Occidental Petroleum (OXY) FY2025 10-K Risk Factors: 14 New, 19 Dropped

What the changes say

The OxyChem Transaction increases exposure to oil, NGL and natural-gas prices and leaves legacy environmental and indemnification liabilities.

What changed since the prior 10-K

New

New
Volatile global and local commodity pricing strongly affects the Company’s results of operations
The OxyChem Transaction increases exposure to volatile oil, NGL and natural-gas prices driven by global and local market forces.
New
Anadarko’s Tronox settlement may not be deductible for income tax purposes and the Company may be required to repay the tax refund Anadarko received in 2016 related to the deduction of the Tronox settlement payment
If the $5.2 billion Tronox settlement is nondeductible, Oxy may repay approximately $2.3 billion in refunds, tax benefits and interest.
New
The Company’s indebtedness could limit financial flexibility and increase vulnerability to adverse conditions
Heavy debt could restrict financial flexibility and capital-market access, especially amid higher rates, inflation, credit-market stress or weaker ratings.
New
The Company’s domestic and international operations are subject to extensive laws and regulations and may be adversely affected by the actions and decisions of many federal, state, local and international governments, political interests and advocacy groups
Changing tax laws, examinations, new industry taxes and the IRA’s 15% minimum tax and 1% buyback excise tax could increase costs.
New
The Company may be adversely affected by claims, litigation, government investigations and other proceedings
The OxyChem Transaction leaves Oxy with legacy environmental liabilities, indemnification obligations and a Berkshire Hathaway guaranty.
New
The Company is subject to operational hazards and catastrophic events
Blowouts, spills, severe weather, cyberattacks, terrorism, sea-level rise and water scarcity could interrupt onshore and offshore operations.
New
Health, safety and environmental laws and regulations and climate-related policies could have a material adverse effect on the Company’s financial condition, results of operations and cash flows
Complex health, safety, environmental and climate rules, including methane, CCUS and carbon pricing requirements, could raise costs or reduce demand.
New
The Company’s carbon management and sustainability initiatives and strategic objectives involve significant risks and uncertainties
Carbon management, direct-air-capture and sustainability initiatives may fail or incur financial, technological, regulatory, market and reputational costs.
New
The Company’s operations could be adversely affected if it is unable to source water or sand or dispose of surplus fluids
Shortages, prices, transportation limits or regulation affecting water and sand could disrupt hydraulic fracturing and constrain production.
New
Acquisitions, divestitures and other transactions may cause financial results to differ from the Company’s or investors’ expectations, may not deliver anticipated benefits and could disrupt current operations
Acquisitions, divestitures and restructuring, including OxyChem, could create unexpected liabilities, integration problems, costs or operational disruption.
New
An Occidental subsidiary acts as the general partner of WES, a publicly traded master limited partnership, which may involve potential legal liability
Oxy’s subsidiary as WES’s general partner could face breach-of-duty or conflict-of-interest claims and resulting liability.
New
The Company is exposed to cybersecurity, digital infrastructure and data security risks
Cyberattacks on Oxy or third-party systems, including ransomware, supply-chain attacks and infrastructure attacks, could disrupt operations or expose data.
New
cyber threat actors. While the Company uses advanced technologies, including AI-based tools, to strengthen its defenses and support business operations, such measures may not be successful in preventing or mitigating cyber threats
New
Insurance does not cover all risks, which could result in significant financial exposure

Dropped

Dropped
Occidental’s financial results correlate closely to the prices it obtains for its products, particularly oil and, to a lesser extent, NGL, natural gas and chemical products
Volatility in oil, NGL and natural-gas prices could reduce results, cash flow, spending and proved reserves.
Dropped
Occidental’s indebtedness may make it more vulnerable to economic downturns and adverse developments in its businesses. Downgrades in Occidental’s credit ratings or future increases in interest rates may negatively impact Occidental’s cost of capital and ability to access capital markets
Debt, credit downgrades and higher interest rates could limit flexibility, raise capital costs and restrict market access.
Dropped
Disruptions in the political, regulatory, economic, and social environments of the countries in which Occidental operates could adversely affect its reputation, financial condition, results of operations and cash flows
Political, regulatory, economic and social instability in countries where Oxy operates.
Dropped
Government actions and political instability may adversely affect Occidental’s businesses and results of operations
Government actions, political interests and changing laws or interpretations affecting Oxy’s businesses.
Dropped
Basin, listing of such species may impose significant operational requirements and costs and increase the potential for litigation and enforcement actions
Federal leasing, permitting, royalty, NEPA and endangered-species restrictions could hinder resource development.
Dropped
Claims, litigation, government investigations and other proceedings may adversely affect Occidental’s businesses, consolidated financial position, results of operations and cash flows
Claims, litigation, investigations and proceedings involving operations, commercial disputes, environmental compliance, safety and taxes.
Dropped
Compliance costs and liabilities associated with health, safety and environmental laws and regulations could have a material adverse effect on Occidental’s or its subsidiaries’ businesses, financial condition and results of operations
Health, safety and environmental compliance costs and liabilities.
Dropped
Occidental’s oil and gas reserve additions may not continue at the same rate and a failure to replace reserves may negatively affect Occidental’s businesses
Dropped
Occidental has previously recorded impairments of its assets and will continue to assess further impairments across its asset portfolio in the future
Dropped
Future costs associated with reducing emissions and carbon intensity, as well as impacts resulting from other risk factors described herein, could lead to impairments in the future, if such costs significantly increase Occidental’s breakeven economics
Failure to replace declining oil and gas reserves through exploration, development or acquisitions.
Dropped
Occidental is exposed to cyber-related risks
Dropped
to comply with these data privacy requirements or other applicable laws and regulations in this area could lead to a loss of sensitive information and result in significant regulatory or other penalties and legal liability
Past and potential future asset impairments from prices, development plans, costs and well results.
Dropped
Climate change and further regulation of GHG and other air emissions may adversely affect Occidental’s businesses and results of operations
Potential impairments from emissions-reduction costs; the displayed text also includes transaction risks.
Dropped
Occidental’s future results could be adversely affected if it is unable to execute new business strategies effectively
Cyber risks affecting information technology and industrial control systems.
Dropped
Occidental’s aspirations, goals and initiatives related to carbon management and overall sustainability expose it to numerous risks
Failure to meet data-privacy requirements could expose sensitive information and trigger penalties or liability.
Dropped
Occidental uses water and sand and is required to dispose of produced water. Occidental’s inability to source water and sand, or dispose of produced water, could adversely affect its operations
Dropped
In addition, Occidental must dispose of the surplus fluids produced from oil and gas operations, including produced water, directly or through the use of third-party vendors. The legal requirements related to the injection of produced water into a non-producing geologic formation are subject to change
Dropped
Occidental’s operations and financial results could be significantly negatively impacted by its offshore operations
Dropped
Occidental’s businesses may experience catastrophic events

Reworded

91% rewritten
The Company’s production from CO2 EOR operations may decline if it is unable to obtain sufficient amounts of CO2
The risk now includes regulatory constraints and market conditions, not just operational failures or economic difficulty obtaining CO2.
Was: Occidental uses CO2 for its EOR operations. Occidental’s production from these operations may decline if Occidental is not able to obtain sufficient amounts of CO2
82% rewritten
The Company operates in highly competitive environments and may not be able to source production or replace reserves
The focus shifts from competitive reserve acquisition toward declining production and specific geological, regulatory, capital, price and cost barriers to reserve replacement.
Was: Occidental’s oil and gas business operates in highly competitive environments, which affect, among other things, its ability to source production and replace reserves
67% rewritten
The Company’s oil and gas reserves and other significant financial statement items are estimates based on professional judgment and may be subject to revision
The language broadens reserve uncertainty to include different engineers’ estimates and potentially material variances in production, prices, taxes, revenues and expenditures.
Was: Occidental’s oil and gas reserves are estimates based on professional judgments and may be subject to revision
51% rewritten
The Company may experience delays, cost overruns, losses or unrealized expectations in development efforts and exploration activities
The updated version adds supply-chain constraints and removes the specifically listed risks of property or border disputes.
Was: Occidental may experience delays, cost overruns, losses or other unrealized expectations in development efforts and exploration activities

All 18 risk factors

Headings as the filing states them, in filing order.

Other

01Volatile global and local commodity pricing strongly affects the Company’s results of operationsNew
02Anadarko’s Tronox settlement may not be deductible for income tax purposes and the Company may be required to repay the tax refund Anadarko received in 2016 related to the deduction of the Tronox settlement paymentNew
03The Company’s indebtedness could limit financial flexibility and increase vulnerability to adverse conditionsNew
04The Company’s domestic and international operations are subject to extensive laws and regulations and may be adversely affected by the actions and decisions of many federal, state, local and international governments, political interests and advocacy groupsNew
05The Company may be adversely affected by claims, litigation, government investigations and other proceedingsNew
06The Company is subject to operational hazards and catastrophic eventsNew
07Health, safety and environmental laws and regulations and climate-related policies could have a material adverse effect on the Company’s financial condition, results of operations and cash flowsNew
08The Company’s carbon management and sustainability initiatives and strategic objectives involve significant risks and uncertaintiesNew
09The Company operates in highly competitive environments and may not be able to source production or replace reserves82% rewritten
10The Company’s oil and gas reserves and other significant financial statement items are estimates based on professional judgment and may be subject to revision67% rewritten
11The Company may experience delays, cost overruns, losses or unrealized expectations in development efforts and exploration activities51% rewritten
12The Company’s operations could be adversely affected if it is unable to source water or sand or dispose of surplus fluidsNew
13The Company’s production from CO2 EOR operations may decline if it is unable to obtain sufficient amounts of CO291% rewritten
14Acquisitions, divestitures and other transactions may cause financial results to differ from the Company’s or investors’ expectations, may not deliver anticipated benefits and could disrupt current operationsNew
15An Occidental subsidiary acts as the general partner of WES, a publicly traded master limited partnership, which may involve potential legal liabilityNew
16The Company is exposed to cybersecurity, digital infrastructure and data security risksNew
17cyber threat actors. While the Company uses advanced technologies, including AI-based tools, to strengthen its defenses and support business operations, such measures may not be successful in preventing or mitigating cyber threatsNew
18Insurance does not cover all risks, which could result in significant financial exposureNew

Other Occidental Petroleum 10-Ks

FY2024 10-K risk factors
23 risks
Occidental Petroleum's risk section is dominated by commodity price volatility, high debt from the CrownRock acquisition, and stringent environmental and climate regulations.
Filed Feb 18, 2025

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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.