Analysis of Property, Plant and Equipment
Property, Plant and Equipment Disclosure
Occidental Petroleum Corp., balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
Gross property, plant and equipment exhibited an overall upward trajectory from 2020 to 2024, increasing from 118,964 million USD to 140,954 million USD. This growth was primarily driven by significant expansions in the oil and gas segment, which remains the dominant component of the asset base. While the first few years showed moderate fluctuations, a substantial acceleration in capital investment is evident between 2023 and 2024.
- Segmental Asset Distribution
- The oil and gas segment constitutes the vast majority of total assets, growing from 102,454 million USD in 2020 to 121,874 million USD by 2024. This represents a focused capital allocation toward primary production assets. The chemical segment demonstrated steady, incremental growth, rising from 7,356 million USD to 8,725 million USD over the same period. Midstream and marketing assets remained relatively stable, though they experienced a dip in 2022 before recovering to reach a peak of 9,322 million USD in 2024. Corporate assets showed minimal volatility, maintaining a range between 889 million USD and 1,039 million USD.
- Depreciation and Amortization Trends
- Accumulated depreciation, depletion, and amortization increased consistently each year, moving from -53,075 million USD in 2020 to -71,576 million USD in 2024. The steady growth of this contra-asset account reflects the ongoing consumption of the economic benefits of the company's long-term physical assets. The annual increase in accumulated charges suggests a consistent rate of asset aging and depletion across the portfolio.
- Net Book Value Analysis
- Net property, plant and equipment followed a U-shaped trend. After starting at 65,889 million USD in 2020, the net value declined for two consecutive years, reaching a low of 58,384 million USD in 2022. This period indicates that depreciation and depletion expenses exceeded new capital expenditures. However, a sharp reversal occurred in 2024, with net assets rising to 69,378 million USD. This rebound signifies a period of aggressive reinvestment that outpaced the annual depreciation charges, substantially increasing the net book value of the company's operational infrastructure.
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Asset Age Ratios (Summary)
Occidental Petroleum Corp., asset age ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Average age ratio | 50.78% | 53.85% | 51.64% | 49.28% | 44.61% |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
An analysis of the average age ratio reveals a sustained period of growth followed by a moderate correction. From late 2020 through 2023, there was a consistent upward trajectory, indicating a maturing asset base.
- Asset Aging Trend (2020–2023)
- The average age ratio increased steadily from 44.61% in 2020 to a peak of 53.85% by the end of 2023. This progression indicates that cumulative depreciation grew relative to the gross book value of the assets, suggesting that the property, plant, and equipment portfolio was aging without sufficient new capital offsets to lower the average.
- Recent Reversal (2024)
- A downward shift is observed as of December 31, 2024, with the ratio declining to 50.78%. This reduction suggests a strategic reinvestment in new assets or the acquisition of new property, plant, and equipment, which effectively reduced the average age of the asset base.
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Average Age
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Average age = 100 × Accumulated depreciation, depletion and amortization ÷ Property, plant and equipment, gross
= 100 × 71,576 ÷ 140,954 = 50.78%
The analysis of property, plant, and equipment reveals a period of asset maturation followed by a notable increase in capital investment. From 2020 to 2023, the asset base experienced a consistent increase in relative age, suggesting that depreciation levels exceeded the rate of new asset acquisition during this interval.
- Gross Asset Value and Accumulated Depreciation
- Accumulated depreciation, depletion, and amortization exhibited an uninterrupted upward trajectory, rising from 53,075 million US dollars in 2020 to 71,576 million US dollars by 2024. Gross property, plant, and equipment remained relatively stable between 2020 and 2022, followed by an accelerating growth phase that culminated in a significant increase to 140,954 million US dollars in 2024.
- Average Age Ratio Dynamics
- The average age ratio increased steadily from 44.61% in 2020 to a peak of 53.85% in 2023, indicating a maturing asset portfolio where the proportion of depreciated value grew relative to the total gross book value. A reversal of this trend occurred in 2024, with the ratio declining to 50.78%. This reduction is directly correlated with the substantial expansion of gross assets in the final year, which effectively rejuvenated the asset base and lowered the average age ratio.
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