How a failed tax shelter became a global oil giant through strategic pivots

Countries & Cities · Published 3 October 2026 Swipe more like this →

In short: Occidental Petroleum began in 1920 as an unprofitable driller in Los Angeles. It was only after Armand Hammer bought the company in 1957, intending to use it as a tax shelter, that a series of lucky strikes and aggressive international expansions transformed it into a major global energy player.

When Armand Hammer acquired a controlling interest in 1957, he initially viewed Occidental as a tax-saving vehicle. That plan evaporated when the company’s rigs hit a rich crude oil deposit in southern California. This success, followed by a massive 1961 natural gas discovery near Stockton, shifted the company’s trajectory. By 1967, Hammer had secured a lucrative oil concession in Libya, cementing Occidental’s status as a significant international operator. However, the company’s history is defined by constant volatility; it faced nationalization threats in Libya during the 1970s and eventually suspended operations there in 1986 due to deteriorating U.S.-Libya relations.

The firm’s identity underwent radical shifts throughout the late 20th century. Under Hammer, Occidental diversified into coal, meatpacking, and chemicals, eventually forming OxyChem in 1987. This period of sprawl ended after Hammer’s death in 1990. His successor, Ray R. Irani, spent two decades dismantling the conglomerate, selling off non-core assets like meatpacking and coal to focus exclusively on oil and gas production. This pivot was remarkably effective, with the company’s market capitalization growing from $5.5 billion to $80 billion during Irani’s tenure, despite intense scrutiny over his high compensation.

Today, Occidental remains a major force in the energy sector, balancing its core hydrocarbon exploration with chemical production. The company has navigated complex geopolitical landscapes, from the North Sea to the Persian Gulf, and has frequently adjusted its portfolio through high-stakes acquisitions and divestments, such as the 1998 purchase of the Elk Hills Field and the 2000 acquisition of Altura Energy. These moves reflect a legacy of aggressive adaptation, moving from a small, struggling local driller to a massive, multinational corporation that continues to shape global energy markets.

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