In a resounding echo of former President Donald Trump’s call to boost U.S. oil production, legendary investor Warren Buffett, through his conglomerate Berkshire Hathaway Inc., has shown a keen interest in American oil companies, particularly Occidental Petroleum Corporation.
During Trump’s tenure, regulatory shackles were loosened on the U.S. oil industry in a bid to foster energy independence and curb reliance on foreign petroleum imports.
In his annual missive to investors, Buffett lauded the efforts of companies engaged in domestic oil projects, significantly scaling up production from under 10 million barrels per day in the 1970s.
A shift occurred in 2011 when shale economics turned the tide, marking the end of America’s energy dependency crisis, with current production surpassing 13 million barrels per day and OPEC’s hegemony dwindling.
Berkshire Hathaway holds a 27.8% stake in Houston-headquartered Occidental Petroleum, a major player in shale production within the U.S. Permian Basin, alongside conventional drilling activities in the Middle East, Canada, and Chile, fostering a substantial carbon recapture enterprise.
Aside from its ownership share, Berkshire Hathaway also holds warrants, enabling potential expansion of its ownership at a predetermined price over five years.
Buffett emphasized his admiration for Occidental’s extensive U.S. oil and gas assets and leadership in carbon capture endeavors, stressing their alignment with national interests, though the cost-effectiveness of such initiatives remains unproven.
Despite expressing admiration for Occidental’s strategies under CEO Vicki Hollub’s guidance, Buffett clarified that Berkshire Hathaway harbors no intentions of acquiring or overseeing the company, planning to sustain its investment indefinitely.
With Occidental shares currently valued at $60, Berkshire Hathaway’s 27.8% stake equates to approximately $14.7 billion, complemented by an $18.8 billion investment in energy titan Chevron Corp.
While Berkshire Hathaway’s sizable ownership has been stable, Occidental’s stock has experienced volatility, reaching a pinnacle of nearly $113 in 2011 and mainly oscillating between $60-$70 since early 2023.