The New Face Of Big Oil: How Vicki Hollub Made Oxy The Top Player In The Permian
https://www.forbes.com/sites/christopherhelman/2017/07/18/touring-the-permian-with-occidental-petroleum-ceo-vicki-hollub/#5ac88d2f2ed0JUL 18, 2017
As the first woman to run a big American oil company, Vicki Hollub has quickly made Occidental Petroleum leaner, smarter, gentler--and poised to gusher cash for the next half-century.
South Curtis Ranch is an 11,000-acre "unit" that Occidental Petroleum operates in the Permian Basin, a 300-mile swath of West Texas and southeastern New Mexico that produces a quarter of America's oil. Here, cattle placidly masticate as hundreds of 20-foot-tall "nodding donkeys" suck up oil and gas from deposits 2 miles down. Oxy's pumps are gray with red tops--a well-gauger might describe his day as having been spent "chasing redheads." North winds whip up dust from truck tires crunching on the work roads. A storm-chasing group issues a flaming-tumbleweed warning. That's no joke to Vicki Hollub, the chief executive officer of Occidental. Just 5-foot-5, Hollub strides with authority to a lineup of nervous roughnecks, all men. She shakes hands and listens intently as the foreman recites the safety briefing. Everyone wears steel-toe shoes and flame-retardant coveralls. Hollub refuses a photographer's request to take off her hard hat and safety glasses for a few pictures. "Not going to happen," she says, tucking blond hair under the rim.
Hollub, 57, feels at home here. A decade ago, she was running Oxy's entire million-acre Permian position. The work consisted mostly of injecting carbon dioxide into 100-year-old shallow, conventional fields to coax out the more stubborn oil. Then came advances in directional drilling and hydraulic fracturing that enabled oil companies to unlock deeper, trickier oil-soaked rock. Output from the Permian has doubled in the past five years to 2.5 million barrels a day (bpd), with hundreds of new rigs deployed even in a world of $45 oil.
Oxy is the biggest producer in the region, at 270,000 bpd--half the company's worldwide total. Hollub says it will double that within a decade. "It's pretty hard to drill a dry hole there. We don't have to explore to find it. It's just a matter of engineering the right way to get it out." The geology is so stacked with oil layers that it's like having ten fields in one--a petroleum layer cake. "We know Oxy has more than 50 years of reserves left," she says.
Hollub presides over an all-new Oxy that has gone all-in on the Permian. In an unforgiving "portfolio optimization" that sought to undo the excesses of former CEO Ray Irani, Oxy shed 25% of its assets, including less cost-effective fields in North Dakota, Colorado, Kansas, Oklahoma, Iraq, Libya and Yemen. In 2014, Hollub orchestrated the spinoff of California Resources Corp., which took all of Oxy's assets in that state, including Elk Hills, which produces half of the Golden State's natural gas. Oxy loaded CRC with $6 billion of debt, sold off its lavish Los Angeles headquarters for $93 million and consolidated offices in Houston. (Hollub lives with her husband on Tiki Island, near Galveston, Texas.) Half of Oxy's output now comes from Qatar, Oman, Abu Dhabi and Colombia. The other half is Permian. "Now every dollar we invest is in a quality asset," Hollub says....
