Occidental enters Abu Dhabi venture

Occidental Petroleum Corp. has agreed to jointly fund energy production and refining projects with Abu Dhabi’s International Petroleum Investment Co., the Westwood-based company said Monday.

Ray Irani, chief executive of the nation’s fourth-largest oil and gas company, said the deal was part of a move to broaden Occidental’s operations in the Mideast and North Africa.

The joint venture is the latest of several between Occidental and the government of Abu Dhabi. Occidental has partnered with the emirate in an exploration project in Libya an oil field development deal in Oman and the $5.7-billion Dolphin Energy project, which transports natural gas from offshore Qatar to the United Arab Emirates and Oman.

The deal is significant because it was forged at a time when many oil-rich nations have pushed out foreign producers or reduced their shares of profits from joint ventures, said Fadel Gheit, an analyst with Oppenheimer & Co.

“Rising nationalism makes access to energy resources harder than ever, and Oxy has managed with amazing success to elbow its way into big deals, beating much larger rivals,” Gheit said.

Irani said the joint venture would invest in the exploration and development of oil and natural gas, petrochemicals and refining. He wouldn’t disclose any financial details.

International Petroleum Investment focuses on projects outside Abu Dhabi. Its $12-billion portfolio includes holdings in South Korea, Austria, Spain, Pakistan, Oman and Japan.

“As they have opportunities brought to their attention around the world, they would ask us if we want to participate,” Irani said, and Occidental would decide based on expected returns to shareholders and other factors.

The relationship “gives us significantly more opportunities to look at as far as investments in the energy field,” he said. “It expands our horizons.”

Khadem Al Qubaisi, managing director of the Abu Dhabi firm, said Occidental’s “best-in-class operating skills, combined with its long-standing commitment to Abu Dhabi will add tremendous value” to his company’s investment strategy.

Irani said the two already were discussing potential ventures but he wouldn’t identify them.

“When we do one of these projects, you’ll be hearing about it,” he said.

Occidental is a specialist in coaxing more oil from fields that other companies have given up on. Its investments in the United States are in California, Texas, New Mexico, Kansas and Colorado. Its overseas projects are in Colombia, Argentina, Bolivia, Qatar, the United Arab Emirates, Oman, Yemen and Libya.

Occidental was one of the first U.S. companies allowed to return to the Libyan oil fields after the U.S. eased its economic embargo against that country.

The agreement announced Monday highlights Occidental’s determination to find and fund new energy projects in addition to spending on existing projects and on shareholder benefits such as higher dividends and stock buyback programs.

In 2007, Occidental spent $3.5 billion on capital projects and paid $1.3 billion to repurchase company shares.

Occidental shares fell 82 cents to $73.47 on Monday.

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elizabeth.douglass@latimes.com