Explaining Southern California's economy

Domestic oil boom: Occidental could buy Yates Petroleum for $3 billion

TO GO WITH AFP STORY: Commodities-oil-en

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Occidental Petroleum could be a buyer for Yates Petroleum, a family owned oil company that owns fields in New Mexico.

Los-Angeles based Occidental Petroleum is looking for more growth. It's coming off a weaker 2012 third quarter than the prior year, with profits down over 20 percent, and has a new CEO, Stephen Chazen, who wants to prevent a further slide. But rather than do as some analysts have suggested and buy back stock — a reliable way to boost a flagging share price — Chazen could be going shopping. And Yates Petroleum, a family-owned company, could be the prize.

Things are rough in the oil business right now, with refineries catching fire in California and superstorms ravaging the supply infrastructure in the Northeast. In this context, Occidental's third quarter slide is understandable. But the word on the street is that Chazen wants to move the needle on the company's stock price, which is well off its high of $115, achieved in 2011. 

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