Occidental Petroleum plans to step back from troubled regional markets by the end of the year as it seeks to cut costs and focus its portfolio on three key markets in the Middle East, according to the company’s new chief executive.
Vicki Hollub, who will take over as chief executive of Occidental in April, said that the Houston-based firm would focus on three areas in the Middle East, including Abu Dhabi, Oman and Qatar, as well as Colombia and the Permian Basin in Texas.
“Getting the portfolio the way that we want means that we can work on lowering our cost structure that will help optimise what we are doing,” she said.
But to do this, a few assets need to be disposed of, which include interests in Iraq, Libya and Yemen. “We have plans to exit out of those and we expect by the end of this year, we should have most of that done,” she said.
Movement has already been made on Occidental stake in the Zubair oilfield in southern Iraq, with the country’s state-owned South Oil Company expected to take over. In Yemen, Ms Hollub said that some contracts were expiring while the company is hoping to sell another asset to firms that are “interested and have previous experience in Yemen”.
Exiting various fields in Libya’s Sirte Basin and other onshore exploration blocks is another ball game. “We haven’t really defined or disclosed what our exit strategy is right now, so that’s one of the options that will probably take longer,” Ms Hollub said.
Streamlining the company's activities is vital in the current oil market as the price of Brent crude, the global benchmark, has dipped below US$30 per barrel. While the oil market is cyclical, the incoming company head said that the problem is with higher oil prices the industry becomes more inefficient.
“We actually lose margins sometimes because it gets so crazy with costs, so now what we’re trying to do is significantly lower our cost structures so that we can weather more price swings and lower price in the future.”
Occidental has, in some areas, lowered drilling costs by as much as 45 per cent with completion costs down about 30 per cent. “We reduced our costs around $750 million [last year] and part of that was unit cost reduction from vendors, but the majority of the costs were from efficiency improvements,” she said.
This year’s budget is still in progress, but Ms Hollub said that it would be at least 30 per cent lower than last year. “The good thing about our portfolio is that we have a variety of types of projects so if we could just lower that cost, then we should be able to manoeuvre in whatever the new normal of prices is going to be.”
The firm is working on a technical evaluation for Adnoc's Hail and Ghasha fields that includes 3D seismic and drilling appraisal wells. "We hope to provide Adnoc information to decide to develop those wells and if those are developed, we'd certainly like to be a part of the companies considered," she said. "When people ask about us selling down in the Middle East, that's not going to happen to those three core areas because we need the cash flows."
lgraves@thenational.ae
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The Buckingham Murders
Starring: Kareena Kapoor Khan, Ash Tandon, Prabhleen Sandhu
Director: Hansal Mehta
Rating: 4 / 5
The UN General Assembly President in quotes:
YEMEN: “The developments we have seen are promising. We really hope that the parties are going to respect the agreed ceasefire. I think that the sense of really having the political will to have a peace process is vital. There is a little bit of hope and the role that the UN has played is very important.”
PALESTINE: “There is no easy fix. We need to find the political will and comply with the resolutions that we have agreed upon.”
OMAN: “It is a very important country in our system. They have a very important role to play in terms of the balance and peace process of that particular part of the world, in that their position is neutral. That is why it is very important to have a dialogue with the Omani authorities.”
REFORM OF THE SECURITY COUNCIL: “This is complicated and it requires time. It is dependent on the effort that members want to put into the process. It is a process that has been going on for 25 years. That process is slow but the issue is huge. I really hope we will see some progress during my tenure.”
