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Warren Buffett Buys Up Even More Occidental Petroleum

Warren Buffett’s Berkshire Hathaway bought additional shares in Occidental Petroleum this week, raising its stake in the U.S. oil firm to 24.4%, a regulatory filing shows.

Berkshire Hathaway acquired 3,457,222 Oxy common stock this week, at around $58 per share for some $201 million.

As a result of the latest transactions, Berkshire Hathaway now owns 217,330,133 common shares of Occidental, which are worth around $12.7 billion.  

Earlier this month, Warren Buffett said that Berkshire Hathaway would not be seeking full control of Occidental Petroleum despite having amassed a stake of over 23%.

“We don’t know where the price of oil will be, but we like Occidental’s position in the Permian,” Buffett told Berkshire Hathaway’s shareholders at the company’s annual meeting in early May.

“There’s speculation about us buying control, we’re not going to buy control,” Buffett added.

“We wouldn’t know what to do with it.”

Three years ago, Berkshire Hathaway funded Oxy’s takeover of Anadarko with $10 billion in the form of equity. It was as part of this deal that the investment firm received the stock purchase warrants that could see it acquire 20% or more in Occidental.

To date, Berkshire is Oxy’s largest shareholder. Besides the purchase warrants, the company owns $10 billion worth of Oxy preferred stock, which carries an 8% dividend.

Oxy bought Anadarko for $55 billion in 2019, making it one of the biggest M&A deals in energy over the past few years. In that, it outbid Chevron, which had earlier announced a bid for the energy company.

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“We will not be making any offer for control of Occidental, but we love the shares we have,” Buffett said at the Berkshire Hathaway annual meeting.

“We may or may not own more in the future but we certainly have warrants on what we got as part of the original deal on a very substantial amount of stock around $59 a share, and warrants last a long time, and I’m glad we have them.”  

By Charles Kennedy for Oilprice.com

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