Occidental CEO Vicki Hollub at Semafor World Economy

Thank you. Great to be here.

No, not really.

Well, fortunately for us, when I took over in 2016, we decided that we were going to lower our geopolitical risk and transform our company. So at that time we started exiting countries in the Middle East and in other international locations and at that time 50% of our production was international and now we've been able to transform to the point where 83% of our production is in the domestic US. Now we did stay in what we considered to be the safest places to be in the Middle East where we had experience and that's Oman and Abu Dhabi. So Oman has not been impacted because it's outside the Strait thankfully and in Abu Dhabi most of our production there is natural gas and it goes by pipeline. So our impact has not been really bad at all for our company. What we really focus on though are our employees and making sure that their lives are not being too dramatically impacted by this. It's very stressful for them and so our focus has been mostly on trying to make sure that we're providing them the support that they need.

Well, oil is a global commodity and that's why we feel the impact here too. But mostly in the United States, most of our oil refined here in the United States is our produced oil. We do import about three to four million barrels a day for our refineries that need heavier oil. But what the situation is, is normally between international prices, if you use Brent, normally Brent is a higher price than our domestic production which is WTI. Normally that's the measure we use. So normally we do have less expensive oil here in the United States. And if you go back and look at 2010, in 2010 in the United States, we were producing about 5 million barrels a day. That was coming from our conventional reservoirs. And what happened was the Shale Revolution. And the Shale Revolution was where we finally developed some technology that enabled us to actually develop the source rock for those conventional reservoirs. So conventional reservoirs have oil because the oil migrated out of shale and shale was created when organic matter decayed under pressure and temperature converted to hydrocarbons. And so we have now been able to develop the source rock. Now we're 13.7 million barrels a day and only about 4 million of that is conventional. So the Shale Revolution provided a lot more insulation for the United States. Otherwise, we would be paying higher prices for gasoline at the pump than we are right now.

Well, you're not going to believe it when I say this, but we don't like these spikes either.

But what we prefer are more stable and predictable prices and then we can plan our business around that. These spikes always lead to drops and so we live our lives spiking or dropping all the time and so we have to figure out what do we think kind of the median is going to be of the price and then we put our business plans together according to what we think is going to happen there. And then with respect to the longevity of this situation, you know, I heard one of the central bankers from Europe talking about this situation today and talking about how, you know, she didn't believe that it was going to be a short-term fix, that it was going to continue to last. And the way I feel about this is Europe should have come in and helped. Europe needs oil. Europe is very dependent on oil but they have no rational and reasonable strategy around not only getting gas into Europe but getting oil either. I think the war would end a lot sooner had we had NATO and the Europeans helping with the situation because we absolutely cannot live with an Iran regime that is developing nuclear weapons that can reach as far as London with their long range missiles. We can't have that. So instead of worrying about the near-term economy, they should worry about first of all making sure that people impacted by it are being aided in some way. We don't want people impacted by the war, and we don't want people starving. We don't want people having to make decisions about medications or food or no gasoline. What we need are governments to be more thoughtful about how do we help the populations make it through this? And then how do we help end it sooner? And that's going to take everybody working together because I think essentially the UN is useless in this.

I think that's why we're seeing a lot of different things happen. I think the president is pulling every lever he can think of but it's hard when you're doing it against a regime that really doesn't care how many of their own population dies and that doesn't really need the infrastructure or feel like they don't need the infrastructure. So they're okay if we bomb their infrastructure. So when you're down to that, how do you negotiate? What do you negotiate with? There's really no way to do it.