Occidental Considers Sale of Anadarko’s Western Midstream

Occidental Petroleum Corp. is looking for someone to buy and take majority control of Western Midstream Partners, a pipeline operator who Occidental will be set to inherit after acquiring Anadarko Petroleum Corp for $38 billion.

Western Midstream, formed by Anadarko, has control of more than 15,200 miles of pipelines and around 6 dozen processing and treatment facilities in Texas and the Midwest. Anadarko gives majority of its profits to investors in Western Midstream in order to receive tax breaks.

Many have said that Occidental will gain half of Anadarko’s interest (Anadarko owns 55.5%) in Western Midstream and its general partner, however a financial advisor is working on soliciting offers for these stakes on Occidental’s behalf. The buyer could gain 45% of the public trades for Western Midstream and leave Occidental with a minority stake, allowing Occidental to have some say in how its oil and gas gets to market. While it has been observed that Occidental is looking at options to sell, no decision has been made yet.

Vicki Hollub, Occidental’s chief executive officer, commented on May 6, “We don’t really feel like we have to necessarily own infrastructure to take advantage of it. We would be willing to consider the optimization, monetization of that sooner rather than later depending on the potential buyer.”

Occidental is planning on selling $8.8 billion of Anadarko’s operations in Africa to Total, and another potential sale between $10-15 billion could help them in meeting a goal of paying down debt.