Warren Buffett’s Berkshire Hathaway has increased its stake in Occidental Petroleum, a major American oil and gas exploration and production company. The conglomerate purchased additional shares, bringing its stake in Occidental to 24.4%. Over the course of May 16 to 18, Berkshire Hathaway acquired 3.46 million Occidental shares for approximately $201 million. This follows a previous acquisition of 5.62 million Occidental shares for approximately $327 million over the past six trading days. As of now, Berkshire Hathaway holds approximately 217.3 million Occidental shares valued at approximately $12.7 billion.
In addition to the shares, Berkshire Hathaway also owns $9.5 billion of Occidental preferred stock, which carries an annual dividend yield of 8%. The conglomerate also holds warrants that allow it to acquire $5 billion worth of Occidental common shares. This strategic move reflects Berkshire Hathaway’s continued interest in the oil and gas industry.
Despite these substantial investments, Warren Buffett has refuted rumors that Berkshire Hathaway has any intention to acquire Occidental outright. Buffett expressed admiration for Occidental’s presence in the Permian Basin, one of the most significant oil-producing regions in the United States, as well as praise for its CEO, Vicki Hollub.
This is not the first time Berkshire Hathaway has shown interest in the energy sector. In 2019, the conglomerate assisted in financing Occidental’s acquisition of Anadarko Petroleum, securing preferred stock and warrants as part of the deal. This move demonstrates Berkshire Hathaway’s strategy of capitalizing on promising opportunities within the energy market.
Berkshire Hathaway, headquartered in Omaha, Nebraska, is a diversified conglomerate with a vast portfolio of businesses. Its holdings include Geico auto insurance, various retail and manufacturing companies, and significant investments in Apple Inc. stock. This recent increase in its stake in Occidental Petroleum further reinforces Berkshire Hathaway’s diverse investment approach and its continued pursuit of strategic opportunities across various industries.
As of Thursday, Occidental Petroleum’s shares closed at $58.25, representing a slight decrease of 67 cents. The market will be closely watching Berkshire Hathaway’s ongoing involvement in Occidental Petroleum to gain further insights into its investment strategy and the conglomerate’s overall outlook on the energy sector.