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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 1-9210
_____________________

OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware95-4035997
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
5 Greenway Plaza, Suite 110
Houston,Texas77046
(Address of principal executive offices) (Zip Code)
(713) 215-7000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.20 par valueOXYNew York Stock Exchange
Warrants to Purchase Common Stock, $0.20 par value
OXY WSNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
þ Yes    No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
þ Yes    No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer        þ    Accelerated Filer            Non-Accelerated Filer     
Smaller Reporting Company        Emerging Growth Company    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes   þ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class Outstanding as of March 31, 2022 
 Common Stock, $0.20 par value 937,190,982



TABLE OF CONTENTSPAGE
Part IFinancial Information
Item 1.
Consolidated Condensed Balance Sheets — March 31, 2022 and December 31, 2021
6
Consolidated Condensed Statements of Equity — Three months ended March 31, 2022 and 2021
Note 4—Divestitures and Other Transactions
Note 7Income Taxes
Item 2.
Item 3.
Item 4.
Part IIOther Information
Item 1.
Item 1A.
Item 2.
Item 6.

1


ABBREVIATIONS USED WITHIN THIS DOCUMENT    
$/Bblprice per barrel
AndesAndes Petroleum Ecuador Ltd.
AOCAdministrative Order on Consent
Bcfbillions of cubic feet
Boebarrels of oil equivalent
CERCLAComprehensive Environmental Response, Compensation, and Liability Act
CO2
carbon dioxide
DD&Adepreciation, depletion and amortization
EPAEnvironmental Protection Agency
LIFOlast in first out
MaxusMaxus Energy Corporation
Mbblthousands of barrels
Mboethousands of barrels equivalent
Mboe/dthousands of barrels equivalent per day
Mcfthousand cubic feet
MMbblmillions of barrels
MMcfmillions of cubic feet
NGLnatural gas liquids
NPLNational Priorities List
OccidentalOccidental Petroleum Corporation, a Delaware corporation and one or more entities in which it owns a controlling interest (subsidiaries)
OEPCOccidental Exploration and Production Company
OPECOrganization of the Petroleum Exporting Countries
OxyChemOccidental Chemical Corporation
OXY USA
OXY USA Inc.
RCFrevolving credit facility
RepsolRepsol, S.A.
RODRecord of Decision
WESWestern Midstream Partners, LP
WTIWest Texas Intermediate
YPFYPF S.A.
Zero CouponsZero Coupon senior notes due 2036
2021 Form 10-KOccidental’s Annual Report on Form 10-K for the year ended December 31, 2021
2


PART I    FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)
Consolidated Condensed Balance SheetsOccidental Petroleum Corporation and Subsidiaries
millionsMarch 31, 2022December 31, 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents$1,909 $2,764 
Trade receivables, net5,434 4,208 
Inventories1,406 1,846 
Assets held for sale 72 
Other current assets1,309 1,321 
Total current assets10,058 10,211 
INVESTMENTS IN UNCONSOLIDATED ENTITIES3,015 2,938 
PROPERTY, PLANT AND EQUIPMENT
Oil and gas101,511 101,251 
Chemical7,588 7,571 
Midstream and marketing7,483 8,371 
Corporate960 964 
Gross property, plant and equipment117,542 118,157 
Accumulated depreciation, depletion and amortization(58,313)(58,227)
Net property, plant and equipment59,229 59,930 
OPERATING LEASE ASSETS689 726 
LONG-TERM RECEIVABLES AND OTHER ASSETS, NET1,231 1,231 
TOTAL ASSETS$74,222 $75,036 
The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

3


Consolidated Condensed Balance SheetsOccidental Petroleum Corporation and Subsidiaries
millions, except share and per-share amountsMarch 31, 2022December 31, 2021
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt (a)
$507 $186 
Current operating lease liabilities173 186 
Accounts payable4,664 3,899 
Accrued liabilities3,356 4,046 
Liabilities of assets held for sale 7 
Total current liabilities8,700 8,324 
LONG-TERM DEBT, NET
Long-term debt, net (b)
25,865 29,431 
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes, net4,806 7,039 
Asset retirement obligations3,634 3,687 
Pension and postretirement obligations1,541 1,540 
Environmental remediation liabilities933 944 
Operating lease liabilities558 585 
Other3,278 3,159 
Total deferred credits and other liabilities14,750 16,954 
STOCKHOLDERS' EQUITY
Preferred stock, at $1.00 per share par value (100,000 shares as of March 31, 2022 and December 31, 2021)
9,762 9,762 
Common stock, at $0.20 per share par value, authorized shares: 1.5 billion, issued shares: 2022 — 1,087,270,122 shares and 2021 — 1,083,423,094 shares
217 217 
Treasury stock: 2022 — 150,079,140 shares and 2021 — 149,348,394 shares
(10,709)(10,673)
Additional paid-in capital16,785 16,749 
Retained earnings9,032 4,480 
Accumulated other comprehensive loss(180)(208)
Total stockholders' equity24,907 20,327 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$74,222 $75,036 
(a)    Included $99 million and $85 million of current finance lease liabilities as of March 31, 2022 and December 31, 2021, respectively.
(b)    Included $540 million and $504 million of finance lease liabilities as of March 31, 2022 and December 31, 2021, respectively.

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.
4


Consolidated Condensed Statements of OperationsOccidental Petroleum Corporation and Subsidiaries
Three months ended March 31,
millions, except per-share amounts20222021
REVENUES AND OTHER INCOME
Net sales$8,349 $5,293 
Interest, dividends and other income49 75 
Gains on sales of assets and equity investments, net135 111 
Total8,533 5,479 
COSTS AND OTHER DEDUCTIONS
Oil and gas operating expense864 776 
Transportation and gathering expense347 329 
Chemical and midstream cost of sales818 594 
Purchased commodities811 558 
Selling, general and administrative expenses196 166 
Other operating and non-operating expense299 258 
Taxes other than on income335 210 
Depreciation, depletion and amortization1,643 2,194 
Asset impairments and other charges 135 
Anadarko acquisition-related costs65 41 
Exploration expense25 28 
Interest and debt expense, net371 395 
Total5,774 5,684 
Income (loss) before income taxes and other items2,759 (205)
OTHER ITEMS
Gains on interest rate swaps, net135 399 
Income from equity investments189 121 
Total324 520 
Income from continuing operations before income taxes3,083 315 
Income tax benefit (expense)1,793 (16)
Income from continuing operations4,876 299 
Loss from discontinued operations, net of tax (445)
NET INCOME (LOSS)4,876 (146)
Less: Preferred stock dividends(200)(200)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS$4,676 $(346)
PER COMMON SHARE
Income from continuing operations—basic$4.96 $0.11 
Loss from discontinued operations—basic$ $(0.48)
Net income (loss) attributable to common stockholders—basic$4.96 $(0.37)
Income from continuing operations—diluted$4.65 $0.10 
Loss from discontinued operations—diluted$ $(0.46)
Net income (loss) attributable to common stockholders—diluted$4.65 $(0.36)
The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

5


Consolidated Condensed Statements of Comprehensive Income (Loss)Occidental Petroleum Corporation and Subsidiaries
Three months ended March 31,
millions20222021
Net income (loss)$4,876 $(146)
Other comprehensive income items:
Gains on derivatives (a)
27 1 
Pension and postretirement gains (b)
1 52 
Other comprehensive income, net of tax28 53 
Comprehensive income (loss) attributable to preferred and common stockholders$4,904 $(93)
(a)     Net of tax expense of $8 million and zero for the three months ended March 31, 2022 and 2021, respectively.
(b)     Net of tax expense of zero and $15 million for the three months ended March 31, 2022 and 2021, respectively.

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.
6


Consolidated Condensed Statements of Cash FlowsOccidental Petroleum Corporation and Subsidiaries
Three months ended March 31,
millions20222021
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss)$4,876 $(146)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Discontinued operations, net 445 
Depreciation, depletion and amortization of assets1,643 2,194 
Deferred income tax benefit(2,240)(81)
Asset impairments and other charges 135 
Gain on sales of assets, net(135)(111)
Other noncash reconciling items34 (301)
Changes in operating assets and liabilities:
Increase in receivables(1,238)(937)
Decrease (increase) in inventories439 (311)
Increase in other current assets(158)(82)
Decrease in accounts payable and accrued liabilities(187)(42)
Increase in current domestic and foreign income taxes205 25 
Operating cash flow from continuing operations3,239 788 
Operating cash flow from discontinued operations, net of taxes 122 
Net cash provided by operating activities3,239 910 
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditures(858)(579)
Change in capital accrual(39)(75)
Purchases of businesses and assets, net(29)(105)
Proceeds from sales of assets, net267 496 
Equity investments and other, net(3)(10)
Investing cash flow from continuing operations(662)(273)
Investing cash flow from discontinued operations (9)
Net cash used by investing activities(662)(282)
CASH FLOW FROM FINANCING ACTIVITIES
Payments of long-term debt(3,259)(174)
Proceeds from issuance of common stock27 9 
Purchases of treasury stock(36)(3)
Cash dividends paid on common and preferred stock(216)(211)
Financing portion of net cash received for derivative instruments79 45 
Other financing, net(24)(18)
Financing cash flow from continuing operations(3,429)(352)
Financing cash flow from discontinued operations (2)
Net cash used by financing activities(3,429)(354)
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents(852)274 
Cash, cash equivalents, restricted cash and restricted cash equivalents — beginning of period2,803 2,194 
Cash, cash equivalents, restricted cash and restricted cash equivalents — end of period$1,951 $2,468 
The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.

7


Consolidated Condensed Statements of EquityOccidental Petroleum Corporation and Subsidiaries
Equity Attributable to Common Stock
millions, except per-share amountsPreferred StockCommon StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Equity
Balance as of December 31, 2020$9,762 $216 $(10,665)$16,552 $2,996 $(288)$18,573 
Net loss— — — — (146)— (146)
Other comprehensive income, net of
tax
— — — — — 53 53 
Dividends on common stock,
  $0.01 per share
— — — — (11)— (11)
Dividends on preferred stock,
  $2,000 per share
— — — — (200)— (200)
Shareholder warrants exercised— — — 3 — — 3 
Issuance of common stock and
other, net
— 1 — 30 — — 31 
Purchases of treasury stock— — (3)— — — (3)
Balance as of March 31, 2021$9,762 $217 $(10,668)$16,585 $2,639 $(235)$18,300 

Equity Attributable to Common Stock
millions, except per-share amountsPreferred StockCommon StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Equity
Balance as of December 31, 2021$9,762 $217 $(10,673)$16,749 $4,480 $(208)$20,327 
Net income    4,876  4,876 
Other comprehensive income, net
  of tax
     28 28 
Dividends on common stock,
  $0.13 per share
    (124) (124)
Dividends on preferred stock,
  $2,000 per share
    (200) (200)
Shareholder warrants exercised   20   20 
Options exercised   7   7 
Issuance of common stock and
  other, net
   9   9 
Purchases of treasury stock  (36)   (36)
Balance as of March 31, 2022$9,762 $217 $(10,709)$16,785 $9,032 $(180)$24,907 

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.
8


Notes to Consolidated Condensed Financial StatementsOccidental Petroleum Corporation and Subsidiaries
NOTE 1 - GENERAL

NATURE OF OPERATIONS
Occidental conducts its operations through various subsidiaries and affiliates. Occidental has made its disclosures in accordance with United States generally accepted accounting principles as they apply to interim reporting, and condensed or omitted, as permitted by the U.S. Securities and Exchange Commission’s rules and regulations, certain information and disclosures normally included in Consolidated Financial Statements and the notes thereto. These unaudited Consolidated Condensed Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto in Occidental's Annual Report on Form 10-K for the year ended December 31, 2021.
In the opinion of Occidental’s management, the accompanying unaudited Consolidated Condensed Financial Statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present Occidental’s Consolidated Condensed Balance Sheets as of March 31, 2022 and December 31, 2021, and the Consolidated Condensed Statements of Operations, Comprehensive Income (Loss), Cash Flows and Stockholders' Equity for the three months ended March 31, 2022 and 2021. Certain data in the Consolidated Condensed Financial Statements and notes for prior periods have been reclassified to conform to the current presentation. The income and cash flows for the periods ended March 31, 2022 and 2021 are not necessarily indicative of the income or cash flows to be expected for the full year.

CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS
Occidental considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents or restricted cash equivalents. The cash equivalents and restricted cash equivalents balances for the periods presented included investments in government money market funds in which the carrying value approximates fair value.
The following table provides a reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents as reported in the Consolidated Condensed Statements of Cash Flows as of March 31, 2022 and 2021:

millions20222021
Cash and cash equivalents$1,909 $2,270 
Restricted cash and restricted cash equivalents included in other current assets25 183 
Restricted cash and restricted cash equivalents included in long-term receivables and other assets, net17 15 
Cash, cash equivalents, restricted cash and restricted cash equivalents$1,951 $2,468 

SUPPLEMENTAL CASH FLOW INFORMATION
The following table represents U.S. federal, domestic state and international income taxes paid, tax refunds received and interest paid related to continuing operations during the three months ended March 31, 2022 and 2021, respectively.

millions20222021
Income tax payments$208 $122 
Income tax refunds received$70 $42 
Interest paid (a)
$598 $607 
(a)     Net of capitalized interest of $11 million and $15 million for the three months ended March 31, 2022 and 2021, respectively.

DISCONTINUED OPERATIONS
During the first quarter of 2021, Occidental recorded a $403 million after-tax loss contingency in discontinued operations associated with its former operations in Ecuador, see Note 10 - Lawsuits, Claims, Commitments and Contingencies. In addition, the results of operations for Ghana for the three months ended March 31, 2021, an after-tax loss of $42 million, are presented as discontinued operations.

9


NOTE 2 - REVENUE

Revenue from customers is recognized when obligations under the terms of a contract with our customers are satisfied; this generally occurs with the delivery of oil, NGL, gas, chemicals or services, such as transportation. As of March 31, 2022, trade receivables, net, of $5.4 billion represent rights to payment, for which Occidental has satisfied its obligations under a contract and its right to payment is conditioned only on the passage of time.
The following table shows a reconciliation of revenue from customers to total net sales for the three months ended March 31, 2022 and 2021:

Three months ended March 31,
millions20222021
Revenue from customers$8,213 $5,184 
All other revenues (a)
136 109 
Net sales$8,349 $5,293 
(a)    Includes net marketing derivatives, collars and calls and chemical exchange contracts in 2021 and the same in 2022 with the exception of the collars and calls which expired on or before December 31, 2021.

10


DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS
The table below presents Occidental's revenue from customers by segment, product and geographical area. The oil and gas segment typically sells its oil, NGL and gas at the lease or concession area. Chemical segment revenues are shown by geographic area based on the location of the sale. Excluding net marketing revenue, midstream and marketing segment revenues are shown by the location of sale.

millionsUnited StatesInternationalEliminationsTotal
Three months ended March 31, 2022
Oil and gas
Oil$4,048 $751 $ $4,799 
NGL698 62  760 
Gas455 58  513 
Other2 1  3 
Segment total$5,203 $872 $ $6,075 
Chemical$1,602 $81 $ $1,683 
Midstream and marketing$648 $99 $ $747 
Eliminations$ $ $(292)$(292)
Consolidated$7,453 $1,052 $(292)$8,213 
            
millionsUnited StatesInternationalEliminationsTotal
Three months ended March 31, 2021
Oil and gas
Oil$2,464 $549 $ $3,013 
NGL384 52  436 
Gas253 64  317 
Other(31)  (31)
Segment total$3,070 $665 $ $3,735 
Chemical$1,037 $50 $ $1,087 
Midstream and marketing$497 $131 $ $628 
Eliminations$— $— $(266)$(266)
Consolidated$4,604 $846 $(266)$5,184 

NOTE 3 - INVENTORIES

Finished goods primarily represents oil, which is carried at the lower of weighted-average cost or net realizable value, and caustic soda and chlorine, which are valued under the LIFO method. Inventories consisted of the following:

millionsMarch 31, 2022December 31, 2021
Raw materials$108 $96 
Materials and supplies798 783 
Commodity inventory and finished goods599 1,066 
1,505 1,945 
Revaluation to LIFO(99)(99)
Total
$1,406 $1,846 

11


NOTE 4 - DIVESTITURES AND OTHER TRANSACTIONS

DIVESTITURES
In November 2021, Occidental entered into an agreement to sell certain non-strategic assets in the Permian Basin. The transaction closed in January 2022 for net cash proceeds of approximately $190 million. The difference in the proved assets' net book value and adjusted purchase price was treated as a normal retirement, which resulted in no gain or loss being recognized. The difference in the unproved assets' net book value and adjusted purchase price resulted in a gain on sale of approximately $123 million. The gain has been presented within gains on sales of assets and equity investments, net in the Consolidated Condensed Statements of Operations.

NOTE 5 - LONG-TERM DEBT

The following table summarizes Occidental's outstanding debt, including finance lease liabilities:

millionsMarch 31, 2022December 31, 2021
Total borrowings at face value$25,187 $28,493 
Adjustments to book value:
Unamortized premium, net660 670 
Debt issuance costs(114)(135)
Net book value of debt$25,733 $29,028 
Long-term finance leases540 504 
Current finance leases99 85 
Total debt and finance leases$26,372 $29,617 
Less current maturities of financing leases(99)(85)
Less current maturities of long-term debt(408)(101)
Long-term debt, net$25,865 $29,431 
DEBT ACTIVITY
In the first quarter of 2022, Occidental used cash on hand to repay debt with maturities ranging from 2022 through 2049 by $3.3 billion. Subsequent to March 31, 2022, but before the date of this filing, Occidental paid off additional debt with maturities ranging from 2024 to 2049 and principal of $263 million.

FAIR VALUE OF DEBT
The estimated fair value of Occidental’s debt as of March 31, 2022, and December 31, 2021, substantially all of which was classified as Level 1, was approximately $26.2 billion and $31.1 billion, respectively.

NOTE 6 - DERIVATIVES

OBJECTIVE AND STRATEGY
Occidental uses a variety of derivative financial instruments and physical contracts to manage its exposure to commodity price fluctuations, interest rate risks and transportation commitments and to fix margins on the future sale of stored commodity volumes. Occidental also enters into derivative financial instruments for trading purposes.
Occidental may elect normal purchases and normal sales exclusions when physically delivered commodities are purchased or sold to a customer. Occidental occasionally applies cash flow hedge accounting treatment to derivative financial instruments to lock in margins on the forecasted sales of its natural gas storage volumes, and at times for other strategies, such as to lock in rates on debt issuances. Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty.

12


DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
As of March 31, 2022, Occidental’s derivatives not designated as hedges consisted of interest rate swaps and marketing derivatives.
Derivative instruments that are not designated as hedging instruments are required to be recorded on the balance sheet at fair value. Changes in fair value will impact Occidental’s earnings through mark-to-market adjustments until the physical commodity is delivered or the financial instrument is settled. The fair value does not reflect the realized or cash value of the instrument.

INTEREST RATE SWAPS
Occidental's interest rate swap contracts lock in a fixed interest rate in exchange for a floating interest rate indexed to the three-month London InterBank Offered Rate throughout the reference period. Net gains and losses associated with interest rate swaps are recognized currently in gains on interest rate swaps, net in the Consolidated Condensed Statements of Operations.
Occidental had the following outstanding interest rate swaps as of March 31, 2022:

millions, except percentagesMandatoryWeighted-Average
Notional Principal AmountReference PeriodTermination DateInterest Rate
$275 September 2016 - 2046September 20226.709 %
$450 September 2017 - 2047September 20236.445 %

Depending on market conditions, liability management actions or other factors, Occidental may enter into offsetting interest rate swap positions as well as amend or settle certain or all of the currently outstanding interest rate swaps.
Derivative settlements and collateralization are classified as cash flow from operating activities unless the derivatives contain an other-than-insignificant financing element, in which case the settlements and collateralization are classified as cash flows from financing activities. In the first quarter of 2022, net cash payments related to settlements of interest rate swap agreements were $23 million. Additionally, $102 million of collateral was returned.

MARKETING DERIVATIVES
Occidental's marketing derivative instruments not designated as hedges are short-duration physical and financial forward contracts. A substantial majority of Occidental's physically settled derivative contracts are index-based and carry no mark-to-market valuation in earnings. As of March 31, 2022, the weighted-average settlement price of these forward contracts was $96.63 per barrel and $5.15 per Mcf for crude oil and natural gas, respectively. The weighted-average settlement price was $74.85 per barrel and $4.61 per Mcf for crude oil and natural gas, respectively, as of December 31, 2021. Net gains and losses associated with marketing derivative instruments not designated as hedging instruments are recognized currently in net sales.
The following table summarizes net short volumes associated with the outstanding marketing commodity derivatives not designated as hedging instruments.

 March 31, 2022December 31, 2021
 Oil commodity contracts
Volume (MMbbl)(23)(28)
Natural gas commodity contracts
Volume (Bcf)(111)(136)

13


FAIR VALUE OF DERIVATIVES
The following tables present the fair values of Occidental’s outstanding derivatives. Fair values are presented at gross amounts below, including when the derivatives are subject to netting arrangements, and are presented on a net basis in the Consolidated Condensed Balance Sheets.

millionsFair Value Measurements Using
Netting (a)
Total Fair Value
Balance Sheet ClassificationsLevel 1Level 2Level 3
March 31, 2022
Marketing Derivatives
Other current assets$3,486 $323 $ $(3,708)$101 
Long-term receivables and other assets, net71 1  (71)1 
Accrued liabilities(3,796)(264) 3,708 (352)
Deferred credits and other liabilities - other(73)  71 (2)
Interest Rate Swaps
Accrued liabilities (250)  (250)
Deferred credits and other liabilities - other (343)  (343)
December 31, 2021
Marketing Derivatives
Other current assets$1,516 $173 $ $(1,645)$44 
Long-term receivables and other assets, net4 1  (4)1 
Accrued liabilities(1,608)(196) 1,645 (159)
Deferred credits and other liabilities - other(4)  4  
Interest Rate Swaps
Accrued liabilities (315)  (315)
Deferred credits and other liabilities - other (436)  (436)
(a)These amounts do not include collateral. As of March 31, 2022 and December 31, 2021, $221 million and $323 million of collateral related to interest rate swaps had been netted against derivative liabilities, respectively. Occidental netted $296 million and $110 million of collateral deposited with brokers against derivative liabilities related to marketing derivatives as of March 31, 2022 and December 31, 2021, respectively.

14


GAINS AND LOSSES ON DERIVATIVES
The following table presents gains and (losses) related to Occidental's derivative instruments on the Consolidated Condensed Statements of Operations:

millionsThree months ended March 31,
Income Statement Classification20222021
Collars and Calls
Net sales (a)
$ $(72)
Marketing Derivatives
Net sales (b)
$135 $180 
Interest Rate Swaps
Gains on interest rate swaps, net$135 $399 
(a)    All of Occidental's calls and collars expired on or before December 31, 2021.
(b)    Includes derivative and non-derivative marketing activity.

CREDIT RISK
Certain of Occidental's over-the-counter derivative instruments contain credit-risk-contingent features, primarily tied to credit ratings for Occidental or its counterparties, which may affect the amount of collateral that each party would need to post. The aggregate fair value of derivative instruments with credit-risk-related contingent features for which a net liability position existed as of March 31, 2022, was $34 million (net of $221 million of collateral), which was primarily related to interest rate swaps. The aggregate fair value of derivative instruments with credit-risk-contingent features for which a net liability position existed as of December 31, 2021, was $107 million (net of $323 million of collateral), which was primarily related to interest rate swaps.

NOTE 7 - INCOME TAXES

LEGAL ENTITY REORGANIZATION
To align Occidental’s legal entity structure with the nature of its business activities after completing the acquisition of Anadarko and subsequent large scale post-Acquisition divestiture program, management undertook a legal entity reorganization that was completed in the first quarter of 2022.
As a result of this legal entity reorganization, management made an adjustment to the tax basis in a portion of its operating assets, thus reducing Occidental’s deferred tax liabilities. Accordingly, in the first quarter of 2022, Occidental recorded an estimated non-cash tax benefit of $2.6 billion in connection with this reorganization. The timing of any reduction in Occidental’s future cash taxes as a result of this legal entity reorganization will be dependent on a number of factors, including prevailing commodity prices, capital activity level and production mix. Further refinement of the non-cash tax benefit may be necessary as Occidental finalizes its tax basis calculations, its tax returns and other information.

15


The following summarizes components of income tax benefit (expense) on continuing operations for the three months ended March 31, 2022 and 2021:

Three months ended
millionsMarch 31, 2022March 31, 2021
Income from continuing operations before income taxes$3,083 $315 
Current
Federal$(215)$30 
State and Local(34)(10)
Foreign(198)(117)
Total current tax expense$(447)$(97)
Deferred
Federal2,213 78 
State and Local73 4 
Foreign(46)(1)
Total deferred tax benefit$2,240 $81 
Total income tax benefit (expense)$1,793 $(16)
Income from continuing operations$4,876 $299 
Worldwide effective tax rate(58)%5 %

Occidental's worldwide effective tax rate for the three months ended March 31, 2022 was negative 58%. The difference between the negative 58% effective tax rate for income from continuing operations for the three months ended March 31, 2022, and the 21% U.S. federal statutory tax rate was primarily driven by a non-cash tax benefit associated with Occidental's legal entity reorganization, as described above, partially offset by higher tax rates in the foreign jurisdictions in which Occidental operates. The difference between the 5% effective tax rate for income from continuing operations for the three months ended March 31, 2021, and the 21% U.S. federal statutory tax rate was primarily driven by the jurisdictional mix of income. U.S. losses, taxed at a U.S. federal statutory rate of 21%, were mostly offset by foreign income that is subject to tax at statutory rates as high as 55%. In addition, the effective tax rate was impacted by benefits associated with the settlement of federal tax audit matters.

NOTE 8 - RETIREMENT AND POSTRETIREMENT BENEFIT PLANS

Occidental has various defined benefit pension plans for certain domestic union, non-union hourly and foreign national employees. In addition, Occidental also provides medical and other benefits for certain active, retired and disabled employees and their eligible dependents.
Net periodic benefit gains related to pension benefits were zero and $11 million for the three months ended March 31, 2022, and 2021, respectively.
Net periodic benefit costs related to postretirement benefits were $19 million and $20 million for the three months ended March 31, 2022, and 2021, respectively.
Occidental's contributions to its defined benefit plans were $1 million and $147 million for the three months ended March 31, 2022, and 2021, respectively. The 2021 contributions were primarily due to distributions related to a separation program and freezing of benefit accruals for Anadarko employees in 2020 and for contributions which were previously deferred in 2020 under the Coronavirus Aid, Relief, and Economic Security Act.

NOTE 9 - ENVIRONMENTAL LIABILITIES AND EXPENDITURES

Occidental’s operations are subject to stringent federal, regional, state, provincial, tribal, local and international laws and regulations related to improving or maintaining environmental quality. The laws that require or address environmental remediation, including CERCLA and similar federal, regional, state, provincial, tribal, local and international laws, may apply retroactively and regardless of fault, the legality of the original activities or the current ownership or control of sites.
16


Occidental or certain of its subsidiaries participate in or actively monitor a range of remedial activities and government or private proceedings under these laws with respect to alleged past practices at operating, closed and third-party sites. Remedial activities may include one or more of the following: investigation involving sampling, modeling, risk assessment or monitoring; cleanup measures including removal, treatment or disposal; or operation and maintenance of remedial systems. The environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, punitive damages, civil penalties, injunctive relief and government oversight costs.

ENVIRONMENTAL REMEDIATION
As of March 31, 2022, Occidental participated in or monitored remedial activities or proceedings at 166 sites. The following table presents Occidental’s current and non-current environmental remediation liabilities as of March 31, 2022. The current portion, $155 million, is included in accrued liabilities and the non-current portion, $933 million, in deferred credits and other liabilities-environmental remediation liabilities.
Occidental’s environmental remediation sites are grouped into four categories: sites listed or proposed for listing by the U.S. EPA on the CERCLA NPL and three categories of non-NPL sites—third-party sites, Occidental-operated sites and closed or non-operated Occidental sites.

millions, except number of sites Number of SitesRemediation Balance
NPL sites30 $427 
Third-party sites69 269 
Occidental-operated sites15 120 
Closed or non-operated Occidental sites52 272 
Total166 $1,088 

As of March 31, 2022, Occidental’s environmental liabilities exceeded $10 million each at 20 of the 166 sites described above, and 98 of the sites had liabilities from zero to $1 million each. Based on current estimates, Occidental expects to expend funds corresponding to approximately 40% of the period-end remediation balance at the sites described above over the next three to four years and the remaining balance at these sites over the subsequent 10 or more years. Occidental believes its range of reasonably possible additional losses beyond those liabilities recorded for environmental remediation at these sites could be up to $1.3 billion. The status of Occidental's involvement with the sites and related significant assumptions, including those sites indemnified by Maxus, has not changed materially since December 31, 2021.

MAXUS ENVIRONMENTAL SITES
When Occidental acquired Diamond Shamrock Chemicals Company in 1986, Maxus, a subsidiary of YPF, agreed to indemnify Occidental for a number of environmental sites, including the Diamond Alkali Superfund Site along a portion of the Passaic River. On June 17, 2016, Maxus and several affiliated companies filed for Chapter 11 bankruptcy in Federal District Court in the State of Delaware. Prior to filing for bankruptcy, Maxus defended and indemnified Occidental in connection with clean-up and other costs associated with the sites subject to the indemnity, including the Diamond Alkali Superfund Site.
In March 2016, the EPA issued a ROD specifying remedial actions required for the lower 8.3 miles of the Lower Passaic River (OU-2). The ROD does not address any potential remedial action for the upper nine miles of the Lower Passaic River or Newark Bay. During the third quarter of 2016, and following Maxus’s bankruptcy filing, OxyChem and the EPA entered into an AOC to complete the design of the proposed clean-up plan outlined in the ROD at an estimated cost of $