<PAGE>
FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NOS. 333-52053 AND 333-67385
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 25, 1998)
$600,000,000
OCCIDENTAL PETROLEUM CORPORATION
$200,000,000 6.75% SENIOR NOTES DUE 2002
$400,000,000 7.375% SENIOR NOTES DUE 2008
-----------------
The 2002 notes bear interest at the rate of 6.75% per year and the 2008
notes bear interest at the rate of 7.375% per year. Interest on the notes is
payable on May 15 and November 15 of each year, beginning May 15, 1999. The
2002 notes will mature on November 15, 2002 and the 2008 notes will mature on
November 15, 2008. We may redeem some or all of the notes at any time at the
redemption price listed in the section "Description of the Notes" under the
heading "Optional Redemption."
The notes are unsecured and rank equally with all of our other unsecured
senior indebtedness. The notes will be issued only in registered form in
denominations of $1,000.
-----------------
<TABLE>
<CAPTION>
PER PER
2002 NOTE TOTAL 2008 NOTE TOTAL
--------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Public Offering Price(1)........ 99.596% $199,192,000 99.702% $398,808,000
Underwriting Discount........... .55% $ 1,100,000 .65% $ 2,600,000
Proceeds, before expenses, to
Occidental..................... 99.046% $198,092,000 99.052% $396,208,000
</TABLE>
- --------
(1) Purchasers will also be required to pay accrued interest from November 19,
1998, if settlement occurs after that date.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement or the accompanying prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
We expect that the notes will be ready for delivery in book-entry form
only through The Depository Trust Company, on or about November 19, 1998.
-----------------
MERRILL LYNCH & CO.
DONALDSON, LUFKIN & JENRETTE
J.P. MORGAN & CO.
NATIONSBANC MONTGOMERY SECURITIES LLC
ABN AMRO INCORPORATE DEUTSCHE BANK SECURITIES
SALOMON SMITH BARNEY SCOTIA CAPITAL MARKETS
-----------------
The date of this prospectus supplement is November 16, 1998.
<PAGE>
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Forward-Looking Statements................................................. S-2
Occidental Petroleum Corporation........................................... S-3
Use of Proceeds............................................................ S-3
Capitalization............................................................. S-3
Description of the Notes................................................... S-4
Underwriting............................................................... S-8
Legal Matters.............................................................. S-9
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Occidental Petroleum Corporation........................................... 3
Use of Proceeds............................................................ 3
Ratios of Earnings to Fixed Charges........................................ 3
Description of the Debt Securities......................................... 3
Plan of Distribution....................................................... 12
Legal Matters.............................................................. 13
</TABLE>
----------------
FORWARD-LOOKING STATEMENTS
This prospectus supplement includes or incorporates by reference forward-
looking statements, including those identified by the words "believes,"
"anticipates," "expects" and similar expressions. We have based these forward-
looking statements on our current expectations and projections about future
events. These forward-looking statements are subject to risks, uncertainties,
and assumptions about Occidental, including, among other things:
. global commodity pricing fluctuations;
. competitive pricing pressures;
. higher than expected costs including feedstocks;
. the supply and demand considerations for our products;
. any general economic recession domestically or internationally;
and
. not successfully completing any expansion, capital expenditure,
acquisition or divestiture.
We undertake no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or
otherwise. In light of these risks, uncertainties and assumptions, the forward-
looking events discussed in this prospectus supplement or in the incorporated
documents might not occur.
----------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We
have not, and the underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale it not permitted. You should assume that
the information contained or incorporated by reference in this prospectus
supplement and the accompanying prospectus is accurate as of the date on the
front cover of this prospectus supplement only. Our business, financial
condition, results of operations and prospects may have changed since that
date.
S-2
<PAGE>
OCCIDENTAL PETROLEUM CORPORATION
We explore for, develop, produce and market crude oil and natural gas,
and manufacture and market a variety of chlorovinyls (including basic chemicals
and polymers and plastics), specialty chemicals and petrochemicals. We conduct
our principal operations through two subsidiaries, Occidental Oil and Gas
Corporation and Occidental Chemical Corporation, and our 29.5% interest in the
Equistar Chemicals, LP petrochemicals partnership.
Occidental was organized in April 1986 and, as the result of a
reorganization effective May 21, 1986, became the successor to a California
corporation of the same name organized in 1920. The words "Occidental,"
"Company," "we," "our" and "us" as used in this prospectus supplement refer
only to Occidental Petroleum Corporation and not to any of our subsidiaries or
any of the underwriters.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the notes (estimated
to be approximately $594 million) for general corporate purposes, primarily the
retirement of outstanding indebtedness.
CAPITALIZATION
The following table sets forth the consolidated short-term debt and
consolidated capitalization of Occidental at September 30, 1998 (1) on a
historical basis and (2) as adjusted to reflect the sale of the notes and the
application of the estimated net proceeds from the sale of the notes to repay
commercial paper (which we classify as long-term debt on our balance sheet).
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998(1)
(IN MILLIONS)
(UNAUDITED)
----------------------
HISTORICAL AS ADJUSTED
---------- -----------
<S> <C> <C>
Short-term debt:
Current maturities of long-term debt and capital lease
liabilities.......................................... $1,400 $1,400
Notes payable to banks and other financial institu-
tions................................................ 30 30
------ ------
Total short-term debt............................... $1,430 $1,430
====== ======
Long-term debt, net of current maturities and unamor-
tized discount......................................... $5,830 $5,236
Notes offered hereby.................................... -- 600
------ ------
Capital lease liabilities, net of current portion....... 29 29
------ ------
Minority equity in subsidiaries and partnerships........ 4 4
------ ------
Stockholders' equity:
Nonredeemable preferred stock, $1.00 par value........ 269 269
Common stock, $.20 par value; authorized, 500 million
shares............................................... 69 69
Other stockholders' equity............................ 3,148 3,148
------ ------
Total stockholders' equity.......................... 3,486 3,486
------ ------
Total capitalization................................ $9,349 $9,355
====== ======
</TABLE>
- --------
(1) Does not give effect to the anticipated use by Occidental of the proceeds
from a note in the original principal amount of $1.4 billion, maturing on
January 4, 1999, received in connection with Occidental's sale of MidCon
Corp. to K N Energy, Inc. in exchange for a note previously issued to
Occidental by the MidCon Corp. ESOP Trust.
S-3
<PAGE>
DESCRIPTION OF THE NOTES
The Company will issue the notes under an Indenture (the "Indenture")
between Occidental and The Bank of New York, as trustee. The following
description is a summary of the material provisions of the Indenture. It does
not restate the Indenture in its entirety. We urge you to read the Indenture
because it, and not this description, defines your rights as holders of the
notes. We have filed a copy of the Indenture as an exhibit to the registration
statement which includes the accompanying prospectus.
This description of the notes supplements, and, to the extent it is
inconsistent, replaces, the description of the general provisions of the notes
and the Indenture in the accompanying prospectus. The notes are "Debt
Securities" as that term is used in the accompanying prospectus and are also
referred to in the prospectus as "Offered Securities." In this description, the
term "Securities" refers to all Debt Securities that may be issued under the
Indenture and includes the notes.
BRIEF DESCRIPTION OF THE NOTES
The notes are unsecured and rank equally with all of our other senior
unsecured indebtedness. The Indenture does not limit the aggregate principal
amount of Securities that we may issue under the Indenture and we may, without
your consent, issue additional Securities thereunder. There are currently $1.17
billion aggregate principal amount of Securities outstanding under the
Indenture.
Substantially all of our operations are conducted through subsidiaries.
As a result, our right to receive assets upon the liquidation or
recapitalization of any of our subsidiaries (and your consequent right to
participate in those assets) is subject to the claims of such subsidiary's
creditors. Even if we are recognized as a creditor of one or more of our
subsidiaries, our claims would still be subject to any security interests in
the assets of any such subsidiary and to any indebtedness or other liabilities
of any such subsidiary senior to our claims. Accordingly, both series of notes
are effectively subordinated to all indebtedness and other liabilities,
including trade payables, of our subsidiaries. As of September 30, 1998, the
total amount of such indebtedness and other liabilities of our subsidiaries
that would have been senior to both series of notes was approximately $2.3
billion (excluding interest).
PRINCIPAL, MATURITY AND INTEREST
The 2002 notes and the 2008 notes will be limited to $200 million and
$400 million, respectively, aggregate principal amount and will mature on
November 15, 2002 and November 15, 2008, respectively.
Interest on the 2002 notes will accrue at the rate of 6.75% per year and
interest on the 2008 notes will accrue at the rate of 7.375% per year, and, in
each case, will be payable semiannually in arrears on May 15 and November 15,
commencing on May 15, 1999. The Company will make each interest payment to the
holders of record of the applicable series of notes on the immediately
preceding May 1 and November 1.
Interest on both series of notes will accrue from November 19, 1998 and
will be computed on the basis of a 360-day year comprised of twelve 30-day
months.
If any interest payment date, maturity date or redemption date falls on a
day that is not a business day, the payment will be made on the next business
day and no interest will accrue for the period from and after such interest
payment date, maturity date or redemption date.
PLACE OF PAYMENT, TRANSFER AND EXCHANGE
All payments on both series of notes will be made, and transfers of both
series of notes will be registrable, at the Trustee's office in New York,
unless we designate another place for such purpose.
S-4
<PAGE>
OPTIONAL REDEMPTION
We may redeem some or all of either series of notes at any time at a
price equal to the greater of:
. 100% of the principal amount of the notes of such series to be
redeemed; and
. an amount determined by the Quotation Agent equal to the sum of
the present values of the remaining scheduled payments of
principal and interest on the notes of such series to be redeemed
(not including any portion of such payments of interest accrued as
of the redemption date) discounted to the redemption date on a
semiannual basis (assuming a 360-day year comprised of twelve 30-
day months) at the Adjusted Treasury Rate plus 25 basis points in
the case of the 2002 notes and 35 basis points in the case of the
2008 notes;
plus, in each case, accrued and unpaid interest to the redemption date;
provided, however, that, with respect to interest payments that are due on or
prior to the relevant redemption date, we will make such payments to the record
holders of such notes at the close of business on the relevant regular record
dates.
We will send to each holder notice of any redemption at least 30 days but
not more than 60 days before the applicable redemption date. Unless Occidental
defaults in payment of the redemption price, no interest shall accrue for the
period from and after such redemption date. If less than all of the notes of
any series are to be redeemed, the Trustee will select the notes of such series
(or portions thereof) to be redeemed by such method as the Trustee shall deem
fair and appropriate.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining term of the notes of the applicable series to be redeemed that would
be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such series of notes.
"Comparable Treasury Price" means, with respect to any redemption date,
(1) the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (2) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of such Quotations, such average in any
case to be determined by the Quotation Agent, or (3) if only one Reference
Treasury Dealer Quotation is received, such Quotation.
"Quotation Agent" means the Reference Treasury Dealer appointed by
Occidental.
"Reference Treasury Dealer" means (1) Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation, J.P.
Morgan Securities Inc. and NationsBanc Montgomery Securities LLC (or their
respective affiliates which are primary U.S. Government securities dealers) and
their respective successors; provided, however, that if any of them shall cease
to be a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), Occidental shall substitute for it another Primary Treasury
Dealer, and (2) any other Primary Treasury Dealer(s) selected by Occidental.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined
by the Quotation Agent, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted
in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day in the City of New York preceding such redemption date.
FORM, DENOMINATION AND REGISTRATION
Both series of notes will be issued only in fully registered form,
without coupons, in minimum denominations of $1,000 and any integral multiple
of $1,000 in excess thereof. Both series of notes will be deposited with, or on
behalf of, DTC and will be represented by one or more Global Notes registered
in the name of Cede & Co., as nominee of DTC. The interests of beneficial
owners in the Global Notes will be represented through financial institutions
acting on their behalf as direct or indirect participants in DTC.
S-5
<PAGE>
Ownership of beneficial interests in a Global Note will be limited to
persons who have accounts with DTC ("participants") or persons who hold
interests through participants. Ownership of beneficial interests in the Global
Notes will be shown on, and the transfer of these ownership interests will be
effected only through, records maintained by DTC or its nominee (with respect
to interests of participants) and the records of participants (with respect to
interests of persons other than participants).
So long as DTC, or its nominee, is the registered owner or holder of a
Global Note, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the notes represented by such Global Note for all
purposes under the Indenture and the notes. In addition, no beneficial owner of
an interest in a Global Note will be able to transfer that interest except in
accordance with DTC's applicable procedures (in addition to those under the
Indenture).
Payments on Global Notes will be made to DTC or its nominee, as the
registered owner thereof. Neither the Company, the Trustee nor any paying agent
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in
the Global Notes or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Company expects that DTC or its nominee will credit direct
participants' accounts on the payable date with payments in respect of a Global
Note in amounts proportionate to their respective beneficial interest in the
principal amount of such Global Note as shown on the records of DTC or its
nominee, unless DTC has reason to believe that it will not receive payment on
the payable date. The Company also expects that payments by participants to
owners of beneficial interests in such Global Note held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers
registered in "street name." Such payments will be the responsibility of such
participants.
Transfers between participants in DTC will be effected in accordance with
DTC rules. The laws of some states require that certain persons take physical
delivery of securities in definitive form. Consequently, the ability to
transfer beneficial interests in a Global Note to such persons may be limited.
Because DTC can only act on behalf of participants, who in turn act on behalf
of indirect participants and certain banks, the ability of a person having a
beneficial interest in a Global Note to pledge such interest to persons or
entities that do not participate in the DTC system, or otherwise take actions
in respect of such interest, may be affected by the lack of a physical
certificate of such interest.
The Company believes that it is the policy of DTC that it will take any
action permitted to be taken by a holder of notes only at the direction of one
or more participants to whose account interests in the Global Notes are
credited and only in respect of such portion of the aggregate principal amount
of the notes as to which such participant or participants has or have given
such direction.
If (1) the Depository notifies the Company that it is unwilling or unable
to continue as Depository or if the Depository ceases to be eligible under the
Indenture and a successor depository is not appointed by the Company within 90
days or (2) an event of default with respect to the notes of any series shall
have occurred and be continuing, the Global Notes will be exchanged for notes
in definitive form of like tenor and of an equal aggregate principal amount, in
authorized denominations. Such definitive notes shall be registered in such
name or names as the Depository shall instruct the Trustee. Such instructions
will most likely be based upon directions received by the Depository from
participants with respect to ownership of beneficial interests in Global Notes.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC holds securities that its participants
deposit with DTC and facilitates the settlement among participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct participants include securities brokers and dealers, banks, trust
S-6
<PAGE>
companies, clearing corporations and certain other organizations. DTC is owned
by a number of its direct participants, including the underwriters, and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain a custodial relationship with a
direct participant, either directly or indirectly ("indirect participants").
The rules applicable to DTC and its participants are on file with the SEC.
DTC has further advised the Company that management of DTC is aware that
some computer applications, systems, and the like for processing data that are
dependent upon calendar dates, including dates before, on, and after January 1,
2000, may encounter "Year 2000 problems." DTC has informed its participants and
other members of the financial community that it has developed and is
implementing a program so that its systems, as the same relate to the timely
payment of distributions (including principal and interest payments) to
security holders, book-entry deliveries, and settlement of trades within DTC,
continue to function appropriately. This program includes a technical
assessment and a remediation plan, each of which is complete. Additionally,
DTC's plan includes a testing phase, which is expected to be completed within
appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as the DTC's direct and indirect participants and third party vendors from
whom DTC licenses software and hardware, and third party vendors on whom DTC
relies for information or the provision of services, including
telecommunication and electrical utility service providers, among others. DTC
has informed the industry that it is contacting (and will continue to contact)
third party vendors from whom DTC acquires services to: (i) impress upon them
the importance of such services being Year 2000 complaint; and (ii) determine
the extent of their efforts for Year 2000 remediation (and, as appropriate,
testing) of their services. In addition, DTC is in the process of developing
such contingency plans as it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to the industry for informational purposes only and is not intended to
serve as a representation, warranty, or contract modification of any kind.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Notes among participants of
DTC, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Company nor the Trustee will have any responsibility for the performance by DTC
or its participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.
S-7
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting
agreement (the "Underwriting Agreement"), the Company has agreed to sell to the
underwriters named below (the "Underwriters"), and each of the Underwriters,
for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin
& Jenrette Securities Corporation, J.P. Morgan Securities Inc. and NationsBanc
Montgomery Securities LLC are acting as representatives (the
"Representatives"), have severally agreed to purchase, the principal amount of
notes set forth opposite their respective names below. In the Underwriting
Agreement, the several Underwriters named therein have agreed, subject to the
terms and conditions set forth therein, to purchase all of the notes being sold
pursuant to the Underwriting Agreement if any such notes are purchased. The
Underwriting Agreement provides that, in the event of a default by an
Underwriter named in the Underwriting Agreement, the purchase commitments of
the non-defaulting Underwriters named in the Underwriting Agreement may in
certain circumstances be increased.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
UNDERWRITERS OF 2002 NOTES OF 2008 NOTES
------------ ---------------- ----------------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................... $ 90,000,000 $180,000,000
Donaldson, Lufkin & Jenrette Securities
Corporation............................. 22,000,000 44,000,000
J.P. Morgan Securities Inc............... 22,000,000 44,000,000
NationsBanc Montgomery Securities LLC.... 22,000,000 44,000,000
ABN AMRO Incorporated.................... 11,000,000 22,000,000
Deutsche Bank Securities Inc............. 11,000,000 22,000,000
Salomon Smith Barney Inc................. 11,000,000 22,000,000
Scotia Capital Markets (USA) Inc......... 11,000,000 22,000,000
------------ ------------
Total............................... $200,000,000 $400,000,000
============ ============
</TABLE>
The Representatives have advised the Company that they propose initially
to offer the 2002 notes and the 2008 notes to the public at the respective
public offering prices set forth on the cover page of this prospectus
supplement and to certain dealers at such price less a concession not in excess
of .35% of the principal amount in the case of the 2002 notes and not in excess
of .4% of the principal amount in the case of the 2008 notes. The Underwriters
may allow, and such dealers may reallow, a discount not in excess of .25% of
the principal amount of either series of notes on sales to certain other
dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
We estimate that we will spend approximately $375,000 for fees and
expenses associated with the offering of the 2002 notes and the 2008 notes.
Both series of notes constitute a new issue of securities with no
established trading market. The Company does not intend to apply for listing of
either series of notes on a national securities exchange. We have been advised
by the Underwriters that the Underwriters intend to make a market in both
series of notes, but the Underwriters are not obligated to do so and may
discontinue market-making at any time without notice. No assurance can be given
as to whether or not a trading market for either series of notes will develop
or as to the liquidity of any trading market for either series of notes which
may develop.
In connection with the offering, the Underwriters are permitted to engage
in certain transactions that stabilize the price of the notes. Such
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of either or both series of notes. If the Underwriters
create a short position in the notes of any series in connection with the
offering, i.e., if they sell a greater aggregate principal amount of notes of
such series than is set forth on the cover of this prospectus supplement, the
Underwriters may reduce that short position by purchasing notes of such series
in the open market. In general, purchases of a security for the purpose of
stabilization or to reduce a short position could cause the price of the
security to be higher than it might be in the absence of such purchases.
S-8
<PAGE>
Neither the Company nor any of the Underwriters makes any representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the applicable series of
notes. In addition, neither the Company nor any of the Underwriters makes any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act.
In the ordinary course of their respective businesses, the Underwriters
or their affiliates have engaged, are engaging and may in the future engage in
investment banking, financial advisory and/or commercial banking transactions
with us and our affiliates.
LEGAL MATTERS
Certain matters with respect to the offering of the notes will be passed
upon for Occidental by Robert E. Sawyer, Esq., Associate General Counsel of
Occidental, and by Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles,
California. Mr. Sawyer beneficially owns, and has rights to acquire under
employee stock options, an aggregate of less than 1% of the outstanding common
stock of Occidental. Skadden, Arps, Slate, Meagher & Flom LLP has represented
each of the Underwriters from time to time on various unrelated legal matters.
Brown & Wood LLP, Los Angeles, California will act as counsel for
the Underwriters.
S-9
<PAGE>
PROSPECTUS
OCCIDENTAL PETROLEUM CORPORATION
SENIOR DEBT SECURITIES
----------------
Occidental Petroleum Corporation ("Occidental") may offer from time to time
pursuant to this Prospectus its senior unsecured debt securities consisting of
notes, debentures or other evidences of indebtedness (the "Debt Securities").
The Debt Securities will be limited to $800,000,000 aggregate public offering
price (or, if applicable, the equivalent thereof in any foreign currency or
composite currency or currency unit, based on the applicable exchange rate in
effect at the time of the sale of such Debt Securities). The Debt Securities
may be offered as a single series or as two or more separate series in
amounts, at prices and on terms to be determined in light of market conditions
at the time of sale and to be set forth in one or more Prospectus Supplements.
The terms of each series of Debt Securities, including, where applicable,
the specific designation, the aggregate principal amount, the authorized
denominations, the maturity, the rate or rates and the time or times of
payment of any interest, any terms for optional or mandatory redemption or
payment of additional amounts or any sinking fund provisions, the initial
public offering price, the proceeds to Occidental and any other specific terms
in connection with the offering and sale of such series will be set forth in
one or more Prospectus Supplements. As used herein, Debt Securities shall
include securities denominated in United States dollars or, at the option of
Occidental if so specified in an applicable Prospectus Supplement, in any
other currency or in composite currencies or currency units or in amounts
determined by reference to an index. This Prospectus may not be used to
consummate sales of Debt Securities unless accompanied by a Prospectus
Supplement.
The Debt Securities may be sold to or through one or more underwriters or
dealers, directly by Occidental, or through one or more agents designated from
time to time. See "Plan of Distribution." If any underwriter or agent of
Occidental is involved in the sale of any Debt Securities in respect of which
this Prospectus is being delivered, the name of such underwriter or agent and
any applicable commission or discount will be set forth in a Prospectus
Supplement. The net proceeds to Occidental from such sale also will be set
forth in such Prospectus Supplement.
The Debt Securities may be issued in registered form or bearer form or both.
Debt Securities issued in bearer form may be offered only to non-United States
persons and to offices located outside the United States of certain United
States financial institutions. If the Debt Securities of any series are
issuable in bearer form, certain limitations on such issuance will be set
forth in an applicable Prospectus Supplement.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is September 25, 1998.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY OCCIDENTAL
OR ANY UNDERWRITER OR AGENT. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS
SUPPLEMENT SHALL CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THEIR RESPECTIVE DATES.
AVAILABLE INFORMATION
Occidental has filed a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with the Securities and Exchange Commission (the "Commission") with
respect to the Debt Securities. This Prospectus does not contain all the
information set forth in the Registration Statement, certain items of which
are omitted in accordance with the rules and regulations of the Commission.
For further information regarding the Debt Securities offered hereby,
reference is made to the Registration Statement and exhibits thereto, which
may be inspected without charge at the offices of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of
which may be obtained from the Commission at prescribed rates.
Occidental is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information may be
inspected at, and, upon payment of the Commission's customary charges, copies
may be obtained from, the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and should also be available for inspection and copying at the
regional offices of the Commission located at 7 World Trade Center, 13th
Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such materials can also be obtained from
the Public Reference Section of the Commission at the above Washington, D.C.
address at prescribed rates. In addition, the Commission maintains a site on
the World Wide Web that contains reports, proxy statements and other
information filed electronically with the Commission. The address of such Web
site is http://www.sec.gov. Such material should also be available for
inspection at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York and the Pacific Exchange, 115 Sansome Street, Suite 1104, San
Francisco, California.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by Occidental with the
Commission, are hereby incorporated by reference in this Prospectus:
(i) Annual Report on Form 10-K for the fiscal year ended December 31,
1997;
(ii) Quarterly Reports on Form 10-Q for the fiscal quarters ended March
31, 1998 and June 30, 1998; and
(iii) Current Reports on Form 8-K, dated January 26, 1998, January 30,
1998, January 31, 1998, February 10, 1998, February 11, 1998, February 12,
1998, April 1, 1998, April 20, 1998, May 15, 1998, May 15, 1998 and July
20, 1998.
All documents filed by Occidental pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Debt Securities shall be deemed to
be incorporated by reference into this Prospectus and to be a part hereof from
the respective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any supplement hereto, or in
any other subsequently filed document that also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
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Occidental will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any documents incorporated by reference
herein, except for exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should
be directed to Occidental Petroleum Corporation, 10889 Wilshire Boulevard, Los
Angeles, California 90024, Attention: David C. Yen, Vice President and
Treasurer (telephone (310) 208-8800).
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars,"
"U.S. dollars" or "U.S.$").
OCCIDENTAL PETROLEUM CORPORATION
Occidental, a Delaware corporation, explores for, develops, produces and
markets crude oil and natural gas and manufactures and markets a variety of
chlorovinyls (including basic chemicals and polymers and plastics), specialty
chemicals and petrochemicals. Occidental conducts its principal operations
through two subsidiaries, Occidental Oil and Gas Corporation and Occidental
Chemical Corporation, and its 29.5% interest in the Equistar Chemicals, LP
petrochemicals partnership. Occidental's executive offices are located at
10889 Wilshire Boulevard, Los Angeles, California 90024; telephone (310) 208-
8800.
USE OF PROCEEDS
Unless otherwise indicated in an applicable Prospectus Supplement,
Occidental intends to use the net proceeds from the sale of the Debt
Securities for general corporate purposes, primarily the retirement of
outstanding indebtedness.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are Occidental's total enterprise ratios of earnings to fixed
charges for each of the periods indicated:
<TABLE>
<CAPTION>
JUNE YEARS ENDED DECEMBER 31,
30, --------------------------------------------------------
1998 1997 1996 1995 1994 1993
---- ---- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
2.61 1.55 2.08 1.75 (a) (a)
</TABLE>
- --------
(a) Earnings were inadequate to cover fixed charges by $298 million in 1994
and $224 million in 1993.
Earnings are based on Occidental's consolidated income from continuing
operations, before taxes on income (other than foreign oil and gas taxes) and
before fixed charges. Fixed charges consist of interest and debt expense,
including the proportionate share of interest and debt expense of 50-percent-
owned equity investments, the portion of lease rentals representative of the
interest factor and preferred dividends to minority stockholders of
subsidiaries adjusted to a pretax basis.
DESCRIPTION OF THE DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Securities") and the extent
to which such general provisions may apply to the Offered Securities will be
described in a Prospectus Supplement relating to such Offered Securities.
The Debt Securities will be issued under an Indenture, dated as of April 1,
1998 (the "Indenture"), between Occidental and The Bank of New York, as
trustee (the "Trustee"). The terms of the Debt Securities include
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those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and holders of the Debt Securities are referred to the Indenture and
the Trust Indenture Act for a statement thereof. The following summary of
certain provisions of the Debt Securities and of the Indenture does not
purport to be complete and is qualified in its entirety by reference to the
Indenture, which has been filed as an exhibit to the Registration Statement.
Capitalized terms used but not defined herein have the meanings given to them
in the Indenture. The term "Securities," as used under this caption, refers to
all securities issued or issuable from time to time under the Indenture and
includes the Debt Securities.
GENERAL
The Indenture will not limit the aggregate principal amount of Securities
that may be issued thereunder, and Securities may be issued thereunder from
time to time as a single series or in two or more separate series. Occidental
has authorized the issuance of Securities under the Indenture in addition to
the $800,000,000 aggregate public offering price of the Debt Securities
registered pursuant to the Registration Statement of which this Prospectus is
a part. As of the date of this Prospectus, $900,000,000 aggregate public
offering price of Securities are outstanding under the Indenture. The
Indenture will not limit the ability of Occidental or its subsidiaries to
incur additional unsecured indebtedness.
Reference is made to the Prospectus Supplement that accompanies this
Prospectus for a description of the specific terms of the Offered Securities
to which such Prospectus Supplement relates, including, without limitation:
(i) the title of the Offered Securities; (ii) any limit on the aggregate
principal amount of the Offered Securities; (iii) whether the Offered
Securities are to be issuable as Registered Securities, Bearer Securities or
both, whether the Offered Securities may be represented by a Security in
temporary or definitive global form, and, if so, the initial Depositary with
respect to such temporary or definitive global Security, and, if other than as
provided in Section 304 or Section 305 of the Indenture, as applicable,
whether, and the circumstances under which, beneficial owners of interests in
any such temporary or definitive global Security may exchange such interests
for Securities of such series of like tenor and of any authorized form and
denomination; (iv) the price or prices (expressed as a percentage of the
aggregate principal amount thereof) at which the Offered Securities will be
issued; (v) the date or dates on which the principal of the Offered Securities
is payable or the method of determination thereof; (vi) the rate or rates
(which may be fixed or variable) at which the Offered Securities will bear
interest, if any, or the method of calculating such rate or rates and the date
or dates from which such interest, if any, will accrue; (vii) the Interest
Payment Dates on which such interest, if any, on the Offered Securities will
be payable and the Regular Record Date for any interest payable on any Offered
Securities that are Registered Securities on any Interest Payment Date; (viii)
the person to whom any interest will be payable on any Offered Security that
is a Registered Security, if other than the person in whose name the Offered
Security is registered at the close of business on the Regular Record Date for
the payment of such interest; (ix) the manner in which, or the person to whom,
any interest on any Offered Security that is a Bearer Security will be
payable, if other than upon presentation and surrender of the coupons
appertaining thereto, and the extent to which, and the manner in which, any
interest payable on a temporary or definitive global Security on an Interest
Payment Date will be paid; (x) any mandatory or optional sinking fund or
analogous provisions and any provisions for the remarketing of the Offered
Securities; (xi) each office or agency where, subject to the terms of the
Indenture as described below under "Payment and Paying Agents," the principal
of and interest, if any, on the Offered Securities will be payable and each
office or agency where, subject to the terms of the Indenture as described
below under "Form, Exchange, Registration and Transfer," the Offered
Securities may be presented for exchange and Offered Securities that are
Registered Securities may be presented for registration of transfer; (xii) the
date, if any, after or on which, and the price or prices at which, the Offered
Securities may, pursuant to any optional or mandatory redemption provisions,
be redeemed, in whole or in part, and the other detailed terms and provisions
of any such optional or mandatory redemption provisions; (xiii) the
denominations in which any Offered Securities that are Registered Securities
will be issuable, if other than the denomination of $1,000 and any integral
multiple thereof, and the denominations in which any Offered Securities that
are Bearer Securities will be issuable, if other than denominations of $5,000
and $100,000; (xiv) the currency or currencies, including
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composite currencies or currency units, for which the Offered Securities may
be purchased or in which the Offered Securities may be denominated, and/or in
which the payment of principal of and interest, if any, on the Offered
Securities shall be payable, if other than U.S. dollars, and, if other than
U.S. dollars, whether the Offered Securities may be satisfied and discharged
other than as provided in Article Four of the Indenture; (xv) if the amounts
of payments of principal of and interest, if any, on the Offered Securities
are to be determined by reference to an index, formula or other method, or
based on a coin or currency other than that in which the Offered Securities
are stated to be payable, the manner in which such amounts shall be determined
and the calculation agent, if any, with respect thereto; (xvi) if other than
the principal amount thereof, the portion of the principal amount of the
Offered Securities that will be payable upon declaration of acceleration of
the Maturity thereof pursuant to an Event of Default; (xvii) if other than as
defined in the Indenture, the meaning of "Business Day" when used with respect
to the Offered Securities; (xviii) if the Offered Securities may be issued or
delivered (whether upon original issuance or upon exchange of a temporary
Security of such series or otherwise), or any installment of principal or
interest is payable, only upon receipt of certain certificates or other
documents or satisfaction of other conditions in addition to those specified
in the Indenture, the forms and terms of such certificates, documents or
conditions; (xix) any addition to, or modification or deletion of, any Event
of Default, covenant of Occidental or other term or provision specified in the
Indenture with respect to the Offered Securities; and (xx) any other terms of
the Offered Securities whether or not consistent with the provisions of the
Indenture. Any such Prospectus Supplement also will describe any special
provisions for the payment of additional amounts with respect to the Offered
Securities. The variable terms of the Securities are subject to change from
time to time, but no such change will affect any Security already issued or as
to which an offer to purchase has been accepted by Occidental.
Securities may be issued as Discount Securities, which may be sold at a
discount below their principal amount. Special United States Federal income
tax considerations applicable to Securities issued at an original issue
discount, including Discount Securities, may be described in any applicable
Prospectus Supplement. Special United States Federal tax considerations and
other restrictions or terms applicable to any Offered Securities that are
(i) issuable in bearer form, (ii) offered exclusively to Non-United States
Holders (as defined in the Indenture) or (iii) denominated in a currency other
than United States dollars will be set forth in a Prospectus Supplement
relating thereto.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
The Securities of a series may be issued solely as Registered Securities,
solely as Bearer Securities (with or without coupons attached) or as both
Registered Securities and Bearer Securities. Securities of a series may be
issuable in whole or part in the form of one or more global Securities, as
described below under "Global Securities."
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor. In addition, if Securities of
any series are issuable as both Registered Securities and as Bearer
Securities, at the option of the Holder, subject to the terms of the
Indenture, Bearer Securities (accompanied by all unmatured coupons, except as
provided below, and all matured coupons in default) of such series will be
exchangeable for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. Unless
otherwise indicated in an applicable Prospectus Supplement, any Bearer
Security surrendered in exchange for a Registered Security between a Regular
Record Date or a Special Record Date and the relevant date for payment of
interest will be surrendered without the coupon relating to such date for
payment of interest and such interest will not be payable in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with the
terms of the Indenture. Bearer Securities will not be issued in exchange for
Registered Securities.
Securities may be presented for exchange as provided above, and, unless
otherwise indicated in an applicable Prospectus Supplement, Registered
Securities may be presented for registration of transfer (duly endorsed or
accompanied by a duly executed written instrument of transfer), at the office
of the Security Registrar
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or at the office of any transfer agent designated by Occidental for such
purpose with respect to any series of Securities and referred to in an
applicable Prospectus Supplement, without service charge and upon payment of
any taxes and other governmental charges as described in the Indenture. Such
exchange or transfer, as the case may be, will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. Occidental
has initially appointed the Trustee as Security Registrar. If a Prospectus
Supplement refers to any transfer agent (in addition to the Security
Registrar) designated by Occidental with respect to any series of Securities,
Occidental may at any time rescind the designation of any such transfer agent
or approve a change in the location through which any such transfer agent
acts, except that, if Securities of a series are issuable only as Registered
Securities, Occidental will be required to maintain a transfer agent in each
Place of Payment for such series, and, if Securities of a series are issuable
as Bearer Securities, Occidental will be required to maintain a transfer agent
in New York City and in a Place of Payment for such series located outside the
United States. Occidental may at any time designate additional transfer agents
with respect to any series of Securities.
Occidental will not be required to (i) issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending (subject to certain exceptions) at the close of business
on (a) if Securities of the series are issuable only as Registered Securities,
the day of mailing of the relevant notice of redemption and (b) if Securities
of the series are issuable as Bearer Securities, the day of the first
publication of the relevant notice of redemption or, if Securities of the
series are also issuable as Registered Securities and there is no publication,
the mailing of the relevant notice of redemption; (ii) register the transfer
of or exchange any Registered Security, or portion thereof, called for
redemption, except the unredeemed portion of any Registered Security being
redeemed in part; or (iii) exchange any Bearer Security called for redemption,
except to exchange such Bearer Security for a Registered Security of that
series and of like tenor and principal amount that is immediately surrendered
for redemption.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and interest, if any, on Registered Securities will be made at
the office of such Paying Agent or Paying Agents as Occidental may designate
from time to time, except that, at the option of Occidental, payment of any
interest may be made (i) by check mailed to the address of the Person entitled
thereto, as such address shall appear in the Security Register, or (ii) by
wire transfer to an account maintained by the Person entitled thereto, as
specified in the Security Register. Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of interest on a
Registered Security will be made to the Person in whose name such Registered
Security is registered at the close of business on the Regular Record Date for
such interest installment.
Unless otherwise indicated in an applicable Prospectus Supplement, interest
shall be computed on the basis of a 360-day year comprised of twelve 30-day
months.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and interest, if any, on Bearer Securities will be made,
subject to any applicable laws and regulations, at the offices of such Paying
Agent or Paying Agents outside the United States as Occidental may designate
from time to time, or by check mailed to an address or by transfer to an
account maintained by the payee outside the United States. Unless otherwise
indicated in an applicable Prospectus Supplement, any payment of an
installment of interest on any Bearer Security will be made only against
surrender of the coupon relating to such interest installment.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee, acting through its Corporate Trust Office, will be designated as
Occidental's sole Paying Agent for payments with respect to Securities that
are issuable solely as Registered Securities and as Occidental's Paying Agent
in the Borough of Manhattan, The City of New York, for payments with respect
to Securities (subject to any limitations described in any applicable
Prospectus Supplement) that are issuable as Bearer Securities. Any Paying
Agent outside the United States and any other Paying Agent in the United
States initially designated by Occidental for the Offered
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Securities will be named in an applicable Prospectus Supplement. Occidental
may at any time designate one or more additional Paying Agents or rescind the
designation of any Paying Agent or approve a change in the office through
which any Paying Agent acts, except that, if Securities of a series are
issuable only as Registered Securities, Occidental will be required to
maintain a Paying Agent in each Place of Payment for such series, and, if
Securities of a series are issuable as Bearer Securities, Occidental will be
required to maintain (i) a Paying Agent in the Borough of Manhattan, The City
of New York, for payments with respect to any Registered Securities of the
series (and for payments with respect to Bearer Securities of the series in
the circumstances described in the Indenture, but not otherwise) and (ii) a
Paying Agent in a Place of Payment located outside the United States where
Securities of such series and any related coupons may be presented and
surrendered for payment; provided, however, that if the Securities of such
series are listed on The London Stock Exchange or the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and
such stock exchange shall so require, Occidental will maintain a Paying Agent
in London, Luxembourg or any other required city located outside the United
States, as the case may be, for the Securities of such series.
All moneys paid by Occidental to a Paying Agent for the payment of principal
of or interest, if any, on any Security that remain unclaimed at the end of
two years after such principal or interest shall have become due and payable
will be repaid to Occidental, and the Holder of such Security or any coupon
will thereafter look only to Occidental for payment thereof.
GLOBAL SECURITIES
The Securities of a series may be issued in whole or in part in global form.
A Security in global form will be deposited with, or on behalf of, a
Depositary, which will be identified in an applicable Prospectus Supplement. A
global Security may be issued in either registered or bearer form and in
either temporary or definitive form. A Security in global form may not be
transferred, except as a whole by the Depositary for such Security to a
nominee of such Depositary, or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary, or by such Depositary or any
such nominee to a successor of such Depositary or a nominee of such successor.
If any Securities of a series are issuable in global form, the applicable
Prospectus Supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such global Security may exchange such
interests for definitive Securities of such series and of like tenor and
principal amount in any authorized form and denomination, the manner of
payment of principal of and interest, if any, on any such global Security and
the specific terms of the depositary arrangement with respect to any such
global Security.
CERTAIN COVENANTS OF OCCIDENTAL
Limitation on Liens. Occidental will not, nor will it permit any
Consolidated Subsidiary (as defined below) to, incur, create, assume,
guarantee or otherwise become liable with respect to any Secured Debt (as
defined below), unless the Securities are secured equally and ratably with (or
prior to) such Secured Debt. This covenant will not apply to: (i) Liens (as
defined below) existing on the date of the Indenture; (ii) Liens existing on
property of, or on any shares of stock or Indebtedness of, any corporation at
the time such corporation becomes a Consolidated Subsidiary; (iii) Liens in
favor of Occidental or a Consolidated Subsidiary; (iv) Liens in favor of
governmental bodies to secure progress, advance or other payments; (v) Liens
existing on property, shares of stock or Indebtedness at the time of
acquisition thereof (including acquisition through merger or consolidation) or
Liens to secure the payment of all or any part of the purchase price thereof
or the cost of construction, installation, renovation, improvement or
development thereon or thereof or to secure any Indebtedness incurred prior
to, at the time of, or within 360 days after the later of the acquisition,
completion of such construction, installation, renovation, improvement or
development or the commencement of full operation of such property or within
360 days after the acquisition of such shares or Indebtedness for the purpose
of financing all or any part of the purchase price or cost thereof; and (vi)
any extension, renewal or refunding of any Liens referred to in the foregoing
clauses (i) through (v). Notwithstanding the foregoing, Occidental and one or
more Consolidated Subsidiaries may incur, create, assume, guarantee or
otherwise become liable with respect to Secured Debt that would otherwise be
subject to the foregoing restrictions if, after giving effect thereto, the
aggregate amount of
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all Secured Debt, together with all Discounted Rental Value (as defined below)
in respect of sale and leaseback transactions subject to the restrictions
discussed in the following paragraph (excluding sale and leaseback
transactions exempted from such restrictions pursuant to clause (i) or (ii) of
the last sentence of such paragraph), would not exceed 10% of consolidated Net
Tangible Assets (as defined below) of Occidental and its consolidated
subsidiaries.
Limitation on Sale and Leaseback Transactions. Occidental will not nor will
it permit any Consolidated Subsidiary to sell and lease back any Principal
Domestic Property (as defined below) unless: (i) the transaction is one in
which the sale has occurred within 360 days after the later of the
acquisition, completion of construction or commencement of full operations of
the Principal Domestic Property; (ii) Occidental or such Consolidated
Subsidiary could subject such Principal Domestic Property to a Lien pursuant
to the provisions described above under "Limitation on Liens" in an amount
equal to the Discounted Rental Value with respect to the sale and leaseback
transaction without equally and ratably securing the Securities; or (iii)
Occidental or such Consolidated Subsidiary, within 120 days after such sale,
applies or causes to be applied to the retirement of its Funded Debt (as
defined below) an amount (subject to credits for certain voluntary retirements
of Funded Debt) not less than the greater of (a) the net proceeds of the sale
of the Principal Domestic Property leased pursuant to such arrangement or (b)
the fair value (as determined in any manner approved by the Board of Directors
of Occidental) of the Principal Domestic Property so leased. This restriction
will not apply to any sale and leaseback transaction (i) between Occidental
and a Consolidated Subsidiary or between Consolidated Subsidiaries or (ii)
involving the taking back of a lease for a period, including renewals, of not
more than three years.
Other than the limitations in the Indenture on Liens and sale and leaseback
transactions described above, the provisions of the Indenture do not afford
Holders of the Debt Securities protection in the event of a highly leveraged
transaction, reorganization, restructuring, change in control, merger or
similar transaction involving Occidental that may adversely affect Holders of
the Debt Securities.
CERTAIN DEFINITIONS
"Consolidated Subsidiary" means any Subsidiary included in the financial
statements of Occidental and its Subsidiaries prepared on a consolidated basis
in accordance with generally accepted accounting principles.
"Discounted Rental Value" means, as to any particular lease under which any
Person is at the time liable and at any date as of which the amount thereof is
to be determined, the total net amount of rent (after deducting the amount of
rent to be received by such Person under noncancelable subleases) required to
be paid by such Person under such lease during the remaining noncancelable
term thereof (including any such period for which such lease has been extended
or may, at the option of the lessor, be extended), discounted from the
respective due dates thereof to such date at a rate per annum of 11 3/4%. The
net amount of rent required to be paid under any such lease for any such
period shall be the aggregate amount of the rent payable by the lessee with
respect to such period, after excluding amounts required to be paid on account
of maintenance and repairs, insurance, taxes, water rates and similar charges.
In the case of any lease which is terminable by the lessee upon the payment of
a penalty, such net amount shall also include the amount of such penalty, but
no rent shall be considered as required to be paid under such lease subsequent
to the first date upon which it may be so terminated. If and to the extent the
amount of any rent during any future period is not definitely determinable
under the lease in question, the amount of such rent shall be estimated in
such reasonable manner as the Board of Directors of Occidental may in good
faith determine.
"Funded Debt" means all Indebtedness maturing one year or more from the date
of the creation thereof, all Indebtedness directly or indirectly renewable or
extendible, at the option of the debtor, by its terms or by the terms of any
instrument or agreement relating thereto, to a date one year or more from the
date of the creation thereof, and all Indebtedness under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of one year or more, even though such Indebtedness may also conform to
the definition of Short-Term Borrowing.
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"Lien" means and includes any mortgage, pledge, lien, security interest,
conditional sale or other title retention agreement or other similar
encumbrance to secure Indebtedness for borrowed money but excluding any
security interest which a lessor may be deemed to have under a lease and any
lien which may be deemed to exist under a Production Payment or under any
subordination arrangement. "Production Payment" means any economic interest in
oil, gas or mineral reserves which (i) entitles the holder thereof to a
specified share of future production from such reserves, free of the costs and
expenses of such production and (ii) terminates when a specified quantity of
such share of future production from such reserves has been delivered or a
specified sum has been realized from the sale of such share of future
production from such reserves.
"Net Tangible Assets" of any specified Person means the total of all assets
properly appearing on a balance sheet of such Person prepared in accordance
with generally accepted accounting principles, after deducting from such
total, without duplication of deductions, (i) all Current Liabilities of such
Person; (ii) that portion of the book amount of all such assets which would be
treated as intangibles under generally accepted accounting principles,
including, without limitation, all such items as goodwill, trademarks, trade
names, brands, copyrights, patents, licenses and rights with respect to the
foregoing and unamortized debt discount and expense; and (iii) the amount, if
any, at which any stock of such Person appears on the asset side of such
balance sheet.
"Principal Domestic Property" means any (i) developed oil or gas producing
property or (ii) processing or manufacturing plant, in each case which as of
the date of the Indenture is or thereafter is owned or leased by Occidental or
any Consolidated Subsidiary and which is located in the continental United
States (provided, however, that any such property or plant declared by the
Board of Directors by Board Resolution not to be of material importance to the
business of Occidental and its Consolidated Subsidiaries taken as a whole will
be excluded from the foregoing definition).
"Secured Debt" means any Indebtedness of Occidental or any Consolidated
Subsidiary, secured by a Lien on any Principal Domestic Property or on any
shares of stock or on any Indebtedness of any Consolidated Subsidiary which
owns any Principal Domestic Property.
MERGER AND CONSOLIDATION
Occidental may consolidate with or merge into any other corporation, and
Occidental may convey, transfer or lease its properties and assets
substantially as an entirety to any Person, provided that: (i) the corporation
formed by such consolidation or into which Occidental is merged, or the Person
that acquires by conveyance or transfer or which leases the properties and
assets of Occidental substantially as an entirety, shall be organized and
existing under the laws of the United States, any State thereof or the
District of Columbia and shall expressly assume the payment of the principal
of and interest on the Securities and the performance of every covenant of the
Indenture and the Securities on the part of Occidental to be performed or
observed; and (ii) immediately after giving effect to such transaction, no
Event of Default (as described below), and no event which, after notice or
lapse of time, or both, would become an Event of Default, shall have happened
and be continuing.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to each
series of Securities individually: (i) default in the payment of any
installment of interest on any Security of such series when due, continued for
30 days; or (ii) default in the payment of the principal of any Security of
such series when due; or (iii) default in the performance, or breach, of any
other covenant or warranty of Occidental in the Indenture (other than a
covenant or warranty that is solely for the benefit of other series of the
Securities), continued for 60 days after written notice by the Trustee or the
Holders of at least 25% in principal amount of the Outstanding Securities of
such series; or (iv) acceleration of any indebtedness for money borrowed by
Occidental under the terms of the instrument under which such indebtedness is
or may be outstanding, if such indebtedness is not discharged or such
acceleration is not annulled or rescinded within 20 days after written notice
by the Trustee or the Holders of at least 25% in principal amount of the
Outstanding Securities of such series (provided, that no Event of Default
under this clause (iv) shall be deemed to exist as a result of an acceleration
of any such
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indebtedness if the principal of and interest on such indebtedness, when added
to the principal of and interest on all other such indebtedness which has been
accelerated as aforesaid (excluding any such indebtedness which has been
discharged or as to which the acceleration has been duly rescinded or
annulled), shall not exceed $50,000,000); or (v) certain events of bankruptcy,
insolvency or reorganization of Occidental; or (vi) any other event designated
in the relevant Prospectus Supplement as an "Event of Default" with respect to
the Securities of such series. If an Event of Default with respect to the
Securities of any series occurs and is continuing, the Trustee or Holders of
not less than 25% in principal amount of the Outstanding Securities of such
series may declare the principal amount (or, if any of the Securities of such
series are Discount Securities, such portion of the principal amount of such
Securities as may be specified by the terms thereof) of all of the Securities
of such series to be due and payable immediately. Under certain circumstances,
the Holders of a majority in principal amount of the Outstanding Securities of
such series may rescind such a declaration.
The Holders of a majority in principal amount of the Outstanding Securities
of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series,
provided that, among other things, such direction is not in conflict with any
rule of law or the Indenture. In case an Event of Default occurs (and is not
cured), the Trustee is required to exercise such of its rights and powers
under the Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs. Subject to such provisions, the Trustee is
under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders of the Securities
of any series, unless such Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might
be incurred by it in compliance with any such request or direction.
MODIFICATION AND WAIVER
Occidental and the Trustee may execute a supplemental indenture, without the
consent of the Holders of the Securities or any related coupons: (i) to add to
the covenants, agreements and obligations of Occidental for the benefit of the
Holders of all the Securities of any series or to surrender any right or power
conferred in the Indenture upon Occidental; (ii) to evidence the succession of
another person to Occidental and the assumption by it of the covenants of
Occidental in the Indenture and the Securities; (iii) to provide that Bearer
Securities may be registrable as to principal, to change or eliminate any
restrictions on the payment of principal of or interest, if any, on Bearer
Securities, to permit Bearer Securities to be issued in exchange for
Registered Securities, to permit Bearer Securities to be issued in exchange
for Bearer Securities of other authorized denominations or to permit the
issuance of Securities in uncertificated form, provided that any such action
shall not adversely affect the interests of the Holders of Securities of any
series or any related coupons in any material respect; (iv) to establish the
form or terms of Securities of any series and any related coupons as permitted
by Sections 201 and 301 of the Indenture; (v) to provide for the acceptance of
appointment under the Indenture of a successor Trustee with respect to the
Securities of one or more series and to add to or change any provisions of the
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts by more than one Trustee; (vi) to cure any
ambiguity or correct any inconsistency in the Indenture or make other changes,
provided that no such action shall adversely affect the interests of the
Holders of the Securities; (vii) to add to, change or eliminate any provisions
(which addition, change or elimination may apply to one or more series of
Securities), provided that any such addition, change or elimination neither
(a) applies to any Security of any series created prior to the execution of
such supplemental indenture that is entitled to the benefit of such provision
nor (b) modifies the rights of the Holder of any such Security with respect to
such provision; or (viii) to secure the Securities.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of the series affected by such
supplemental indenture, Occidental and the Trustee also may execute a
supplemental indenture to add provisions to, or change in any manner or
eliminate any provisions of, the Indenture with respect to such series of
Securities or modify in any manner the rights of the holders of the Securities
of such series and any related coupons under the Indenture, provided that no
such supplemental indenture will, without the consent of the Holder of each
Outstanding Security affected thereby: (i) change the
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stated maturity of the principal of, or any installment of principal or
interest on, any such Security, or reduce the amount of principal of any such
Discount Security that would be due and payable upon declaration of
acceleration of maturity thereof; (ii) reduce the principal amount of, or the
rate of interest on, or any premium payable on, any such Security; (iii)
change the place or currency of payment of principal or interest, if any, on
any such Security; (iv) impair the right to institute suit for the enforcement
of any payment on or with respect to any such Security; (v) reduce the above-
stated percentage of Holders of Securities of any series necessary to modify
or amend the Indenture; or (vi) modify the foregoing requirements or reduce
the percentage in principal amount of Outstanding Securities of any series
necessary to waive any covenant or past default. Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may
waive certain past defaults and may waive compliance by Occidental with
certain of the restrictive covenants in the Indenture (including the
restrictive covenants described above under "Certain Covenants of Occidental")
with respect to the Securities of such series.
DISCHARGE
Unless otherwise indicated in an applicable Prospectus Supplement,
Occidental may terminate at any time its obligations under the Indenture with
respect to the Securities of any series by (i)(a) delivering all Outstanding
Securities of such series to the Trustee for cancellation or (b) depositing
with the Trustee funds or non-callable United States government obligations
sufficient to pay all remaining principal and interest on the Securities of
such series and (ii) complying with certain other provisions of the Indenture.
If Occidental exercises its right to satisfy and discharge its obligations
under the Indenture with respect to any series of the Debt Securities prior to
its maturity by depositing funds or non-callable United States government
obligations in trust for holders of outstanding Debt Securities of that
series, such satisfaction and discharge ("discharge"), under present law, is
likely to be treated as a redemption of the Debt Securities of that series
prior to maturity in exchange for the property deposited in trust. In such
event, each holder would generally recognize, at the time of discharge, gain
or loss measured by the difference between (i) the sum of (a) the amount of
any cash and (b) the fair market value of any property deposited in trust
deemed received by the holder (except to the extent attributable to accrued
interest) and (ii) the holder's tax basis in the Debt Securities deemed
surrendered. Thereafter, each holder would be treated as if it held an
undivided interest in the cash (or investments made therewith) and the
property held in trust. Each holder would generally be subject to tax
liability in respect of interest income and original issue discount, if
applicable, thereon and would recognize any gain or loss upon any disposition,
including redemption, of the assets held in trust. Although tax might be owed,
the holder of a discharged Debt Security would not receive cash (except for
current payments of interest on such Debt Security) until the maturity or
earlier redemption of such Debt Security. Such tax treatment could affect the
purchase price that a holder would receive upon the sale of the Debt
Securities.
REPORTS
Occidental is required to furnish to the Trustee annually (i) a statement as
to the fulfillment by Occidental of all of its covenants under the Indenture
and (ii) within 20 days after the occurrence thereof, notice of each
acceleration which, with the giving of notice and the lapse of time, would be
an Event of Default, as described above in clause (iv) under "Events of
Default."
THE TRUSTEE
The Trustee is a New York banking corporation. The Trustee is a
participating lender under a revolving credit agreement of Occidental and
provides commercial banking services to Occidental and certain of its
subsidiaries. The Indenture contains certain limitations on the rights of the
Trustee, as a creditor of Occidental, to obtain payment of claims in certain
cases or to realize on certain property received in respect of any such claim
as security or otherwise. The Trustee will be permitted to engage in other
transactions with Occidental and its subsidiaries; provided, however, that if
the Trustee acquires any conflicting interest at such time as a default is
pending under the Indenture, it must (with certain exceptions) eliminate such
conflict or resign.
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PLAN OF DISTRIBUTION
Occidental may sell Debt Securities to one or more underwriters for public
offering and sale by them or may sell Debt Securities to investors directly or
through agents or dealers. Any such underwriter, agent or dealer involved in
the offer and sale of the Debt Securities will be named in the applicable
Prospectus Supplement. Occidental may also sell Offered Securities to an agent
as principal.
Underwriters may offer and sell the Offered Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Occidental also may, from time to time, authorize
underwriters acting as its agents to offer and sell the Offered Securities
upon the terms and conditions set forth in any Prospectus Supplement. In
connection with the sale of Offered Securities, underwriters may be deemed to
have received compensation from Occidental in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
Offered Securities for whom they may act as agent. Underwriters may sell
Offered Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions (which may be changed from time to time) from
the purchasers for whom they may act as agent.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, Occidental will sell such Offered
Securities to such dealer, as principal. The dealer may then resell such
Offered Securities to the public at varying prices to be determined by such
dealer at the time of resale.
Any underwriting compensation paid by Occidental to underwriters or agents
in connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters,
dealers and agents participating in the distribution of the Offered Securities
may be deemed to be underwriters under the Securities Act, and any discounts
and commissions received by them and any profit realized by them on resale of
the Offered Securities may be deemed to be underwriting discounts and
commissions under the Securities Act. Underwriters, dealers and agents may be
entitled under agreements with Occidental to indemnification against and
contribution toward certain civil liabilities, including liabilities under the
Securities Act, and to reimbursement by Occidental for certain expenses.
If so indicated in an applicable Prospectus Supplement, Occidental will
authorize dealers acting as its agents to solicit offers by certain
institutions to purchase Offered Securities from Occidental at the public
offering price set forth in such Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the
date or dates stated in such Prospectus Supplement. Each Contract will be for
an amount not less than, and the aggregate principal amount or offering price
of Offered Securities sold pursuant to Contracts shall not be less nor more
than, the respective amounts stated in such Prospectus Supplement.
Institutions with whom Contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and other institutions, but
will in all cases be subject to the approval of Occidental.
Offered Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase,
in accordance with a redemption or repayment pursuant to their terms, or
otherwise, by one or more firms ("remarketing firms"), acting as principals
for their own accounts or as agents for Occidental. Any remarketing firm will
be identified and the terms of its agreement, if any, with Occidental and its
compensation will be described in the Prospectus Supplement. Remarketing firms
may be deemed to be underwriters in connection with the Offered Securities
remarketed thereby. Remarketing firms may be entitled under agreements which
may be entered into with Occidental to indemnification by Occidental against
certain liabilities, including liabilities under the Securities Act.
The Debt Securities may or may not be listed on a national securities
exchange or a foreign securities exchange. No assurances can be given that
there will be a market for any of the Debt Securities.
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LEGAL MATTERS
Certain legal matters with respect to the legality of the Debt Securities
being offered hereby will be passed upon for Occidental by Robert E. Sawyer,
Esq., Associate General Counsel of Occidental, and by Skadden, Arps, Slate,
Meagher & Flom LLP, Los Angeles, California. Mr. Sawyer beneficially owns, and
has rights to acquire under employee stock options, an aggregate of less than
1% of the outstanding common stock of Occidental.
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$600,000,000
OCCIDENTAL PETROLEUM CORPORATION
$200,000,000 6.75% SENIOR NOTES DUE 2002
$400,000,000 7.375% SENIOR NOTES DUE 2008
---------------------------------
PROSPECTUS SUPPLEMENT
---------------------------------
MERRILL LYNCH & CO.
DONALDSON, LUFKIN & JENRETTE
J.P. MORGAN & CO.
NATIONSBANC MONTGOMERY SECURITIES LLC
ABN AMRO INCORPORATED
DEUTSCHE BANK SECURITIES
SALOMON SMITH BARNEY
SCOTIA CAPITAL MARKETS
NOVEMBER 16, 1998
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