So, Occidental Petroleum is thinking about selling its crown jewels to Warren Buffett.
Let that sink in.
The story, first dropped by the Wall Street Journal, is that OXY is in talks to offload its entire OxyChem division to Berkshire Hathaway for a cool $10 billion. And the analysts, offcourse, are tripping over themselves to call it a “big bang” move. A JPMorgan guy, Arun Jayaram, used that exact phrase. “Big bang.” It’s the kind of term you use when you want to sound decisive and smart, like you’re describing a brilliant chess move instead of a company selling the furniture to pay the rent.
Let’s be real. This isn't a "big bang." It's a fire sale. It’s what you do when you’re staring down the barrel of a gun loaded with debt and the other guy—in this case, the OPEC+ cartel—has his finger on the trigger.
Don't Call It Strategy; It's a Fire Sale
A Balance Sheet Reset, or a Cry for Help?
The corporate line is that this is all about "deleveraging." A balance-sheet reset. They say the $10 billion would slash Occidental's leverage ratio by a "full turn." Sounds impressive, right? It's a great way to say, "We're in so much debt that a $10 billion cash injection only kinda helps."
This is a bad idea. No, 'bad' doesn't cover it—this is a five-alarm dumpster fire of desperation. They’re considering this sale while chemical margins are scraping the bottom of the barrel. They'd be monetizing a core asset during a "trough in the cycle." That’s analyst-speak for selling low. You don’t sell your house when the market crashes unless the bank is about to foreclose. That’s what this feels like.
And what are they giving up? Just a little something called the Battleground expansion project, which was supposed to add nearly half a billion in free cash flow in a couple of years. Selling your most promising future assets to pay today's bills ain't a long-term growth strategy. It's a survival tactic.
And I get it. The whole industry is getting squeezed. OPEC+ is opening the taps, flooding the world with an extra 411,000 barrels a day, on top of the 2.5 million they’ve already added this year. They're trying to grab market share and keep oil prices just low enough to make life miserable for U.S. producers. Crude is languishing below $70 a barrel, and the body count is rising. Exxon just announced 2,000 job cuts. Chevron already laid off 20% of its workforce. TotalEnergies is pinching pennies to save $7.5 billion.
Everyone's in "cost-cutting mode," which is just a nice way of saying thousands of people with families and mortgages are losing their jobs so the stock price doesn't completely tank. And for what, exactly...
"Analytics Cookies" or Just Digital Handcuffs?
Can We Talk About the Cookies for a Second?
Speaking of corporate nonsense that makes my eyes glaze over, did you see that NBCUniversal cookie notice? I stumbled on it looking up some premarket data, and my God. It's a masterpiece of obfuscation. It’s like they hired a team of lawyers and told them, "Write something so long and dense that no human will ever read it, but make sure it covers our ass from every conceivable angle."
They have "Strictly Necessary Cookies," "Measurement and Analytics Cookies," "Personalization Cookies," "Social Media Cookies." It’s a whole damn buffet of surveillance. My favorite is "Information Storage and Access," which they define as cookies that "allow us and our partners to store and access information on the device, such as device identifiers."
You see the "translation" there? It means: "We're putting a tracking number on you, and we're letting our sketchy friends do it, too." It’s the same playbook as the oil companies. Use bland, corporate language—"deleveraging," "synergies," "Measurement and Analytics"—to mask a much harsher reality. The reality is they're gutting the company for parts, and the other guys are tracking your every click to sell you more junk. It's all the same game.
"Moderate Buy" or Complete Delusion?
The Wall Street Delusion
But back to Occidental. The part that really gets me, the part that makes me question my own sanity, is how Wall Street processes all this.
Occidental is backed into a corner. Its competitors are shedding employees by the thousands. The entire market is being manipulated by a foreign cartel. And yet, if you look at a company like Chevron, which is in the same boat, Wall Street analysts have a "consensus Moderate Buy rating" on the stock. Ten "Buy" ratings and five "Holds." The average price target implies a 6% upside from here.
What?
Am I missing something? Are these guys seeing a magic money tree that I don't? Or is the entire system just a self-perpetuating machine of bullshit optimism, where the only answer is always "buy" because admitting the fundamentals are shot to hell would cause the whole house of cards to collapse?
Then again, maybe I'm the crazy one here. Maybe selling your best division at the bottom of the market to your largest shareholder—who is basically getting a sweetheart deal—is a brilliant move. Maybe laying off a fifth of your global workforce is the path to prosperity.
Maybe I should just click "Accept All Cookies" and stop thinking about it.
Rearranging Deck Chairs ###
At the end of the day, this isn’t about strategy. It’s about triage. Calling this a "big bang" move is like calling a controlled demolition a "structural reimagining." OXY isn't making a bold play for the future; they're just trying to stop the bleeding long enough to survive until the next earnings call. Good luck with that.
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