The North Dakota regional headquarters of oil producer Occidental Petroleum Corp is seen in Dickinson, N.D., in October, 2015.Ernest Scheyder/Reuters
Occidental Petroleum Corp. did not waste time amending its investor materials to reflect U.S. President Donald Trump’s new name for one of its main operating regions, but executives and analysts had some difficulty making the shift during a quarterly earnings call.
In its fourth-quarter news release and slides, Houston-based Occidental OXY-N refers to its U.S. offshore oil and gas holdings as being located in the Gulf of America, reflecting the contentious unilateral change the President imposed on all federal references to the region made in January. The body of water has been known as the Gulf of Mexico since at least the late 16th century.
In doing so, Occidental follows such other large oil companies as BP PLC BPAQF and Chevron Corp. CVX-N, which are among the largest producers in the gulf located beyond southern U.S. shores and the eastern coast of Mexico.
Vicki Hollub, Occidental’s chief executive officer, had no trouble at all making the change, referring to the Gulf of America without hesitation in her remarks during the conference call Wednesday – even after an analyst asked about the Gulf of Mexico. Others tripped a bit.
Senior vice-president Kenneth Dillon stumbled over the unfamiliar moniker, once mashing both names together as he responded to a question about what might contribute to Occidental’s production growth there this year.
This is just one way Corporate America is changing course to thrive during the second term of Mr. Trump, who has let it be known he expects companies to align their business strategies with his agenda. He has made achieving energy dominance a key part of that, declaring a national energy emergency and urging the industry to “drill, baby, drill.”
Michael Wirth, chairman and CEO of Chevron, said during his company’s fourth-quarter call on Jan. 31: “We’re calling it Gulf of America. That’s the position of the U.S. government now.”
Tech companies including Apple and Google have added the Gulf of America name to their map functions. In the case of Google, Mexican President Claudia Sheinbaum has threatened to sue if the company does not fully restore the Gulf of Mexico name to its service. Currently, the water body appears in Google Maps as Gulf of America within the United States, as Gulf of Mexico within Mexico and Gulf of Mexico (Gulf of America) in Canada and elsewhere.
The White House barred Associated Press reporters from several events last week, including some in the Oval Office, citing the news agency’s policy on the name. The AP is using Gulf of Mexico to ensure that names of geographical features are recognizable around the world but also acknowledging Mr. Trump’s renaming of it.
The venture, called Stratos, is on track to start removing 250,000 tonnes of CO2 annually around the middle of this year, and ramp up to 500,000 tonnes a year in 2026. It is also planning a much larger direct-air-capture hub in southern Texas.
Stratos is a recipient of green incentives made available under former U.S. president Joe Biden’s Inflation Reduction Act and the hub project was selected to get up to US$500-million from the U.S. Department of Energy.
However, the Trump administration has placed the green incentives under review, and Ms. Hollub conceded that has added uncertainty to the project. Mr. Trump has famously referred to climate change as a scam.
Ms. Hollub said she has stressed the technology’s role in enhanced oil recovery – injecting the extracted CO2 into aging oil reservoirs could unlock 50 billion to 70 billion barrels of oil, extending U.S. energy independence by more than a decade. The subsidies will help develop that technology, she told analysts.
“And so taking CO2 out of the atmosphere is a technology that needs to work for the United States, and President Trump knows the business case for this. I’ve had several conversations with him,” she said.
Occidental reported a net loss of US$297-million or 32 US cents a share in the fourth quarter, compared with a year-earlier profit of US$1.03-billion or US$1.08 U.S. a share. In the most recent quarter, the company booked a US$1.1-billion after-tax charge composed mostly of a long-term environmental liability. Without the charge, the company would have had a net income of US$792-million or 80 US cents a share.
With reports from the Associated Press