(Adds context, background, share price)
By Devika Krishna Kumar
May 12 (Reuters) - Occidental Petroleum Corp is
offering its employees voluntary buyouts over the next two
weeks, according to a document seen by Reuters on Tuesday,
citing the sharp decline in oil prices and the coronavirus
pandemic for "severe dislocations" in its business.
Occidental bet heavily on the continued growth in U.S. shale
oil, taking on heavy debts for its controversial purchase of
Anadarko Petroleum last year for $38 billion. That bet has
proved ill-timed following the coronavirus outbreak, which has
cut fuel demand worldwide by about 30% and is responsible for
the worst oil-and-gas-industry downturn in 40 years.
Energy companies worldwide, including Exxon Mobil Corp
and Royal Dutch Shell PLC, have slashed capital
expenditures and oil output to reckon with the pandemic.
Houston-based Occidental last week posted a $2 billion
quarterly loss and has slashed capital spending drastically to
shore up its balance sheet. The company said that if spending
cuts are not met, it will have "serious potential consequences"
to the company, the document said.
Interested employees can submit a resignation offer to
Occidental through May 26, specifying the number of months of
base salary that they will accept for voluntary separation,
according to the document. Employees can amend or withdraw
offers unless the company has already accepted them by then, the
document said. Offers not accepted will expire automatically on
June 12.
Occidental declined to comment.
The company's shares are down 64% on the year, making it one
of the worst-performing stocks in the Standard & Poor's 500
stock index.
Occidental has been cutting expenses to deal with its
debt-laden balance sheet and had been laying off workers and
selling assets to pare down debt even before the fall in oil
prices.
The company said last week it is considering raising new
cash, swapping debt for stock or refinancing existing debt due
to shrinking oil demand. It withdrew its outlook for 2020.
It cut its 2020 capex budget on three separate occasions
this year, most recently to $2.5 billion from an original plan
of $5.3 billion.
(Reporting by Devika Krishna Kumar in New York and additional
reporting by Shariq Khan in Bangalore; Writing by David Gaffen;
Editing by Sandra Maler and Leslie Adler)
