Monitoring Occidental Petroleum Shares in 2025: My Rationale

Monitoring Occidental Petroleum Shares in 2025: Justification Explored

Warren Buffett, the legendary investor, has amassed a significant stake in Occidental Petroleum through Berkshire Hathaway, a conglomerate he leads. This investment, made in 2019, was a personal choice by Buffett, who was impressed with Occidental's management.

Berkshire Hathaway currently holds over one-quarter of Occidental's outstanding shares. The company's investment team, generally aligned with Buffett's vision and values, has been responsible for this investment. However, it's worth noting that Buffett himself, not Berkshire Hathaway directly, owns the stake in Occidental Petroleum.

As Berkshire Hathaway continues to monitor Occidental's regulatory filings, there is a focus on tracking any selling from Occidental's biggest shareholder over the next few months and throughout 2026. This monitoring is crucial as Buffett has expressed his intention to hold onto Occidental shares indefinitely.

However, the future of Occidental's position in Berkshire Hathaway's portfolio becomes uncertain after Buffett's retirement, scheduled for the end of 2025. Greg Abel, Buffett's designated successor, will take over as CEO at that time. Abel, who is experienced in managing Berkshire's operations, will play a significant role in shaping the portfolio post-Buffett.

Buffett will not be completely stepping away from Berkshire Hathaway, as he plans to stay on as chairman of the board after stepping down as CEO. This move suggests that he will continue to have some influence over the company's decisions, including those regarding Occidental Petroleum.

It's interesting to note that Buffett's lieutenants have shown a tendency to disagree with Buffett on occasion, allocating capital into companies and sectors that he historically avoided. This could potentially impact the future of Occidental Petroleum in Berkshire Hathaway's portfolio.

Moreover, Berkshire Hathaway also holds warrants to buy additional shares of Occidental Petroleum. The exercise of these warrants could further solidify Berkshire's position in Occidental Petroleum's future.

In conclusion, while the future of Occidental Petroleum in Berkshire Hathaway's portfolio is uncertain, the company's significant investment in the oil and gas giant, made under Buffett's leadership, is a testament to his confidence in the company's management and potential. As we approach Buffett's retirement, the focus will be on how his successors will navigate Berkshire Hathaway's relationship with Occidental Petroleum.