Occidental Petroleum’s Strategic Shift: Buffett Partnership Sparks Investor Debate

Market Experts Question Valuation Metrics

A landmark $9.7 billion transaction between Occidental Petroleum and Warren Buffett’s Berkshire Hathaway has generated significant market discussion, though the initial reaction proved unexpectedly negative. The sale of Occidental’s chemical division, OxyChem, triggered an immediate 7% stock decline as investors questioned whether the energy giant secured adequate value.

The sharp sell-off following the deal announcement reflected deep-seated investor concerns. Several financial analysts had previously valued OxyChem above the final sale price. Paul Cheng of Scotiabank had estimated the chemical unit’s worth at approximately $12 billion, creating immediate skepticism about the transaction terms. In response, Occidental CEO Vicki Hollub defended the arrangement, noting that Berkshire Hathaway actually paid a higher earnings multiple than those observed in comparable chemical industry transactions.