Occidental Petroleum’s CEO Says the Oil Crisis Isn’t Over
Vicki Hollub, CEO of Occidental Petroleum (OXY), predicts the U.S. oil prices will rise to “a solid $50 or above” over the next 12 months. That’s quite a move up after plunging to $27 a barrel during the recent oil crisis.
Despite the positive forecast, Hollub tells Fortune’s Susie Gharib that it’s still too soon to say the oil crisis over.
“I think the crisis will continue a little longer. I think inventories need to come down more,” she says. “There needs to be more certainty around the price today. Although we’re close to $50, there’s still uncertainty in the markets around whether it’s going to stay at $50 or whether it’s going to go lower.”
Hollub became Occidental’s CEO in 2016 during the worst oil bust in decades. Market conditions forced her to slash costs dramatically and sell off non-core operations. The 2016 revenues of Occidental were $10 billion—half of what they were in 2014. The company’s rank on the newest Fortune 500 list is 278—quite a drop from number 115 three years ago.
But Hollub is gearing up to grow Occidental. She plans to expand oil production to pre-downturn levels. She expects that over the next few years production will be up by 80,000 barrels of oil equivalent a day—an increase of approximately 14 percent over the company’s 2016 production from ongoing operations.
“I would say demand is good enough,” she says. “I think it’s sufficient for the industry to be healthy.” And, she hopes, for Oxy too.