Company: OXY-WT
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000797468-25-000029
Chunk: 148

Company: OCCIDENTAL PETROLEUM CORP /DE/
Filing Date: 2025-02-18
Form: 10-K
Item: Item 1A
Chunk 148
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 contribution to the asserted damage, which could increase its costs or otherwise adversely affect its businesses. For example, certain states have enacted or proposed legislation purporting to impose liability for climate mitigation and adaptation on the oil and gas industry, or to require businesses to disclose their GHG emissions associated goals and targets, use of voluntary offsets, and climate-related risks. In addition, government and private parties have increasingly filed lawsuits or initiated regulatory action alleging misrepresentation regarding climate change, sustainability and other ESG-related matters and practices or a failure or lack of diligence to meet sustainability or climate-related goals. Such legislation and lawsuits present a high degree of uncertainty regarding the extent to which energy companies face an increased risk of liability stemming from climate change or sustainability disclosures and practices.

Occidental uses water and sand and is required to dispose of produced water. Occidental’s inability to source water and sand, or dispose of produced water, could adversely affect its operations.

Water and sand are required for the exploration and production of oil and gas. Occidental’s ability to obtain water and sand for its operations may be affected by the price of water and sand, the availability of transportation and other market conditions. Additionally, some government authorities have restricted the use of water subject to their jurisdiction for hydraulic fracturing. If Occidental is unable to obtain water or sand to use in its operations, Occidental may be unable to economically produce oil and natural gas, which could have a material adverse effect on its financial condition, results of operations and cash flows. 

In addition, Occidental must dispose of the surplus fluids produced from oil and gas operations, including produced water, directly or through the use of third-party vendors. The legal requirements related to the injection of produced water into a non-producing geologic formation are subject to change. 

Texas and New Mexico have experienced an increase in seismic activity in recent years, with events measuring magnitude 4 or greater in each state. In 2021, both states issued guidelines for operators to implement response plans for activities within agency-designated seismic response areas (SRAs), focused on produced water disposal wells. These states have curtailed water disposal and suspended disposal permits in SRAs, particularly in deep disposal wells, and adopted additional regulations governing produced water disposal and recycling. Occidental subsidiaries and their contractors have to date been able to dispose of surplus produced water at agency-approved volumes, pressures or injection rates, and also utilize central water treatment and recycling facilities that reduce the need for produced water disposal. Actions by agencies and companies to shift produced water disposal to shallower disposal