Occidental Petroleum announced on Thursday that it will sell its chemical unit, OxyChem, to Warren Buffett’s Berkshire Hathaway for $9.7 billion in cash. The deal, the company’s largest divestment to date, is expected to close in the fourth quarter of 2025 and is aimed at helping Occidental reduce its debt while sharpening its focus on oil and gas operations.

The Houston-based energy company said about $6.5 billion from the proceeds will go directly toward paying down debt principal, helping it meet its target of cutting total debt to below $15 billion. Occidental has been working to improve its balance sheet since its costly 2019 acquisition of Anadarko Petroleum, which left it with one of the highest debt loads in the U.S. energy sector.

OxyChem, the unit being sold, produces basic chemicals used in pool treatment, vinyl, water systems, and medical supplies. The division generated roughly $2.42 billion in revenue in the first half of 2025, making it a significant but non-core contributor to Occidental’s earnings. By letting go of the business, Occidental aims to streamline its operations and concentrate on higher-margin oil and gas assets.

Berkshire Hathaway, which already owns about 27% of Occidental through prior investments, will expand its footprint in the chemicals industry with the purchase. Buffett’s conglomerate has been steadily increasing its stake in Occidental over the past three years, viewing the company as a key long-term energy investment. Analysts say the acquisition of OxyChem complements Berkshire’s diversified industrial portfolio.

The sale marks a turning point for Occidental, which has faced investor pressure to deleverage and return more cash to shareholders. With the OxyChem divestment, Occidental expects to strengthen its financial position while keeping its capital focused on exploration, production, and carbon capture initiatives in the United States and abroad.

Source: Reuters.