Occidental Petroleum to spin off its California business

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Occidental Petroleum Corp. said Friday that it plans to spin off its California assets into a separate publicly traded company as part of the oil and gas company's plans to streamline its business.

As part of the change, Occidental will move its headquarters from Los Angeles to Houston. It will keep its exploration and production operations in Texas, the Middle East and Colombia.

The new company, with about 8,000 employees, will be California's largest natural gas producer, Occidental said. It did not announce a name for the new company or where in California it will be based.

Occidental is in the midst of a strategic review of its business to increase profits. Its shares are down about 20 percent from their all-time high of $117.89 in May 2011. It has announced plans to buy back shares, increase its dividend and is shedding other businesses. On Thursday, for example, it reached an agreement to sell an oil field that spans across Kansas, Oklahoma and Colorado for $1.4 billion.

"Creating two separate energy companies will result in more focused businesses that will be competitive industry leaders," said Occidental CEO and President Stephen Chazen in a statement Friday.

Chazen will stay on as CEO of Occidental through its 2016 shareholders meeting to oversee the spinoff, which is expected to be completed by early 2015.

Separately, the company said Friday that Elisse Walter, a former chairman of the U.S. Securities and Exchange Commission, has been elected to its board of directors.

Shares of Occidental rose $3.13, or 3.4 percent, to $95.40 in midday trading.

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