion BOE in 2010, 1.1 billion BOE in 2009 and 825 million BOE in 2008.

Competition and Sales and Marketing

As a producer of oil and natural gas, Occidental competes with numerous other domestic and foreign private and government producers. Oil and natural gas are commodities that are sensitive to prevailing global and, in certain cases local, current and anticipated market conditions. They are sold at current market prices or on a forward basis to refiners and other market participants. Occidental competes by developing and producing its worldwide oil and gas reserves cost-effectively and acquiring rights to explore, develop and produce in areas with known oil and gas deposits. Occidental also competes by increasing production through enhanced oil recovery projects in mature and underdeveloped fields and making strategic acquisitions.

Chemical Operations

OxyChem owns and operates manufacturing plants at 22 domestic sites in Alabama, Georgia, Illinois, Kansas, Louisiana, Michigan, New Jersey, New York, Ohio, Pennsylvania and Texas and at two international sites in Canada and Chile and has interests in a Brazilian joint venture. OxyChem produces the following products:

Principal Products	Major Uses	Annual Capacity
Basic Chemicals
Chlorine	Chlorovinyl chain and water treatment		4.0 million tons (a)
Caustic Soda	Pulp, paper and aluminum production		4.2 million tons (a)
Chlorinated organics	Silicones, paint stripping, pharmaceuticals and refrigerants		0.9 billion pounds
Potassium chemicals	Glass, fertilizers, cleaning products and rubber		0.4 million tons
Ethylene dichloride (EDC)	Raw material for vinyl chloride monomer (VCM)		2.4 billion pounds (a)
Vinyls
VCM	Precursor for polyvinyl chloride (PVC)		6.2 billion pounds
PVC	Piping, medical, building materials and automotive products		3.7 billion pounds
Other Chemicals
Chlorinated isocyanurates	Swimming pool sanitation and disinfecting products		131 million pounds
Resorcinol	Tire manufacture, wood adhesives and flame retardant synergist		50 million pounds
Sodium silicates	Soaps, detergents and paint pigments		0.6 million tons
Calcium chloride	Ice melting, dust control, road stabilization and oil field services		0.7 million tons

(a)	Includes gross capacity of a joint venture in Brazil, owned 50 percent by Occidental.

Midstream, Marketing and Other Operations

The midstream and marketing operations are conducted in the locations described below:

Location	Description	Capacity
Gas Plants
California, Colorado and Permian Basin	Occidental-operated and third-party-operated gas gathering, treating, compression and processing systems, and CO2 processing	2.5 billion cubic feet per day
Pipelines
Permian Basin and Oklahoma	Common carrier oil pipeline and storage system	365,000 barrels of oil per day 5.8 million barrels of oil storage 2,700 miles of pipeline
Colorado, New Mexico and Texas - CO2 fields and pipelines	CO2 fields and pipeline systems transporting CO2 to oil and gas producing locations	1.625 billion cubic feet per day
Dolphin Pipeline - Qatar and United Arab Emirates	24.5% equity investment in a natural gas pipeline	3.2 billion cubic feet of natural gas per day (a)
Western and Southern United States and Canada	Minority investment in entity involved in pipeline transportation, storage, terminalling and marketing of oil, gas and related petroleum products	16,000 miles of pipeline and gathering systems (b) 92 million barrels of oil and other petroleum products and 50 billion cubic feet of natural gas storage (b)
Marketing and Trading
Texas, Connecticut, United Kingdom, Singapore and other	Trades around its assets and purchases, markets and trades oil, gas, power, other commodities and commodity-related securities	Not applicable
Power Generation
California, Texas and Louisiana	Occidental-operated power and steam generation facilities	1,800 megawatts per hour and 1.6 million pounds of steam per hour

(a)	Capacity requires additional gas compression and customer contracts.
(b)	Amounts are gross, including interests held by third parties.

Capital Expenditures

For information on capital expenditures, see the information under the heading "Liquidity and Capital Resources — Capital Expenditures" in the MD&A section of this report.

Employees

Occidental employed approximately 11,000 people at December 31, 2010, 7,100 of whom were located in the United States. Occidental employed approximately 6,900 people in the oil and gas and midstream and marketing segments and 3,000 people in the chemical segment. An additional 1,100 people were employed in administrative and headquarters functions. Approximately 900 U.S.-based employees and 300 foreign-based employees are represented by labor unions.

Occidental has a long-standing strict policy to provide fair and equal employment opportunities to all applicants and employees.

Environmental Regulation

For environmental regulation information, including associated costs, see the information under the heading "Environmental Liabilities and Expenditures" in the MD&A section of this report and "Risk Factors."

Available Information

Occidental makes the following information available free of charge through its web site at www.oxy.com:

Ø	Forms 10-K, 10-Q, 8-K and amendments to these forms as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (SEC);

Ø	Other SEC filings, including Forms 3, 4 and 5; and

Ø	Corporate governance information, including its corporate governance guidelines, board-committee charters and Code of Business Conduct. (See Part III Item 10 of this report for further information.)

Information contained on Occidental's web site is not part of this report.

Item 1A

Risk Factors

Volatile global and local commodity pricing strongly affects Occidental’s results of operations.

Occidental’s financial results typically correlate closely to the prices it obtains for its products.

Changes in consumption patterns, global and local economic conditions, inventory levels, production disruptions, the actions of OPEC, currency exchange rates, market speculation, worldwide drilling and exploration activities, weather, geophysical and technical limitations and other matters may affect the supply and demand dynamics of oil and gas, contributing to price volatility.

Demand and, consequently, the price obtained for Occidental’s chemical products correlate strongly to the health of the United States and global economy, as well as chemical industry expansion and contraction cycles. Occidental also depends on feedstocks and energy to produce chemicals, which are commodities subject to significant price fluctuations.

Occidental’s oil and gas business operates in highly competitive environments, which affect, among other things, its results of operations and its ability to grow production and replace reserves.

Growth in Occidental’s oil and gas production and results of operations depends, in part, on its ability to profitably acquire, develop or find additional reserves. Occidental replaces significant amounts of its reserves through acquisitions, exploration and large development projects. Occidental has many competitors (including national oil companies), some of which are: (i) larger and better funded, (ii) may be willing to accept greater risks or (iii) have special competencies. Competition for reserves may make it more difficult to find attractive investment opportunities or require delay of expected reserve replacement efforts. During periods of low product prices, any cash conservation efforts may delay production growth and reserve replacement efforts.

Occidental faces risks associated with its mergers, acquisitions and divestitures.

Occidental's merger, acquisition and divestiture activities carry risks that it may: (i) not fully realize anticipated benefits due to less than expected reserves or production or changed circumstances, such as product prices; (ii) bear unexpected integration costs or experience other integration difficulties; (iii) experience share price declines based on the market's evaluation of the activity; or (iv) assume or retain liabilities that are greater than anticipated.

Governmental actions, political instability and labor unrest may affect Occidental’s results of operations.

Occidental’s businesses are subject to the decisions of many governments and political interests. As a result, Occidental faces risks of:

Ø	new or amended laws and regulations, including those related to labor and employment, taxes, royalty rates, profit repatriation, permitted production rates, drilling, production or manufacturing processes, entitlements, import, export and use of equipment, use of land, water and other natural resources, safety, security and environmental protection, all of which may increase production costs or reduce the demand for Occidental's products; and

Ø	refusal or delay in the extension or grant of exploration, development or production contracts.

Occidental may experience adverse consequences, such as risk of loss or production limitations, because certain of its foreign operations are located in countries occasionally affected by political instability, armed conflict, terrorism, insurgency, civil unrest, security problems, labor unrest, OPEC production restrictions, equipment import restrictions and sanctions. Exposure to such risks may increase if a greater percentage of Occidental’s future oil and gas production comes from foreign sources.

There has been recent political instability and civil unrest in Bahrain, Libya and Yemen. The effect, if any, of these developments on Occidental's operations is unknown at this time, but is not expected to be material.

Occidental’s oil and gas reserves are based on professional judgments and may be subject to revision.

Calculations of oil and gas reserves depend on estimates concerning reservoir characteristics and recoverability, including decline rates, as well as capital and operating costs. If Occidental were required to make unanticipated significant negative reserve revisions, its results of operations and stock price could be adversely affected.

Occidental may experience significant losses in exploration activities or delays in development efforts or cost overruns.

Exploration is inherently risky. Exploration and development activities are subject to delays, misinterpretation of geologic or engineering data, unexpected geologic conditions or finding reserves of disappointing quality or quantity, which may result in significant losses. Occidental bears the risks of project delays and cost overruns due to equipment failures, approval delays, construction delays, escalating costs or competition for services, materials, supplies or labor, border disputes and other associated risks in its development efforts.

Concerns about climate change may affect Occidental’s operations.

There is an ongoing effort to assess and quantify the effects of climate change and the potential human influences on climate. Various U.S. and foreign jurisdictions, including the U.S. federal government and the states of California and New Mexico, have adopted legislation, regulations or policies that seek to control or reduce the production, use or emissions of “greenhouse gases” (GHGs), to control or reduce the production or consumption of fossil fuels, and to increase the use of renewable or alternative energy sources, and such measures are pending in other jurisdictions. The uncertain outcome and timing of existing and proposed international, national, and state measures intended to reduce GHGs make it difficult to predict their business

impact. However, Occidental could face risks of delays in development projects, increases in costs and taxes and reductions in the demand for and restrictions on the use of its products as a result of ongoing GHG reduction efforts.

Occidental’s businesses may experience catastrophic events.

The occurrence of events, such as earthquakes, hurricanes, floods, well blowouts, fires, explosions, chemical releases and industrial accidents, and other events that cause operations to cease or be curtailed, may negatively affect Occidental’s businesses and communities in which it operates. Third-party insurance may not provide adequate coverage or Occidental may be self-insured with respect to the related losses.

Other risk factors.

Additional discussion of risks related to oil and gas reserve estimation processes, price and demand, litigation, environmental matters, foreign operations, impairments, derivatives and market risks appears under the headings: "MD&A — Oil & Gas Segment —Proved Reserves" and "— Industry Outlook," "Chemical Segment — Industry Outlook," "Midstream, Marketing and Other Segment — Industry Outlook," "Lawsuits, Claims, Commitments, Contingencies and Related Matters," "Environmental Liabilities and Expenditures," "Foreign Investments," "Critical Accounting Policies and Estimates," and "Derivative Activities and Market Risk."

Item 1B

Unresolved Staff Comments

None.

Item 3

Legal Proceedings

For information regarding legal proceedings, see the information under the caption, "Lawsuits, Claims, Commitments, Contingencies and Related Matters" in the MD&A section of this report and in Note 9 to the Consolidated Financial Statements.

In May 2010, a putative stockholder action, Resnik v. Abraham, was filed in the U.S. District Court (Delaware), naming the present directors, certain executive officers and Occidental, as defendants. The complaint alleges defendants made a false and misleading proxy solicitation in connection with re-approval of the performance goals for certain incentive awards and authorized excessive compensation constituting corporate waste and breach of fiduciary duties. In July and August 2010, second and third purported stockholder complaints, Gusinsky v. Irani and Wein v. Irani, respectively, alleging similar derivative claims for corporate waste and breach of fiduciary duty, were filed in the Los Angeles Superior Court. The parties in the Resnik case reached an agreement in principle, providing for the settlement of that action in October 2010. The plaintiffs in the Gusinsky and Wein matters filed objections to the Resnik settlement in November 2010. In December 2010, Occidental reached an agreement with those plaintiffs to resolve their objections and filed a revised notice of settlement with the court on December 27, 2010. At a fairness hearing on February 8, 2011, the settlement was approved. As a result, the Wein and Gusinsky plaintiffs have agreed to dismiss their cases with prejudice.

In a previously disclosed proceeding, the Colorado Oil and Gas Conservation Commission (COGCC) has proposed a penalty of approximately $370,000 for an alleged release of production fluids from a well site.

Executive Officers

The current term of employment of each executive officer of Occidental will expire at the May 6, 2011 organizational meeting of the Board of Directors or when a successor is selected. The following table sets forth the executive officers of Occidental:

Name	Age at February 24, 2011	Positions with Occidental and Subsidiaries and Five-Year Employment History
Dr. Ray R. Irani	76	Chairman and Chief Executive Officer since 1990; Director since 1984; Member of Executive Committee; 2005-2007, President.
Stephen I. Chazen	64	President since 2007; Chief Operating Officer and Director since 2010; 1999-2010, Chief Financial Officer; 2005-2007, Senior Executive Vice President.
Donald P. de Brier	70	Executive Vice President, General Counsel and Secretary since 1993.
James M. Lienert	58	Executive Vice President and Chief Financial Officer since 2010; 2006-2010, Executive Vice President — Finance and Planning; 2004-2006, Vice President; Occidental Chemical Corporation: 2004-2006, President.
William E. Albrecht	59	Vice President since 2008; Occidental Oil and Gas Corporation (OOGC): President — Oxy Oil & Gas, USA since 2008; 2007-2008, Vice President, California Operations; Noble Royalties, Inc.: 2006-2007, President of Acquisitions and Divestitures; EOG Resources, Inc.: 1998-2006, Vice President of Acquisitions and Engineering.
Edward A. "Sandy" Lowe	59	Vice President since 2008; OOGC: President — Oxy Oil & Gas, International Production since 2009; 2008-2009, Executive Vice President — Oxy Oil & Gas, International Production and Engineering; 2008, Executive Vice President — Oxy Oil & Gas, Major Projects; Dolphin Energy Ltd.: 2002-2007, Executive Vice President and General Manager.
Roy Pineci	48	Vice President, Controller and Principal Accounting Officer since 2008; 2007-2008, Senior Vice President, Finance — Oil and Gas; 2005-2007, Vice President — Internal Audit.
B. Chuck Anderson	51	President of Occidental Chemical Corporation since 2006; 2004-2006, Executive Vice President — Chlorovinyls.

Part II

Item 5

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Trading Price Range and Dividends

This section incorporates by reference the quarterly financial data appearing under the caption "Quarterly Financial Data (Unaudited)" after the Notes to the Consolidated Financial Statements and the information appearing under the caption "Liquidity and Capital Resources" in the MD&A section of this report. Occidental’s common stock was held by 35,577 stockholders of record at December 31, 2010, and by approximately 537,000 additional stockholders whose shares were held for them in street name or nominee accounts. The common stock is listed and traded principally on the New York Stock Exchange. The quarterly financial data, which are included in this report after the Notes to the Consolidated Financial Statements, set forth the range of trading prices for the common stock as reported on the composite tape of the New York Stock Exchange and quarterly dividend information.

The quarterly dividends declared on the common stock were $0.33 per share for the first quarter of 2010 and $0.38 for the last three quarters of 2010 ($1.47 for the year). On February 10, 2011, a quarterly dividend of $0.46 per share ($1.84 on an annualized basis) was declared on the common stock, payable on April 15, 2011 to stockholders of record on March 10, 2011. The declaration of future dividends is a business decision made by the Board of Directors from time to time, and will depend on Occidental’s financial condition and other factors deemed relevant by the Board.

Securities Authorized for Issuance under Equity Compensation Plans

All of Occidental's equity compensation plans for its employees and non-employee directors, pursuant to which options, rights or warrants or other equity awards may be granted, have been approved by the stockholders. Occidental has established several Plans that allow it to issue stock-based awards in the form of options, restricted stock units, stock appreciation rights, performance stock awards, total shareholder return incentives and dividend equivalents. These include the 1995 Incentive Stock Plan (1995 ISP), 2001 Incentive Compensation Plan (2001 ICP), Phantom Share Unit Awards Plan and the 2005 Long-Term Incentive Plan (2005 LTIP). No further awards will be granted under the 1995 ISP and 2001 ICP; however, certain 1995 ISP and 2001 ICP award grants were outstanding at December 31, 2010. An aggregate of 66 million shares of Occidental common stock were authorized for issuance under the 2005 LTIP.

The following is a summary of the shares reserved for issuance as of December 31, 2010, pursuant to outstanding options, rights or warrants or other equity awards granted under Occidental’s equity compensation plans:

a)	Number of securities to be issued upon exercise of outstanding options, warrants and rights		b)	Weighted-average exercise price of outstanding options, warrants and rights		c)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities in column (a))
1,013,615			$23.62			53,088,606

* Includes, with respect to:

Ÿ	the 1995 Incentive Stock Plan, 5,602 shares reserved for issuance pursuant to deferred stock unit awards;
Ÿ	the 2001 Incentive Compensation Plan, 16,564 shares reserved for issuance pursuant to deferred stock unit awards and 1,446 shares reserved for issuance as dividend equivalents on deferred stock unit awards; and
Ÿ	the 2005 Long-Term Incentive Plan, 285,340 shares at maximum payout level (142,670 at target level) reserved for issuance pursuant to outstanding performance stock awards, 3,561 shares reserved for issuance pursuant to restricted stock unit awards and 3,834,537 shares at maximum payout level (2,041,022 at target or mid-point level) reserved for issuance pursuant to total stockholder return incentive awards.

Of the 48,941,557 shares that are not reserved for issuance under the 2005 Long-Term Incentive Plan, approximately 9 million to 28 million shares are available for issuance, depending on the type of award, after giving effect to the provision of the plan that each award, other than options and stock appreciation rights, must be counted against the number of shares available for issuance as three shares for every one share covered by the award.

Share Repurchase Activities

Occidental’s share repurchase activities for the year ended December 31, 2010 were as follows:

Period	Total Number of Shares Purchased (a)	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
First Quarter 2010	—	—	—
Second Quarter 2010	129,774	$86.60	—
Third Quarter 2010	—	—	—
October 1 - 31, 2010	124,845	$82.39	—
November 1 - 30, 2010	252,835	$84.70	—
December 1 - 31, 2010	252,232	$93.38	—
Fourth Quarter 2010	629,912	$87.72	—
Total 2010	759,686	$87.53	—	27,155,575	(b)

(a)	Purchased from the trustee of Occidental's defined contribution savings plan.
(b)	Occidental has had a 95 million share authorization in place since 2008 for its share repurchase program; however, the program does not obligate Occidental to acquire any specific number of shares and may be discontinued at any time.

Performance Graph

The following graph compares the yearly percentage change in Occidental’s cumulative total return on its common stock with the cumulative total return of the Standard & Poor's 500 Stock Index (S&P 500) and with that of Occidental’s peer groups over the five-year period ended on December 31, 2010. The graph assumes that $100 was invested in Occidental common stock, in the stock of the companies in the S&P 500 and in separate portfolios of each of the peer group companies' common stock weighted by their relative market values each year and that all dividends were reinvested.

In 2010, Occidental revised its current peer group beyond the 9 companies (including Occidental) in the prior peer group to provide a broader comparison basis for Occidental's results within the oil and gas industry. Occidental's prior peer group consisted of Anadarko Petroleum Corporation, Apache Corporation, BP p.l.c., Chevron Corporation, ConocoPhillips, Devon Energy Corporation, ExxonMobil Corporation, Royal Dutch Shell plc and Occidental. Occidental's current peer group consists of Anadarko Petroleum Corporation, Apache Corporation, Canadian Natural Resources Limited, Chevron Corporation, ConocoPhillips, Devon Energy Corporation, EOG Resources Inc., ExxonMobil Corporation, Hess Corporation, Marathon Oil Corporation, Royal Dutch Shell plc and Occidental.

12/31/05		12/31/06	12/31/07	12/31/08	12/31/09	12/31/10
	$100	$124	$199	$158	$218	$268
	100	127	165	123	132	156
	100	124	155	117	127	142
	100	116	122	77	97	112

The information provided in this Performance Graph shall not be deemed "soliciting material" or "filed" with the Securities and Exchange Commission or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 (Exchange Act), other than as provided in Item 201 to Regulation S-K under the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act except to the extent Occidental specifically requests that it be treated as soliciting material or specifically incorporates it by reference.

(1)	The total cumulative return of each peer group companies' common stock includes the cumulative total return of Occidental's common stock.

Item 6 Selected Financial Data

Five-Year Summary of Selected Financial Data
Dollar amounts in millions, except per-share amounts


As of and for the years ended December 31,	2010			2009			2008			2007			2006
results of operations (a)
Net sales	$	19,045		$	14,814		$	23,713		$	18,323		$	16,648
Income from continuing operations (b)	$	4,569		$	3,151		$	7,183		$	5,072		$	4,127
Net income attributable to common stock	$	4,530		$	2,915		$	6,857		$	5,400		$	4,191
Basic earnings per common share from continuing operations (b)	$	5.62		$	3.88		$	8.77		$	6.06		$	4.82	(c)
Basic earnings per common share (b)	$	5.57		$	3.59		$	8.37		$	6.45		$	4.90	(c)
Diluted earnings per common share (b)	$	5.56		$	3.58		$	8.34		$	6.42		$	4.86	(c)

financial position (a)
Total assets	$	52,432		$	44,229		$	41,537		$	36,519		$	32,431
Long-term debt, net	$	5,111		$	2,557		$	2,049		$	1,741		$	2,619
Stockholders’ equity	$	32,484		$	29,159		$	27,325		$	22,858		$	19,604

market capitalization (d)	$	79,735		$	66,050		$	48,607		$	63,573		$	41,013

cash flow
Operating:
Cash provided by operating activities	$	9,349		$	5,807		$	10,654		$	6,798		$	6,351
Investing:
Capital expenditures	$	(3,940	)	$	(3,245	)	$	(4,126	)	$	(3,038	)	$	(2,684	)
Cash used by all other investing activities, net	$	(5,138	)	$	(2,082	)	$	(5,203	)	$	(37	)	$	(1,606	)
Financing:
Cash dividends paid	$	(1,159	)	$	(1,063	)	$	(940	)	$	(765	)	$	(646	)
Cash provided (used) by all other financing activities, net	$	2,242		$	30		$	(570	)	$	(2,333	)	$	(2,266	)

dividends per common share	$	1.47		$	1.31		$	1.21		$	0.94		$	0.80	(c)

weighted average basic shares outstanding (thousands)		812,472			811,305			817,635			834,932			852,550	(c)

Note: Argentine operations have been reflected as held for sale for all periods.

(a)	See the MD&A section of this report and the Notes to Consolidated Financial Statements for information regarding acquisitions and dispositions, discontinued operations and other items affecting comparability.
(b)	Represent amounts attributable to common stock after deducting noncontrolling interest amounts of $72 million in 2010, $51 million in 2009, $116 million in 2008, $75 million in 2007 and $111 million in 2006.
(c)	Amounts have been adjusted to reflect a two-for-one stock split in the form of a stock dividend to stockholders on August 1, 2006.
(d)	Market capitalization is calculated by multiplying the year-end total shares of common stock outstanding, net of shares held as treasury stock, by the year-end closing stock price.

Item 7 and 7A

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)

Strategy

General

In this report, "Occidental" refers to Occidental Petroleum Corporation (OPC), and/or one or more entities in which it owns a majority voting interest (subsidiaries). Occidental's principal businesses consist of three industry segments operated by OPC's subsidiaries and affiliates. The oil and gas segment explores for, develops, produces and markets crude oil, including natural gas liquids (NGLs) and condensate (together with NGLs, "liquids"), as well as natural gas. The chemical segment (OxyChem) manufactures and markets basic chemicals, vinyls and other chemicals. The midstream, marketing and other segment (midstream and marketing) gathers, treats, processes, transports, stores, purchases and markets crude oil, liquids, natural gas, carbon dioxide (CO2) and power. It also trades around its assets, including pipelines and storage capacity, and trades oil and gas, other commodities and commodity-related securities. Unless otherwise indicated hereafter, discussion of oil or oil and liquids refers to crude oil, NGLs and condensate. In addition, discussions of oil and gas production or volumes, in general, refer to sales volumes unless the context requires or it is indicated otherwise.

Occidental aims to generate superior total returns to stockholders using the following strategies:

Ø	Focus on large, long-lived oil and gas assets with long-term growth potential;

Ø	Maintain financial discipline and a strong balance sheet;

Ø	Manage the chemical segment to provide cash in excess of normal capital expenditures; and

Ø	Manage the midstream and marketing segment to generate returns in excess of Occidental's cost of capital.

Occidental prefers to own large, long-lived "legacy" oil and gas assets, like those in California and the Permian Basin, that tend to have enhanced secondary and tertiary recovery opportunities and economies of scale that lead to cost-effective production in a safe and environmentally sound manner. Management expects such assets to contribute substantially to earnings and cash flow after invested capital.

At Occidental, maintaining financial discipline means investing capital in projects that management expects will generate above-cost-of-capital returns through their life cycle. Occidental expects to use most of any excess cash flow after capital expenditures to enhance stockholders' returns through dividend increases and acquisition opportunities.

The chemical business is not managed with a growth strategy but to generate cash flow exceeding its normal capital expenditure requirements. Capital is employed to operate the chemical business in a safe and environmentally sound way, to sustain production capacity and to focus on projects designed to improve the competitiveness of these assets. Acquisitions may be pursued when they are expected to enhance the existing core chlor-alkali and polyvinyl chloride (PVC) businesses or take advantage of other specific opportunities.

The midstream and marketing segment is managed to generate returns on capital invested in excess of Occidental's cost of capital. In marketing its own production and third party purchases, Occidental attempts to maximize realized prices and margins and limit credit risk exposure. In commodities and commodity-related securities trading, Occidental seeks to generate gains using net long positions. Capital is employed to operate segment assets in a safe and environmentally sound way, to sustain or, where appropriate, increase operational capacity and to improve the competitiveness of Occidental's assets.

Oil and Gas

Segment Earnings

($ millions)

The oil and gas business seeks to increase its oil and gas production profitably and add new reserves at a pace ahead of production while minimizing costs incurred for finding and development. The oil and gas business implements this strategy within the limits of the overall corporate strategy primarily by:

Ø	Deploying capital to fully develop areas where proved reserves exist and increase production from mature fields;

Ø	Adding commercial reserves through a combination of focused exploration and development programs conducted in Occidental's core areas, which are the United States, the Middle East/North Africa and Latin America;

Ø	Pursuing commercial opportunities in core areas to enhance the development of mature fields with large volumes of remaining oil by applying appropriate technology and advanced reservoir-management practices; and

Ø	Maintaining a disciplined approach to acquisitions and divestitures with an emphasis on transactions at attractive prices.

Over the past several years, Occidental has strengthened its asset base within its core areas. Occidental has invested in, and disposed of, assets with the goal of raising the average performance and potential of its assets.

In December 2010, Occidental executed an agreement with a subsidiary of China Petrochemical Corporation (Sinopec) to sell its Argentine oil and gas operations for after-tax proceeds of approximately $2.6 billion. The sale closed in February 2011.

In January 2011, Occidental completed the acquisition of gas producing properties in South Texas for approximately $1.8 billion. In December 2010, Occidental acquired approximately 174,000 net contiguous acres of oil producing and prospective properties in North Dakota, which also offer significant further development opportunity, for approximately $1.4 billion.

In 2010, Occidental also acquired various domestic oil and gas interests that complement its existing portfolio of assets for approximately $2.8 billion. These assets are in operated, producing and non-producing properties in the Permian Basin, mid-continent region and California.

The acquisitions mentioned above collectively are expected to offset the Argentine production.

In addition, Occidental continues to deploy significant capital to its core operations in the Permian Basin, California and mid-continent region to increase production from these assets.

Internationally, Occidental announced in January 2011 that it had reached an agreement-in-principle for a 40-percent participating interest in the Shah Field development project in Abu Dhabi, partnering with the Abu Dhabi National Oil Company. In January of 2010, Occidental and its partners signed a technical service contract with the South Oil Company of Iraq to develop the Zubair Field in Iraq. In April 2009, Occidental and its partners signed a Development and Production Sharing

Agreement (DPSA) with the National Oil and Gas Authority of Bahrain for further development of the Bahrain Field. The DPSA became effective in December 2009. In addition, Occidental has continued to make capital expenditures and investments in existing projects in the Middle East/North Africa and expects continued production growth in the Mukhaizna project in Oman.

Chemical

Segment Earnings

($ millions)

OxyChem’s strategy is to be a low-cost producer in order to maximize its cash flow generation. OxyChem concentrates on the chlorovinyls chain beginning with chlorine, which is co-produced with caustic soda, both of which are marketed to third parties. In addition, chlorine, together with ethylene, is converted through a series of intermediate products into polyvinyl chloride (PVC). OxyChem's focus on chlorovinyls permits it to maximize the benefits of integration and allows it to take advantage of economies of scale.

Midstream, Marketing and Other

Segment Earnings

($ millions)

The midstream and marketing segment is managed to generate returns on capital invested in excess of Occidental's cost of capital. In order to generate these returns, the segment provides low cost services to other segments as well as to third parties and operates gas plants, oil, gas and CO2 pipeline systems and storage facilities. In addition, the marketing and trading group markets Occidental's and third-party oil and gas, trades around the midstream and marketing segment assets and engages in commodities and commodity-related securities trading.

In December 2010, Occidental purchased additional interests in the General Partner of Plains All-American Pipeline, L.P. (Plains Pipeline), and now owns approximately 35 percent of the General Partner. In December 2010, Occidental also completed its acquisition of the remaining 50-percent joint venture interest in Elk Hills Power, LLC (EHP), a limited liability company that operates a gas-fired power-generation plant in California, bringing Occidental’s total ownership to 100 percent.

Key Performance Indicators

General

Occidental seeks to ensure that it meets its strategic goals by continuously measuring its success in maintaining below-average debt levels, delivering returns in excess of its cost of capital and achieving top-quartile performance compared to its peers in:

Ø	Total return to stockholders;

Ø	Return on equity (ROE);

Ø	Return on capital employed (ROCE); and

Ø	Other segment-specific measures such as per-unit profit, production cost, cash flow, finding and development cost, reserves replacement percentage and others.

Over the years, Occidental has delivered high levels of return. Occidental increased stockholder's equity by 11 percent for 2010 and 42 percent for the three-year period from 2008 to 2010 while continuing to deliver above cost of capital returns. During the three-year period from 2008 to 2010, Occidental increased its dividend rate by 52 percent while its stock price increased by 27 percent.

	Annual 2010 (a)	Three-Year Annual Average 2008 - 2010 (b)
ROE	14.7%	17.1%
ROCE	13.2%	15.5%

(a)	The ROE and ROCE for 2010 were calculated by dividing Occidental's 2010 net income attributable to common stock (taking into account cost of capital for ROCE) by its average equity and capital employed, respectively, during 2010.
(b)	The three-year average ROE and ROCE were calculated by dividing Occidental's average net income attributable to common stock (taking into account cost of capital for ROCE) over the three-year period 2008-2010 by its average equity and capital employed, respectively, over the same period.

Debt Structure

Occidental’s year-end 2010 total debt-to-capitalization ratio was 14 percent. Occidental issued $2.6 billion of senior unsecured notes in the fourth quarter of 2010.

Occidental’s long-term senior unsecured debt was rated A by Fitch Ratings, Standard and Poor’s Ratings and DBRS. Occidental’s long-term unsecured debt was rated A2 by Moody’s Investors Service. A security rating is not a recommendation to buy, sell or hold securities, may be subject to revision or withdrawal at any time by the assigning rating organization and should be evaluated independently of any other rating.

Oil and Gas Segment

Business Environment

Oil and gas prices are the major variables that drive the industry’s short and intermediate term financial performance. Average oil prices were higher in 2010 than 2009. West Texas Intermediate (WTI) was $91.38 and $79.36 per barrel as of December 31, 2010 and 2009, respectively. The average daily WTI market price for 2010 was $79.53 per barrel compared with $61.80 per barrel in 2009. Occidental’s realized price for crude oil for its continuing operations as a percentage of average WTI prices was approximately 95 percent and 93 percent for 2010 and 2009, respectively.

The average daily New York Mercantile Exchange (NYMEX) domestic natural gas price in 2010 increased approximately 7 percent from 2009. For 2010, the price averaged $4.49 per thousand cubic feet (Mcf) compared with $4.20 per Mcf for 2009, and was $4.41 per Mcf as of December 31, 2010.

Prices and differentials can vary significantly, even on a short-term basis, making it impossible to predict realized prices with a reliable degree of certainty.

Business Review

All sales, production and reserves volumes are net to Occidental and include amounts attributable to noncontrolling interests, where applicable, unless otherwise specified.

Worldwide Sales Volumes

(thousands BOE/day)

	(a)	Includes average sales volumes per day of 4 thousand barrels (mbbl), 6 mbbl, 6 mbbl, 5 mbbl and 5 mbbl for 2010, 2009, 2008, 2007 and 2006, respectively, related to the noncontrolling interest in a Colombian subsidiary.
	(b)	Represents average sales volumes per day of 43 thousand barrels of oil equivalent (MBOE), 42 MBOE, 36 MBOE, 36 MBOE and 36 MBOE for 2010, 2009, 2008, 2007 and 2006, respectively, related to the Argentine operations.

Production-Sharing Contracts (PSC)

Occidental conducts its operations in Bahrain, Iraq, Libya, Oman, Yemen and Qatar, including Dolphin, under PSCs or similar contracts. Under such contracts, Occidental receives a share of production and reserves to recover its costs and an additional share for profit. In addition, Occidental's share of production and reserves from operations in Long Beach, California and certain contracts in Colombia are subject to contractual arrangements similar to a PSC. These contracts do not transfer any right of ownership to Occidental and reserves reported from these arrangements are based on Occidental’s economic interest as defined in the contracts. Occidental’s share of production and reserves from these contracts decreases when product prices rise and increases when prices decline. Overall, Occidental’s net economic benefit from these contracts is greater when product prices are higher.

United States


		United States 1. Permian 2. Elk Hills and other interests 3. Other California interests 4. Midcontinent and Other Interests

Permian

Occidental's Permian production is diversified across a large number of producing areas in the Permian Basin. The Permian Basin extends throughout southwest Texas and southeast New Mexico and is one of the largest and most active oil basins in the United States, with the entire basin accounting for approximately 18 percent of the total United States crude oil production. Occidental is the largest producer of crude oil in the Permian Basin with an approximate 16-percent net share of the total production. Occidental also produces and processes natural gas and NGLs in the Permian Basin.

Starting in 2010, Permian Basin non-associated gas assets were included as part of the Midcontinent Gas operations. As a result of this change, the Permian business unit's production shifted from 84 percent liquids and 16 percent gas, to 89 percent liquids and 11 percent, mostly associated, gas.

In the past several years, including 2010, Occidental increased its Permian interests through various acquisitions.

Occidental’s interests in Permian offer additional development and exploitation potential. During 2010, Occidental drilled approximately 190 wells on its operated properties and participated in additional wells drilled on third-party-operated properties. Occidental conducted development activity on 11 CO2 projects during 2010. Occidental also focused on improving the performance of existing wells. Occidental had an average of 80 well service units working in Permian during 2010 performing well maintenance and workovers.

Approximately 66 percent of Occidental’s Permian oil production is from fields that actively employ the application of CO2 flood technology, an enhanced oil recovery (EOR) technique. This technique involves injecting CO2 into oil reservoirs where it causes the oil to flow more freely into producing wells. These CO2 flood operations make Occidental a world leader in the application of this technology.

Occidental’s policy regarding tertiary recovery is to capitalize costs when they support development of proved reserves and otherwise generally expense these costs. In 2009, Occidental capitalized approximately 50 percent of the costs of CO2 injected in Permian. Over the years, as the CO2 program matured, a smaller portion of the injected CO2 resulted in the development of proved reserves. Beginning in 2010, Occidental expensed 100 percent of the CO2 injected, in order to better reflect the current nature of the CO2 program.

Occidental's total share of Permian Basin oil and gas production was approximately 197,000 BOE per day in 2010, which included approximately 183,000 BOE per day from the Permian business unit. At the end of 2010, Occidental's Permian properties had approximately 1.2 billion BOE in proved reserves.

California

Occidental's California operations consist of holdings in the Elk Hills area, the Wilmington Field in the Los Angeles basin and other interests in the Ventura, San Joaquin, Los Angeles and Sacramento basins.

Occidental's interests in the Elk Hills area include the Elk Hills oil and gas field in the southern portion of California’s San Joaquin Valley, which it operates with an approximate 78-percent interest, along with other adjacent properties. The Elk Hills Field is the largest producer of gas and NGLs in California. During 2010, Occidental continued to perform infill drilling, field extensions and recompletions identified by advanced reservoir characterization techniques, resulting in approximately 240 new wells being drilled and approximately 190 wells being worked over.

During 2010, Occidental continued to produce from the Kern County discovery area announced last year and continued to develop the multi-pay zones. Based on currently available data, Occidental believes that its estimates of gross reserves ranges for the area remain reasonable for the combined conventional and unconventional pay zones.

Occidental began construction of a new gas processing plant in the Elk Hills area in 2010, and plans to commence building a second such plant in the next two years.

Occidental also owns interests in California properties in the Ventura, San Joaquin and Sacramento basins, other than Elk Hills. The combined properties produce oil and gas from more than 50 fields.

Occidental holds approximately 1.6 million acres in California, the vast majority of which are net fee mineral interests. A large portion of such interests has been acquired in the last few years. As a result, Occidental has a large inventory of properties available for future development.

Occidental's share of production and reserves from its operations in the Wilmington Field is subject to contractual arrangements similar to a PSC.

Occidental's total share of oil and gas production in California was approximately 139,000 BOE per day in 2010. At the end of 2010, Occidental's properties in California had approximately 768 million BOE in proved reserves.

Midcontinent and Other Interests

In 2010, Occidental combined most of its gas production in the mid-continent region of the United States into a single business unit called Midcontinent Gas, in order to take advantage of common development methods and production optimization opportunities. This business unit includes the Hugoton Field, the Piceance Basin and the bulk of the Permian Basin non-associated gas assets, which were included as part of the Permian business unit in 2009. As a result, Midcontinent Gas’ production is approximately 70 percent gas and 30 percent liquids.

The Midcontinent Gas properties are principally located in Texas, New Mexico, Colorado, Utah, Kansas and Oklahoma. Occidental owns over 2.8 million net acres in the mid-continent region, which includes 1.4 million acres in a large concentration of gas reserves and production and royalty interests in the Hugoton area located in Kansas and Oklahoma and approximately 1.4 million acres, mainly in Texas, New Mexico, Colorado and Utah.

In January 2011, Occidental completed the acquisition of gas producing properties in South Texas. Occidental also owns approximately 200,000 net acres of oil producing and prospective properties in North Dakota’s Williston Basin, including acreage in the Bakken and Three Forks formations. A substantial portion of this acreage was purchased in 2010.

Beginning in 2011, the new properties acquired during 2010 and 2011 located in South Texas and North Dakota will be grouped as part of Midcontinent and Other Interests.

In 2010, Midcontinent and Other Interests produced approximately 62,000 BOE per day, which included non-associated gas from the Permian Basin. As of December 31, 2010, proved reserves for these operations totaled approximately 266 million BOE.

Other Developments

The recent acquisitions provide Occidental with a large inventory of development projects. Management conducted a review of Occidental’s portfolio of oil and gas assets in the fourth quarter of 2010 and concluded that certain projects had become uneconomical considering the natural gas price environment and that it would not pursue them. As a result, Occidental recorded a pre-tax impairment charge of $275 million, predominately of gas properties in the Rocky Mountain region in 2010.

Middle East/North Africa


		Middle East/North Africa 1. Bahrain 2. Iraq 3. Libya 4. Oman 5. Qatar 6. United Arab Emirates 7. Yemen

Bahrain

In December 2009, Occidental and its partners began operating the Bahrain Field. Occidental has a 48-percent interest in the joint venture. Occidental expects gross gas production capacity to grow more than 35 percent from a current level of 1.6 billion cubic feet per day to over 2.1 billion cubic feet per day within five years. Gross oil production from the Bahrain Field is expected to more than double to approximately 75,000 barrels per day within five years and grow to a peak level of more than 100,000 barrels per day thereafter. Occidental's share of production from Bahrain during 2010 was approximately 169 million cubic feet (MMcf) of gas and 3,000 barrels of oil per day.

Iraq

In January 2010, Occidental and its partners signed a technical service contract (TSC) with the South Oil Company of Iraq to develop the Zubair Field. Occidental has a 23.44-percent interest in the TSC. Under this TSC, Occidental is entitled to receive oil for cost recovery and remuneration fee, subject to achieving an initial gross production threshold. Occidental and its partners plan to increase production from the initial gross oil production level of approximately 180,000 BOE per day to a contractually targeted production level of 1.2 million BOE per day by 2016 or earlier and maintain this level of production for seven years. During 2010, Occidental and its partners achieved the initial gross production threshold. As of year-end 2010, Occidental's share of production was approximately 12,000 BOE per day.

Libya

Occidental, under agreements with the Libyan National Oil Corporation (NOC), participates in exploration and production operations in the Sirte Basin. In June 2008, Occidental and its partner signed new agreements with NOC to upgrade its existing contracts for up to 30 years. Occidental's share of production from the Libya properties was approximately 13,000 BOE per day in 2010.

Oman

In Oman, Occidental is the operator of Block 9 and Block 27, with a 65-percent working interest in each, Block 53, with a 45-percent working interest, and Block 62, with a 48-percent working interest.

Occidental and its partners signed a 30-year PSC for the Mukhaizna Field (Block 53) with the Government of Oman in 2005. In September 2005, Occidental assumed operations of the Mukhaizna Field. By the end of 2010, Occidental had drilled over 1,020 new wells and continued implementation of a major pattern steam flood project. As of year-end 2010, the exit rate of gross daily production was over 15 times higher than the production rate in September 2005, reaching nearly 120,000 BOE per day. Occidental plans to steadily increase production through continued expansion of the steam flood project.

The term for Block 9 is through December 2015, with a potential 10-year extension. The term for Block 27 is through September 2035.

Occidental has operations in Block 62 where it is pursuing development and exploration opportunities targeting gas and condensate resources.

Occidental's share of production from the Oman properties was approximately 69,000 BOE per day in 2010.

Qatar

Occidental operates three offshore projects in Qatar: Idd El Shargi North Dome (ISND) and Idd El Shargi South Dome (ISSD), with a 100-percent working interest in each, and Al Rayyan (Block 12), with a 92.5-percent working interest.

In 2008, Occidental received approval from the Government of Qatar for the third phase of field development of the ISND Field focusing on continued development of mature reservoirs, while further delineating and developing less mature reservoirs. Drilling under this phase was completed during 2010. Occidental has proposed a fourth phase of development in ISND and field development plans for ISSD and Al Rayyan, which would include additional drilling through 2012.

Occidental also has an investment in Dolphin, which was acquired in 2002, consisting of two separate economic interests through which Occidental owns: (i) a 24.5-percent undivided interest in the assets and liabilities associated with a DPSA with the Government of Qatar to develop and produce natural gas and NGLs in Qatar’s North Field through mid-2032, with a provision to request a 5-year extension; and (ii) a 24.5-percent interest in the stock of Dolphin Energy Limited (Dolphin Energy), which is discussed further in "Midstream, Marketing and Other Segment – Pipeline Transportation."

Occidental's share of production from all of its operations in Qatar was approximately 139,000 BOE per day in 2010.

United Arab Emirates

Occidental announced in January 2011 that it had reached an agreement-in-principle for a 40-percent interest in the Shah Field high sulfur content gas development project in Abu Dhabi, partnering with the Abu Dhabi National Oil Company. The project is anticipated to produce approximately 500 MMcf per day of natural gas, of which Occidental's net share will be approximately 200 MMcf per day. In addition, the project is expected to produce approximately 50,000 barrels per day of liquids, of which Occidental's net share will be approximately 20,000 barrels per day. Production from this field is expected to begin no earlier than 2014. Capital expenditures are estimated to be in the range of $10 billion for the project with Oxy's share proportional to its ownership.

Occidental conducts a majority of its Middle East business development activities through its office in the United Arab Emirates, which also provides various support functions for Occidental’s Middle East/North Africa oil and gas operations.

Yemen

Occidental owns contractual interests in three producing blocks in Yemen, including a 38-percent working interest in the Masila Field, which expires in December 2011, a 40.4-percent interest, including an 11.8-percent interest held in an unconsolidated entity, in the East Shabwa Field, and a 75-percent working interest in Block S-1, which Occidental operates.

Occidental's share of production from the Yemen properties was approximately 30,000 BOE per day in 2010, which included nearly 14,000 BOE per day from the Masila Field.

Latin America

1. Argentina

2. Bolivia

3. Colombia

Argentina

In December 2010, Occidental executed an agreement to sell its Argentine operations. The sale closed in February 2011.

The Argentine operations consist of 23 concessions located in the San Jorge Basin in southern Argentina and the Cuyo and Neuquén Basins in western Argentina. Occidental operated 19 of the concessions with a 100-percent working interest. In 2010, Occidental obtained a ten-year extension for its hydrocarbon concessions in the Santa Cruz province of Argentina, which extended the concessions through a range of dates from 2025 to 2027. During 2010, Occidental drilled approximately 120 new development wells and performed a number of recompletions and well repairs. Occidental’s share of production from the Argentine properties was approximately 43,000 BOE per day in 2010.

Bolivia

Occidental holds working interests in four blocks located in the Tarija, Chuquisaca and Santa Cruz regions of Bolivia.

Colombia

Occidental is the operator under four contracts within the Llanos Norte Basin: the Cravo Norte, Rondón, Cosecha, and Chipirón Association Contracts. Occidental’s working interests under these four contracts are 39 percent, 44 percent, 53 percent and 61 percent, respectively. Occidental also holds a 48-percent working interest in the La Cira-Infantas Field, which is located in the Middle-Magdalena Basin. Occidental's share of 2010 production from its Colombia operations was approximately 32,000 BOE per day.

Proved Reserves

For further information regarding Occidental's proved reserves, see "Supplemental Oil and Gas Information" following the "Financial Statements."

Occidental had proved reserves at year-end 2010 of 3,363 million BOE, as compared with the year-end 2009 amount of 3,230 million BOE. Proved reserves at year-end 2010 consisted of 74 percent oil and liquids and 26 percent natural gas. Proved developed reserves represented approximately 75 percent of Occidental’s total proved reserves at year-end 2010 compared to 77 percent at year-end 2009.

Proved Reserve Additions

Occidental's total proved reserve additions from all sources were 409 million BOE in 2010. The total additions were as follows:

In millions of BOE
Revisions of previous estimates	(1	)
Improved recovery	259
Extensions and discoveries	7
Purchases	144
Total additions	409

Occidental's ability to add reserves, other than purchases, depends on the success of improved recovery, extension and discovery projects, each of which depend on reservoir characteristics, technology improvements, oil and natural gas prices, as well as capital and operating costs. Many of these factors are outside of management’s control, and will affect whether or not these historical sources of proved reserve additions continue at similar levels.

Revisions of Previous Estimates

In 2010, revisions of previous estimates provided a net 1 million BOE reduction to reserves. Revisions included a net positive price-related increase for domestic oil and gas reserves, offset by a negative effect from PSCs mostly in the Middle East/North Africa as well as technical revisions, which were not material.

Oil price changes affect proved reserves recorded by Occidental. For example, when oil prices increase, less oil volume is required to recover costs under PSCs, which results in a reduction of Occidental’s share of proved reserves. Conversely, when oil prices drop, Occidental’s share of proved reserves increases for these PSCs. Oil and natural gas price changes also tend to affect the economic lives of proved reserves, primarily in domestic properties, in a manner offsetting the PSC reserve volume changes. Apart from the effects of product prices, Occidental believes its approach to interpreting technical data regarding proved oil and gas reserves makes it more likely that future proved reserve revisions will be positive rather than negative.

Improved Recovery

In 2010, Occidental added proved reserves of 259 million BOE from improved recovery through its EOR activities. Generally, the improved recovery additions in 2010 were associated with the continued development of mature properties in California, Permian, Argentina and Oman. These properties are generally characterized by the deployment of secondary and tertiary development projects, largely employing application of waterflood (secondary), steamflood (tertiary) or CO2 (secondary or tertiary) injection. These development projects are often applied through existing wells, though additional drilling may be required to fully optimize the development configuration. Waterflooding is the technique of injecting water into the formation to displace the oil to the offsetting oil production wells. Steamflooding is the technique of injecting steam into the formation to lower oil viscosity so that it flows more freely into producing wells. This process is applied in areas where the oil is too viscous to be effectively moved with water. CO2 flooding involves injecting CO2 into oil reservoirs where it causes the oil to flow more freely into producing wells.

Extensions and Discoveries

Occidental also obtained reserve additions from extensions and discoveries, which are dependent on successful exploration and exploitation programs. In 2010, extensions and discoveries added 7 million BOE.

Purchases and Divestitures of Proved Reserves

Occidental continues to add reserves through acquisitions when properties are available at prices it deems reasonable. As market conditions change, the available supply of properties may increase or decrease accordingly. In 2010, Occidental added 144 million BOE through purchases of proved reserves largely consisting of several domestic acquisitions in the Permian and Williston Basins and the Zubair Field in Iraq.

Proved Undeveloped Reserves

In 2010, Occidental had proved undeveloped reserves additions of 287 million BOE from improved recovery, extensions and discoveries and purchases. Of the total additions, 202 million BOE represented additions from improved recovery, primarily in California, Permian, Argentina, Oman, Bahrain and Qatar. Occidental added 81 million BOE through purchases of proved undeveloped reserves domestically in the Permian and Williston Basins and the Zubair Field in Iraq. These proved undeveloped reserve additions were offset by reserves transfers of 135 million BOE to the proved developed category as a result of the 2010 development programs. Occidental incurred approximately $1.4 billion in 2010 to convert proved undeveloped reserves to proved developed reserves. California, Permian, Argentina, Bahrain, Oman and Qatar accounted for approximately 86 percent of the reserves transfers from proved undeveloped to proved developed in 2010. Proved undeveloped reserve additions will require incurrence of additional future development costs.

Reserves Evaluation and Review Process

Occidental’s estimates of proved reserves and associated future net cash flows as of December 31, 2010 were made by Occidental’s technical personnel and are the responsibility of management. The current Senior Director of Worldwide Reserves and Reservoir Engineering is responsible for overseeing the preparation of reserve estimates, including the internal audit and review of Occidental's oil and gas reserves data. The Senior Director has over 29 years of experience in the upstream sector of the exploration and production business, and has held various assignments in North America, Asia and Europe. He is a three-time past Chair of the Society of Petroleum Engineers Oil and Gas Reserves Committee. He is an American Association of Petroleum Geologists (AAPG) Certified Petroleum Geologist and the current Chair of the AAPG Committee on Resource Evaluation. He is a member of the Society of Petroleum Evaluation Engineers, the Colorado School of Mines Potential Gas Committee and the UNECE Expert Group on Resource Classification. He is also an active member of the Joint Committee on Reserves Evaluator Training (JCORET). The Senior Director has Bachelor of Science and Master of Science degrees in geology from Emory University in Atlanta.

Occidental has a Corporate Reserves Review Committee (Reserves Committee) consisting of senior corporate officers, to monitor, review and approve Occidental's oil and gas reserves. The Reserves Committee reports to the Audit Committee of Occidental's Board of Directors during the year. Since 2003, Occidental has retained Ryder Scott Company, L.P. (Ryder Scott), independent petroleum engineering consultants, to review its annual oil and gas reserve estimation processes.

In 2010, Ryder Scott conducted a process review of Occidental’s methods and analytical procedures utilized by Occidental’s engineering and geological staff for estimating the proved reserves volumes, preparing the economic evaluations and determining the reserves classifications as of December 31, 2010, in accordance with the U.S. Securities and Exchange Commission (SEC) regulatory standards. Ryder Scott reviewed the specific application of such methods and procedures for selected oil and gas properties considered to be a valid representation of Occidental’s total proved reserves portfolio. In 2010, Ryder Scott reviewed approximately 20 percent of Occidental’s proved oil and gas reserves. Since being engaged in 2003, Ryder Scott has reviewed the specific application of Occidental’s reserve estimation methods and procedures for approximately 74 percent of Occidental’s proved oil and gas reserves. Management retains Ryder Scott to provide objective third-party input on its methods and procedures and to gather industry information applicable to Occidental’s reserve estimation and reporting process. Ryder Scott has not been engaged to render an opinion as to the reasonableness of reserves quantities reported by Occidental. Occidental has filed Ryder Scott's independent report as an exhibit to this Form 10-K.

Based on its reviews, including the data, technical processes and interpretations presented by Occidental, Ryder Scott has concluded that the overall procedures and methodologies Occidental utilized in estimating the proved reserves volumes for the reviewed properties are appropriate for the purpose thereof, and comply with current SEC regulations.

Industry Outlook

The petroleum industry is highly competitive and subject to significant volatility due to numerous current and anticipated market conditions. WTI generally increased throughout 2010, settling at $91.38 per barrel as of December 31, 2010.

Oil prices will continue to be affected by global demand, which is generally a function of global economic conditions, as well as the actions of OPEC, other significant producers and governments. These factors make it impossible to predict the future direction of oil prices reliably. Occidental continues to adjust to economic conditions by adjusting capital expenditures in line with current economic conditions with the goal of keeping returns well above its cost of capital.

While local supply and demand fundamentals, as well as government regulations and availability of transportation capacity from producing areas, are decisive factors affecting domestic natural gas prices and local differentials over the long term, futures prices can be volatile, making it impossible to forecast prices reliably.

Chemical Segment

Business Environment

The chemical segment earnings increased in 2010 as the world economies began recovering from the global economic downturn. Expanding U.S. and international economies resulted in increased demand for chlorine, caustic soda, PVC and vinyl chloride monomer (VCM). Margins in the U.S. were pressured by higher feedstock costs, but the feedstock costs in North America were favorable compared to Europe and Asia, resulting in strong demand for U.S.-produced products in export markets. Occidental's vinyls exports in 2010 were 125 percent higher compared to 2009.

Business Review

Basic Chemicals

During 2010, demand and pricing for basic chemical products improved as U.S. and international manufacturing sectors recovered from the global economic downturn. Despite the continued weakness within the U.S. housing sector, industry chlorine demand improved by 12 percent compared to 2009, as downstream chlorine derivatives remained competitive in the export markets as a result of feedstock cost advantages in natural gas and ethylene. Improvements in the pulp, alumina and general manufacturing sectors aided caustic soda demand, which increased by 14 percent compared to 2009. Chlorine prices were strong at the beginning of 2010 and remained fairly steady throughout the year. Caustic soda pricing increased throughout the year as the global supply and demand balance tightened due to caustic soda demand rising at a faster rate than chlorine, various plant operating problems occurring in the U.S. and Europe, and the Chinese government’s enforcement of controls on electricity consumption.

Vinyls

Year-over-year domestic demand fell 10 percent due to the continuation of low demand from the housing and commercial construction markets, offset by an 85-percent increase in industry export volumes compared with 2009 due to the continued cost advantage of U.S.-based feedstocks. Overall, 2010 operating rates reflect an 11-percent increase over 2009. Margins for PVC increased compared to 2009 as price increases outpaced increases in both ethylene and chlorine costs.

Industry Outlook

Future performance will depend on the recovery of domestic housing and construction markets, continued global economic recovery, and the cost competitiveness of U.S. feedstock and energy pricing compared to global markets.

Basic Chemicals

Higher domestic demand and margins for basic chemicals products in 2011 are expected to correlate with overall economic improvement in the U.S. as the housing, automotive and durable goods sectors further rebound from 2009. Margins are anticipated to continue to improve as pricing for chlorine and caustic soda is expected to remain strong and U.S. feedstock pricing to remain favorable compared to other global markets.

Vinyls

Operating rates in 2011 are expected to increase from 2010 levels as export volumes remain strong throughout the year and domestic demand increases modestly. The U.S.-based feedstock cost advantage over other vinyls-producing regions is expected to continue.

Midstream, Marketing and Other Segment

Business Environment

Midstream and marketing segment earnings are affected by the volumes of oil and gas it processes as well as the margins it obtains on throughput at its processing plants and transportation pipelines. The marketing and trading businesses earn margins from trading oil, gas and other commodities, marketing the oil and gas segment’s products and storage activity. Generally, the midstream and marketing segment earns higher margins in high or increasing price environments.

The midstream and marketing segment earnings increase in 2010 compared to 2009 reflected higher margins in the marketing and trading and gas processing businesses and increased earnings in the pipeline business.

Business Review

Oil and Gas Marketing and Trading

The marketing and trading group markets substantially all of Occidental’s oil and gas production, trades around the midstream and marketing segment assets and engages in commodities and commodity-related securities trading. Occidental’s third-party marketing and trading activities focus on purchasing crude oil and natural gas for resale from partners, producers and third parties whose oil and gas supply is located near midstream and marketing assets, such as pipelines, processing plants and storage facilities, that are owned or leased by Occidental. These purchases allow Occidental to aggregate volumes to maximize prices received for Occidental’s production. In addition, Occidental’s Phibro trading unit uses derivative instruments, including forwards, futures, swaps and options, some of which may be for physical delivery, in its strategy to profit from market price changes. Marketing and trading earnings are affected primarily by commodity price changes and margins in oil and gas transportation and storage programs. In 2010, the marketing and trading group earnings improved due to higher trading income.

Gas Processing Plants and CO2 Fields and Facilities

Occidental processes its and third-party domestic wet gas to extract NGLs and other gas by-products, including CO2, and delivers dry gas to pipelines. Margins result from the difference between inlet costs of wet gas and market prices for NGLs.

In 2008, Occidental signed an agreement for a third party to construct a gas processing plant that will provide CO2 for Occidental’s EOR projects in the Permian Basin. Occidental will own and operate the new facility, of which a portion became operational in 2010 with the remaining portions expected to be completed in 2012. Occidental has secured transportation agreements to move CO2 extracted at the facility to its Permian Basin production areas.

Occidental’s 2010 earnings from these operations improved due to higher gas processing margins.

Pipeline Transportation

Margin and cash flow from pipeline transportation operations mainly reflect volumes shipped. Dolphin Energy owns and operates a 230-mile-long, 48-inch natural gas pipeline (Dolphin Pipeline), which transports dry natural gas from Qatar to the UAE. Through its 24.5-percent interest in Dolphin Energy, the Dolphin Pipeline investment contributes significantly to Occidental's pipeline transportation results. Production of natural gas and NGLs under the DPSA from Qatar's North Field began during mid-2007 and, since mid-2008, production has been at full capacity of the Dolphin plant. The Dolphin Pipeline has a capacity to transport up to 3.2 Bcf of natural gas per day and currently transports approximately 2.2 Bcf per day. Demand for natural gas in the UAE and Oman has grown and Dolphin Energy’s customers have requested additional gas supplies. To help fulfill this growing demand, Dolphin Energy will continue to pursue an agreement to secure an additional supply of gas from Qatar.

Occidental owns an oil-gathering, common carrier pipeline and storage system with approximately 2,700 miles of pipelines from southeast New Mexico across the Permian Basin of southwest Texas to Cushing, Oklahoma. The system has a current throughput capacity of about 365,000 barrels per day and 5.8 million barrels of active storage capability as well as 69 truck unloading facilities at various points along the system which allow for additional volumes to be delivered into the pipeline.

In 2010, Occidental purchased additional interests in Plains Pipeline. Occidental’s 2010 pipeline transportation earnings improved due to volume and pricing increases from the Dolphin Pipeline investment and increased transportation revenue from domestic pipeline operations.

Power Generation Facilities

Earnings from power generation facilities are derived from the sales of steam and power to affiliates and third parties. Occidental’s 2010 earnings from these facilities increased due to higher margins between the selling prices of steam and the cost of gas used in their production. On December 31, 2010, Occidental completed its acquisition of the remaining 50-percent joint-venture interest in EHP, a limited liability company that operates a gas-fired, power-generation plant in California, bringing Occidental's total ownership to 100 percent.

Industry Outlook

The pipeline transportation and power generation businesses are expected to remain relatively stable. The gas processing plant operations, which generate most of their income by separating and marketing liquids from wet gas, could have volatile results depending on NGL prices, which cannot be predicted. Generally, higher NGL prices result in higher profitability. The trading and marketing business is inherently volatile. Based on its framework of controls and risk management systems, Occidental does not expect the volatility of these operations to be significant to the company as a whole.

Segment Results of Operations

Net income and income from continuing operations represent amounts attributable to common stock.

Segment earnings generally exclude income taxes, interest income, interest expense, environmental remediation expenses, unallocated corporate expenses and discontinued operations, but include gains and losses from dispositions of segment assets and income from the segments' equity investments. Seasonality is not a primary driver of changes in Occidental's consolidated quarterly earnings during the year.

The following table sets forth the sales and earnings of each operating segment and corporate items:

In millions, except per share amounts
For the years ended December 31,	2010			2009			2008
net sales (a)
Oil and Gas	$	14,276		$	11,009		$	17,683
Chemical		4,016			3,225			5,112
Midstream, Marketing and Other		1,471			1,016			1,598
Eliminations (a)		(718	)		(436	)		(680	)
	$	19,045		$	14,814		$	23,713
earnings (loss)
Oil and Gas (b,c)	$	7,151		$	5,097		$	11,237
Chemical (d)		438			389			669
Midstream, Marketing and Other		472			235			520
		8,061			5,721			12,426
Unallocated corporate items
Interest expense, net		(93	)		(102	)		(21	)
Income taxes (e)		(2,995	)		(2,063	)		(4,877	)
Other (f)		(404	)		(405	)		(345	)
Income from continuing operations (b)		4,569			3,151			7,183
Discontinued operations, net (g)		(39	)		(236	)		(326	)
Net Income (b)	$	4,530		$	2,915		$	6,857

Basic Earnings per Common Share	$	5.57		$	3.59		$	8.37

(a)	Intersegment sales eliminate upon consolidation and are generally made at prices approximately equal to those that the selling entity would be able to obtain in third-party transactions.
(b)	Oil and gas segment earnings, income from continuing operations and net income represent amounts attributable to common stock after deducting noncontrolling interest amounts of $72 million, $51 million and $116 million for 2010, 2009 and 2008, respectively.
(c)	The 2010 amount includes a $275 million fourth quarter pre-tax charge for asset impairments, predominately of gas properties in the Rocky Mountain region. The 2009 amount includes an $8 million pre-tax charge for the termination of rig contracts. The 2008 amount includes a $123 million pre-tax charge for asset impairments and a $46 million pre-tax charge for the termination of rig contracts.
(d)	The 2008 amount includes a pre-tax charge of $90 million for plant closure and impairments.
(e)	The 2010 amount includes an $80 million benefit related to foreign tax credit carryforwards. The 2009 and 2008 amounts include tax benefits of $87 million and $148 million resulting from relinquishment of exploration properties, respectively.
(f)	The 2009 amount includes a $40 million pre-tax charge related to severance and a $15 million pre-tax charge for railcar leases.
(g)	The 2009 amount includes an after-tax charge of $111 million for asset impairments of certain Argentine producing properties and the 2008 amount includes an after-tax charge of $309 million for asset impairments of undeveloped acreage in Argentina.

Oil and Gas

Dollars in millions, except as indicated
For the years ended December 31,	2010		2009		2008
Segment Sales	$	14,276	$	11,009	$	17,683
Segment Earnings	$	7,151	$	5,097	$	11,237

The following tables set forth the sales volumes and production of oil and liquids and natural gas per day for each of the three years in the period ended December 31, 2010. The differences between the sales volumes and production per day are generally due to the timing of shipments at Occidental’s international locations where product is loaded onto tankers.


Sales Volumes per Day	2010		2009		2008
United States
Oil and liquids (MBBL)
California		92		93		89
Permian		161		164		164
Midcontinent Gas		18		14		10
Total		271		271		263
Natural gas (MMCF)
California		280		250		235
Permian		133		125		116
Midcontinent Gas		264		260		236
Total		677		635		587
Latin America
Crude oil (MBBL)
Colombia (a)		36		45		43
Natural gas (MMCF)
Bolivia		16		16		21
Middle East/North Africa
Oil and liquids (MBBL)
Bahrain		3		—		—
Dolphin		24		25		26
Libya		13		12		19
Oman		61		50		34
Qatar		76		79		80
Yemen		30		35		32
Total		207		201		191
Natural gas (MMCF)
Bahrain		169		10		―
Dolphin		236		257		231
Oman		48		49		53
Total		453		316		284
Sales Volumes from Continuing Operations (MBOE)		705		678		645
Held for Sale (b)
Oil and Liquids (MBBL)		37		37		32
Natural gas (MMCF)		34		30		21
Total Sales Volumes (MBOE) (c)		748		720		681

(See footnotes following the Average Sales Price table)

Production per Day	2010		2009		2008
United States
Oil and liquids (MBBL)		271		271		263
Natural gas (MMCF)		677		635		587
Latin America
Crude oil (MBBL)
Colombia (a)		37		45		44
Natural gas (MMCF)		16		16		21
Middle East/North Africa
Oil and liquids (MBBL)
Bahrain		3		—		—
Dolphin		24		26		25
Iraq		3		—		—
Libya		13		11		19
Oman		62		50		34
Qatar		76		79		80
Yemen		31		34		32
Total		212		200		190
Natural gas (MMCF)		453		316		284
Total Production from Continuing Operations (MBOE)		711		677		645
Held for Sale (b)
Crude oil (MBBL)		36		36		34
Natural gas (MMCF)		34		30		21
Total Production (MBOE) (c)		753		718		683

(See footnotes following the Average Sales Price table)

	2010		2009		2008
Average Sales Prices for Continuing Operations
Crude Oil Prices ($ per bbl)
United States	$	73.79	$	56.74	$	91.16
Latin America	$	75.29	$	55.89	$	91.92
Middle East/North Africa	$	76.67	$	58.75	$	94.70
Total worldwide	$	75.16	$	57.31	$	92.35
Gas Prices ($ per Mcf)
United States	$	4.53	$	3.46	$	8.03
Latin America	$	7.73	$	5.70	$	7.29
Total worldwide	$	3.11	$	2.83	$	6.22
Expensed Exploration (d)	$	262	$	254	$	308
Capital Expenditures
Development	$	2,955	$	2,274	$	3,065
Exploration	$	194	$	132	$	234
Discontinued operations (b)	$	310	$	336	$	538
Other	$	17	$	42	$	8

(a)	Includes sales volumes per day of 4 mbbl, 6 mbbl and 6 mbbl for the years ended December 31, 2010, 2009 and 2008, respectively, related to the noncontrolling interest in a Colombian subsidiary. Includes production volumes per day of 5 mbbl, 6 mbbl and 6 mbbl for the years ended December 31, 2010, 2009 and 2008, respectively, related to the noncontrolling interest in a Colombia subsidiary.
(b)	Occidental has classified its Argentine operations as held for sale.
(c)	Natural gas volumes have been converted to BOE based on energy content of six Mcf of gas to one barrel of oil.
(d)	Includes dry hole write-offs and lease impairments of $139 million in 2010, $200 million in 2009 and $230 million in 2008.

Oil and gas segment earnings in 2010 were $7.2 billion compared to $5.1 billion in 2009. The increase reflected higher average worldwide crude oil and domestic natural gas prices and higher volumes, partially offset by higher operating expenses, partly resulting from fully expensing CO2, higher field support and workover expenses and higher depreciation, depletion and amortization (DD&A) rates.

Daily oil and gas production volumes, including Argentina, were 753,000 BOE for 2010, compared with 718,000 BOE for the 2009 period. The 5 percent volume increase was mainly due to the new production in Bahrain and higher production in the Mukhaizna field in Oman, and gas production from domestic assets, which were partially offset by a decline in Colombia. Production was negatively impacted in the Middle East/North Africa, Long Beach and Colombia resulting from higher year-over-year average oil prices affecting PSCs by 16,000 BOE per day. Daily sales volumes from continuing operations, were 705,000 BOE in the twelve months of 2010, compared with 678,000 BOE for 2009.

Oil and gas segment earnings in 2009 were $5.1 billion compared to $11.2 billion in 2008. The decrease in segment earnings reflected lower average crude oil and natural gas prices, partially offset by increased oil and gas production, lower operating costs and lower production and ad valorem taxes.

Daily oil and gas production volumes, including Argentina, were 718,000 BOE for 2009, compared with 683,000 BOE for the 2008 period. The 5 percent volume increase reflected increases from California, Midcontinent Gas and the Mukhaizna field in Oman as well as higher volumes resulting from lower year-over-year average oil prices affecting PSCs. Daily sales volumes from continuing operations, were 678,000 BOE in the twelve months of 2009, compared with 645,000 BOE for 2008.

Oil and gas segment earnings in 2010 included a pre-tax charge of $275 million for asset impairments, predominately of gas properties in the Rocky Mountain region. Oil and gas segment earnings in 2009 included an $8 million pre-tax charge for the termination of rig contracts. Oil and gas segment earnings in 2008 included a pre-tax charge of $123 million for asset impairments and a pre-tax charge of $46 million for termination of rig contracts.

Average production costs for 2010 on continuing operations, excluding taxes other than on income, were $10.19 per BOE, compared to $8.95 for 2009. The increase resulted from higher field support operations, workover and maintenance costs, as well as higher CO2 costs, due to the change to expensing 100 percent of injected CO2 beginning in 2010.

Chemical

In millions	2010		2009		2008
Segment Sales	$	4,016	$	3,225	$	5,112
Segment Earnings	$	438	$	389	$	669
Capital Expenditures	$	237	$	205	$	240

Chemical segment earnings were $438 million in 2010, compared to $389 million in 2009. The increase in 2010 reflected improved market conditions, particularly for exports, driven by favorable feedstock costs in North America compared to Europe and Asia. Vinyls exports in 2010 were 125 percent higher compared to 2009.

Chemical segment earnings were $389 million in 2009 compared to $669 million in 2008. The decrease in 2009 results reflected lower volumes and prices for chlorine, caustic soda, PVC and VCM due to the economic slowdown, partially offset by lower feedstock and energy costs. The 2008 earnings were also affected by a $90 million charge for plant closure and impairments.

Midstream, Marketing and Other

In millions	2010		2009		2008
Segment Sales	$	1,471	$	1,016	$	1,598
Segment Earnings	$	472	$	235	$	520
Capital Expenditures	$	501	$	554	$	492

Midstream and marketing segment earnings in 2010 were $472 million, compared to $235 million in 2009. The 2010 results reflected higher margins in the marketing and trading and gas processing businesses and increased earnings in the pipeline business.

Midstream and marketing segment earnings in 2009 were $235 million, compared to $520 million in 2008. The 2009 results reflected lower marketing income and lower margins in gas processing.

Significant Items Affecting Earnings

The following table sets forth, for the years ended December 31, 2010, 2009 and 2008, significant transactions and events affecting Occidental’s earnings that vary widely and unpredictably in nature, timing and amount:

Significant Items Affecting Earnings

Benefit (Charge) (in millions)	2010			2009			2008
oil and gas
Asset impairments	$	(275	)	$	—		$	(123	)
Rig contract terminations		—			(8	)		(46	)
Total Oil and Gas	$	(275	)	$	(8	)	$	(169	)
chemical
Plant closure and impairments	$	—		$	—		$	(90	)
Total Chemical	$	—		$	—		$	(90	)
midstream, marketing and other
No significant items affecting earnings	$	—		$	—		$	—
Total Midstream, Marketing and Other	$	—		$	—		$	—
corporate
Severance charge	$	—		$	(40	)	$	—
Railcar leases		—			(15	)		—
Foreign tax credit carry-forwards		80			—			—
Tax effect of pre-tax adjustments		100			22			67
Discontinued operations, net of tax (a)		(39	)		(236	)		(326	)
Total Corporate	$	141		$	(269	)	$	(259	)

(a)

The 2009 amount includes an after-tax charge of $111 million for asset impairments of certain Argentine producing properties and the 2008 amount includes an after-tax charge of $309 million for asset impairments of undeveloped acreage in Argentina.

Taxes

Deferred tax liabilities, net of deferred tax assets of $1.8 billion, were $3.1 billion at December 31, 2010. The current portion of the deferred tax assets of $330 million is included in prepaid expenses and other. The deferred tax assets, net of allowances, are expected to be realized through future operating income and reversal of temporary differences.

Worldwide Effective Tax Rate

The following table sets forth the calculation of the worldwide effective tax rate for income from continuing operations:

In millions	2010			2009			2008
EARNINGS
Oil and Gas	$	7,151		$	5,097		$	11,237
Chemical		438			389			669
Midstream, Marketing and Other		472			235			520
Unallocated Corporate Items		(497	)		(507	)		(366	)
Pre-tax income		7,564			5,214			12,060
Income tax expense
Federal and State		1,087			684			2,188
Foreign		1,908			1,379			2,689
Total		2,995			2,063			4,877
Income from continuing operations	$	4,569		$	3,151		$	7,183
Worldwide effective tax rate		40%			40%			40%

Occidental’s 2010 worldwide tax rate was 40 percent, which was comparable to 2009 and 2008. The 2010 deferred income tax expense included an $80 million benefit related to foreign tax credit carryforwards. The 2009 and 2008 income tax expense included tax benefits of $87 million and $148 million, respectively, resulting from relinquishments of exploration properties.

Consolidated Results of Operations

Changes in the following components of Occidental's results of operations are discussed below:

Selected Revenue and Other Income Items

In millions	2010		2009		2008
Net sales	$	19,045	$	14,814	$	23,713
Interest, dividends and other income	$	111	$	118	$	236

The increase in net sales in 2010, compared to 2009, was primarily due to higher oil, gas and chemical product prices and volumes. Price and volume increases in the oil and gas segment represented approximately 71 percent of the overall increase, chemical volume and price increases represented 19 percent and midstream and marketing represented the remaining increase.

The decrease in net sales in 2009, compared to 2008, was due to lower oil and gas and chemical product prices, partially offset by higher volumes. Of the price-related decrease in sales, approximately 90 percent was associated with oil and gas.

The decrease in interest, dividends and other income in 2009, compared to 2008, reflected lower interest income due to lower cash balances and interest rates.

Selected Expense Items

In millions	2010		2009		2008
Cost of sales (a)	$	6,112	$	5,105	$	7,162
Selling, general and administrative and other operating expenses	$	1,371	$	1,275	$	1,247
Depreciation, depletion and amortization	$	3,153	$	2,687	$	2,396
Taxes other than on income	$	484	$	425	$	577
Exploration expense	$	262	$	254	$	308
Charges for impairments	$	275	$	—	$	171
Interest and debt expense, net	$	116	$	133	$	124

(a)

Excludes DD&A of $3,145 million in 2010, $2,643 million in 2009 and $2,354 million in 2008.

Cost of sales increased in 2010, compared to 2009, due to higher oil and gas production costs, partly resulting from the effects of fully expensing CO2 costs in 2010, as well as higher field operating, workover and maintenance costs and volumes; and higher chemical volumes, energy and feedstock costs.

Cost of sales decreased in 2009, compared to 2008, mainly due to lower chemicals volumes and lower feedstock and energy costs, which collectively represented approximately 73 percent of the decrease. The remaining portion of the decrease was due to lower oil and gas and midstream and marketing operating costs.

Selling, general and administrative and other operating expenses increased in 2010, compared to 2009, due to higher compensation costs, in particular, equity compensation expense due to higher stock prices in 2010.

Selling, general and administrative and other operating expenses increased in 2009, compared to 2008, due to lower foreign exchange gains, increased severance expense and idling fees for rigs.

DD&A increased in 2010, compared to 2009, due to higher DD&A rates and volumes, including a full year of operations in Bahrain.

DD&A increased in 2009, compared to 2008, due to higher DD&A rates and higher volumes from Oman and the U.S. The 2008 amount also included a charge of $42 million for domestic asset impairments.

Taxes other than on income increased in 2010, compared to 2009, due to higher production taxes for Permian and Midcontinent Gas resulting from higher realized domestic oil and natural gas prices and higher ad valorem taxes in Permian resulting from increased property values.

Taxes, other than on income, decreased mainly due to lower production taxes in Permian and Midcontinent Gas resulting from lower prices in 2009, compared to 2008, and lower ad valorem taxes due to decreased property values in 2009, compared to 2008.

Exploration expense in 2010 was comparable to 2009. Exploration expense decreased in 2009, compared to 2008, due to lower international exploration activities, partially offset by a higher success rate in California exploration activities.

Charges for impairments in 2010 predominately related to gas properties in the Rocky Mountain region.

Charges for impairments in 2008 related to undeveloped acreage in Yemen and chemical plant closure and impairments.

Interest and debt expense, net decreased in 2010, compared to 2009, due to lower average interest rates during 2010. The additional debt raised in December 2010 had a minimal impact on overall interest expense.

Interest and debt expense, net increased in 2009, compared to 2008, due to higher debt levels during 2009 compared to 2008, partially offset by lower interest rates.

Selected Other Items

(Income)/expense (in millions)	2010			2009			2008
Provision for income taxes	$	2,995		$	2,063		$	4,877
Income from equity investments	$	(277	)	$	(227	)	$	(213	)
Discontinued operations, net	$	39		$	236		$	326
Net income attributable to noncontrolling interest	$	72		$	51		$	116

Provision for domestic and foreign income taxes increased in 2010, compared to 2009, due to higher income before taxes in 2010. The worldwide effective tax rate in 2010 was comparable to 2009. The 2010 income tax expense included an $80 million benefit related to foreign tax credit carryforwards.

Provision for domestic and foreign income taxes decreased in 2009, compared to 2008, due to lower income before taxes in 2009. The worldwide effective tax rate in 2009 was comparable to 2008.

Discontinued operations, net, primarily reflected the after-tax losses in the Argentine operations held for sale. The amounts included after-tax impairment charges of $111 million for producing properties and $309 million for undeveloped acreage in 2009 and 2008, respectively.

Net income attributable to noncontrolling interest increased in 2010, compared to 2009, due to higher income in Colombia, resulting from higher realized oil prices.

Net income attributable to noncontrolling interest decreased in 2009, compared to 2008, due to lower net income in Colombia resulting from lower oil prices.

Consolidated Analysis of Financial Position

The changes in the following components of Occidental’s balance sheet are discussed below:

Selected Balance Sheet Components

In millions	2010		2009
CURRENT ASSETS
Cash and cash equivalents	$	2,578	$	1,224
Trade receivables, net		5,032		4,092
Marketing and trading assets and other		900		1,075
Assets of discontinued operations		2,861		2,792
Inventories		1,041		998
Prepaid expenses and other		647		426
Total current assets	$	13,059	$	10,607
Investments in unconsolidated entities	$	2,039	$	1,732
Property, plant and equipment, net	$	36,536	$	31,137
Long-term receivables and other assets, net	$	798	$	753

CURRENT LIABILITIES
Current maturities of long-term debt	$	—	$	239
Accounts payable		4,646		3,282
Accrued liabilities		2,397		2,291
Domestic and foreign income taxes		170		24
Liabilities of discontinued operations		612		655
Total current liabilities	$	7,825	$	6,491
Long-term debt, net	$	5,111	$	2,557
Deferred credits and other liabilities-income taxes	$	3,445	$	2,800
Deferred credits and other liabilities-other	$	3,452	$	3,086
Long-term liabilities of discontinued operations	$	115	$	136
Stockholders’ equity	$	32,484	$	29,159

Assets

See "Liquidity and Capital Resources — Cash Flow Analysis" for discussion about the change in cash and cash equivalents.

The increase in trade receivables, net was due to higher oil prices and higher oil and gas volumes in the fourth quarter of 2010, compared to the fourth quarter of 2009. The decrease in marketing and trading assets and other was mainly due to a decrease in trading securities and marketing activity. The increase in prepaid expenses and other was mainly due to acquisition-related deposits.

Investments in unconsolidated entities increased mainly due to the purchase of additional interests in Plains Pipeline, partially offset by Occidental’s acquisition of the remaining 50-percent joint-venture interest in EHP, bringing Occidental's total ownership in EHP to 100 percent. EHP was consolidated in Occidental's balance sheet as of December 31, 2010.

The increase in PP&E, net was due to capital expenditures and the acquisitions of oil and gas properties, partially offset by DD&A and asset impairments.

Liabilities and Stockholders' Equity

The increase in the accounts payable balance reflected higher oil prices and volumes in the marketing and trading operations and higher capital expenditures during the fourth quarter of 2010 compared to the fourth quarter of 2009.

The increase in long-term debt, net was due to the issuance of $2.6 billion of senior unsecured notes.

The increase in deferred and other domestic and foreign income taxes was due to deferred tax charges incurred in 2010 and deferred taxes resulting from acquisitions. The increase in deferred credits and other liabilities was mainly due to the long-term portion of scheduled payments related to acquisitions and deferred compensation. The increase in stockholder’s equity reflected net income for 2010, partially offset by dividend payments.

Liquidity and Capital Resources

At December 31, 2010, Occidental had approximately $2.6 billion in cash on hand. Income and cash flows are largely dependent on oil and gas prices and sales volumes. Occidental believes that cash on hand, cash generated from operations and cash from pending divestitures will be sufficient to fund its planned acquisitions, as well as operating needs and planned capital expenditures, dividends and any debt payments.

Occidental has a $1.5 billion bank credit facility (Credit Facility) through September 2012, which adjusts to $1.4 billion in September 2011. The Credit Facility provides for the termination of the loan commitments and requires immediate repayment of any outstanding amounts if certain events of default occur or if Occidental files for bankruptcy. Up to $350 million of the Credit Facility is available in the form of letters of credit. Occidental did not draw down any amounts under the Credit Facility during 2010. Available but unused committed bank credit facilities totaled approximately $1.5 billion at December 31, 2010.

Occidental has a shelf registration statement that facilitates issuing senior debt securities. In December 2010, Occidental issued $2.6 billion of debt under this shelf, which comprised $600 million of 1.45-percent senior unsecured notes due 2013, $700 million of 2.50-percent senior unsecured notes due 2016 and $1.3 billion of 4.10-percent senior unsecured notes due 2021. Occidental received net proceeds of approximately $2.6 billion. Interest on the notes will be payable semi-annually in arrears in June and December of each year for the 1.45-percent notes and February and August of each year for both the 2.50-percent notes and 4.10-percent notes.

In February 2011, Occidental initiated redemption of all of its $1.0 billion 7-percent senior notes due 2013 and all of its $368 million 6.75-percent senior notes due 2012. The redemption prices of the 7-percent and 6.75-percent senior notes will be calculated based on make-whole spreads of 50 basis points and 35 basis points, respectively, above the applicable Treasury rates. Occidental will record a charge upon redemption, which is expected to be in the first quarter of 2011.

Occidental, from time to time, may access and has accessed debt markets for long-term and short-term funding for general corporate purposes, including acquisitions. At this time, Occidental does not anticipate any additional material needs for such funding.

None of Occidental's committed bank credit facilities contain material adverse change clauses or debt ratings triggers that could restrict Occidental's ability to borrow under these facilities. Occidental's credit facilities and debt agreements do not contain ratings triggers that could terminate bank commitments or accelerate debt in the event of a ratings downgrade. Borrowings under the Credit Facility bear interest at various benchmark rates, including LIBOR, plus a margin based on Occidental's senior debt ratings. Additionally, Occidental paid an annual facility fee of 0.05 percent in 2010 on the total

commitment amount, which was based on Occidental's senior debt ratings.

As of December 31, 2010, under the most restrictive covenants of its financing agreements, Occidental had substantial capacity for additional unsecured borrowings, the payment of cash dividends and other distributions on, or acquisitions of, Occidental stock.

Cash Flow Analysis

In millions		2010			2009			2008
Net cash provided by operating activities		$	9,349		$	5,807		$	10,654

The most important sources of the increase in operating cash flow in 2010, compared to 2009, were higher worldwide crude oil and domestic natural gas prices and volumes. In 2010, compared to 2009, Occidental’s global realized crude oil and U.S. natural gas prices for continuing operations each increased by 31 percent. In 2010, Occidental's U.S. gas production represented approximately 59 percent of its worldwide natural gas production. Occidental’s 2010 oil and gas sales volumes from continuing operations increased, compared to 2009, mainly due to the new production from Bahrain and higher production in the Mukhaizna field in Oman and higher domestic gas production, partially offset by a decline in Colombia. Increases in field support and energy costs in 2010, compared to 2009, partially offset the increases in prices and volumes.

Other cost elements, such as certain labor costs and overhead, are not significant drivers of changes in cash flow because they are relatively stable within a narrow range over the short to intermediate term. Changes in these costs had a much smaller effect on cash flow than oil and gas prices and volumes.

The increase in operating cash flows in 2010, compared to 2009, also reflected higher chemical product prices for PVC, VCM, ethylene dichloride (EDC) and chlorine, which resulted in higher margins. In addition, all chemical product volumes increased in 2010, compared to 2009, due to improved market conditions, particularly for exports. The 2010 operating cash flows also reflected higher margins in the marketing and trading and gas processing businesses and increased earnings in the pipeline business.

The most important sources of the decrease in operating cash flow in 2009, compared to 2008, were lower average oil and natural gas prices, which were partially offset by increased oil and gas production volumes. In 2009, compared to 2008, Occidental’s global realized crude oil prices for continuing operations decreased by 38 percent and realized natural gas prices for continuing operations decreased by 57 percent in the U.S., where approximately 67 percent of Occidental’s natural gas was produced. Oil accounted for approximately 77 percent of Occidental's 2009 production. Occidental’s oil and gas sales volumes increased by 6 percent in 2009, compared to 2008, due to increased production in California, Midcontinent Gas, Latin America and Oman. Decreases in oil and gas production costs, purchased goods and services, energy costs and production and ad valorem taxes in 2009, compared to 2008, partially offset the effect of decreases in realized oil and natural gas prices in 2009.

The lower operating cash flows in 2009, compared to 2008, also reflected lower chemical product volumes as well as lower product prices, especially for caustic soda, PVC and VCM, which resulted in lower margins. The 2009 operating cash flows also reflected lower marketing income and lower margins in the gas processing business of the midstream and marketing segment.

In general, the overall impact of the chemical and midstream and marketing segments’ margins was less significant than the changes in oil and gas prices because the chemical and midstream and marketing segments' earnings and cash flows are significantly smaller than those for the oil and gas segment.

Other non-cash charges to income from continuing operations in 2010, 2009 and 2008 included stock incentive plan amortization, deferred compensation and asset retirement obligation accruals. The 2010 amount included a $275 million charge for asset impairments, predominately of gas properties in the Rocky Mountain region. The 2009 amount included an $8 million charge for the termination of rig contracts. The 2008 amount included a charge of $81 million for asset impairments of undeveloped acreage in Yemen, a $46 million charge for termination of rig contracts and a $90 million charge for chemical plant closure and impairments.

Operating cash flows for discontinued operations included after-tax charges of $111 million for asset impairments of certain Argentine producing properties in 2009 and $309 million for asset impairments of unproved acreage in Argentina in 2008.

In millions	2010			2009			2008
Capital expenditures
Oil and Gas	$	(3,166	)	$	(2,448	)	$	(3,307	)
Chemical		(237	)		(205	)		(240	)
Midstream and Marketing		(501	)		(554	)		(492	)
Corporate		(36	)		(38	)		(87	)
Total		(3,940	)		(3,245	)		(4,126	)
Other investing activities, net		(5,138	)		(2,082	)		(5,203	)
Net cash used by investing activities	$	(9,078	)	$	(5,327	)	$	(9,329	)

Occidental’s capital spending for 2011 is expected to be about $6.1 billion excluding the Shah Field development project, and will be focused on increasing oil and gas production and ensuring Occidental's returns remain well above its cost of capital given current oil and gas prices and the cost environment.

The estimated increase in capital expenditures in 2011 from $3.9 billion in 2010 will be allocated to the oil and gas segment. Of the $6.1 billion of estimated 2011 capital spending, the Middle East/North Africa will receive approximately 27 percent, California will receive 20 percent, Permian will receive 14 percent and Midcontinent and Other Interests will receive 14 percent.

The 2010 other investing activities, net amount included $4.9 billion in cash payments for the acquisitions of businesses and assets, including acquisitions of various interests in domestic oil and gas properties, in operated, producing and non-producing properties in the Permian Basin, mid-continent region and California, for approximately $2.5 billion, properties in North Dakota for approximately $1.4 billion, additional interests in Plains Pipeline for approximately $430 million and the remaining 50-percent interest in EHP for approximately $175 million, as well as foreign contract payments of approximately $225 million.

The 2009 other investing activities, net amount included $1.7 billion in cash payments for the

acquisitions of businesses and assets, including acquisitions of various oil and gas properties in California and the Permian Basin for approximately $610 million, interests in Phibro for approximately $370 million, additional interests in Plains Pipeline for approximately $330 million and various other acquisitions totaling approximately $320 million. The 2009 amount also included foreign signing bonuses of approximately $190 million, the bulk of which was scheduled under the 2008 Libya agreements.

The 2008 other investing activities, net amount included cash payments for the acquisitions of oil and gas interests from Plains Exploration & Production Company for $2.7 billion, an interest in Joslyn Oil Sands Project in Northern Alberta, Canada for approximately $500 million, interests in Plains Pipeline for approximately $330 million and approximately $700 million of various other acquisitions. The 2008 amount also included the first payment of the signature bonus under the Libya agreements of $450 million.

Investing activities for discontinued operations included capital expenditures of $310 million, $336 million and $538 million in 2010, 2009 and 2008, respectively.

Commitments at December 31, 2010, for major fixed and determinable capital expenditures during 2011 and thereafter were approximately $1.2 billion. Occidental expects to fund these commitments and capital expenditures with cash from operations.

In millions		2010			2009			2008
Net cash provided (used) by financing activities		$	1,083		$	(1,033	)	$	(1,510	)

The 2010 amount included net proceeds of approximately $2.6 billion from the December 2010 issuance of senior unsecured notes. The 2010 amount also included financing cash flow use of $311 million to retire other long-term debt.

The 2009 amount included net proceeds of $740 million from the issuance of 4.125-percent senior unsecured notes due 2016 and Occidental’s payment of $600 million of debt associated with Dolphin Energy.

The 2008 amount included the net proceeds of $985 million from the issuance of $1 billion of 7-percent senior unsecured notes due 2013. The 2008 amount also included $1.5 billion of cash paid for repurchases of 19.8 million shares of Occidental’s common stock at an average price of $76.33 per share.

Occidental also paid common stock dividends of $1.2 billion in 2010, $1.1 billion in 2009 and $940 million in 2008.

Off-Balance-Sheet Arrangements

In the course of its business activities, Occidental pursues a number of projects and transactions to meet its core business objectives. Occidental also makes commitments on behalf of unconsolidated entities. Some of these projects, transactions and commitments (off-balance-sheet arrangements) are not reflected on Occidental’s balance sheets, as a result of the application of generally accepted accounting principles (GAAP) to their specific terms. The following is a description of the business purpose and nature of these off-balance-sheet arrangements.

Dolphin

See "Oil and Gas Segment — Business Review — Qatar" for further information about Dolphin.

In July 2009, Dolphin Energy refinanced its debt on a limited-recourse basis. Occidental provided guarantees limited to certain political and other events. At December 31, 2010, the notional amount of the guarantees was approximately $300 million, which represented a substantial majority of Occidental's total guarantees. The fair value of these guarantees was immaterial.

Leases

Occidental has entered into various operating lease agreements, mainly for transportation equipment, power plants, machinery, terminals, storage facilities, land and office space. Occidental leases assets when leasing offers greater operating flexibility. Lease payments are generally expensed as cost of sales. For more information, see "Contractual Obligations."

Guarantees

Occidental has guaranteed certain equity investees' debt and has entered into various other guarantees including performance bonds, letters of credit, indemnities, commitments and other forms of guarantees provided by Occidental to third parties, mainly to provide assurance that OPC or its subsidiaries and affiliates will meet their various obligations (guarantees). At December 31, 2010, Occidental's guarantees were not material and a substantial majority of these amounts were represented by the Dolphin guarantees discussed above.

Contractual Obligations

The table below summarizes and cross-references certain contractual obligations that are reflected in the Consolidated Balance Sheets as of December 31, 2010 and/or disclosed in the accompanying Notes.

Payments Due by Year

Contractual Obligations

(in millions)

Total

2011

2012

and

2013

2014

and

2015