The Occidental Petroleum Corp headquarters is pictured in Los Angeles, California September 16, 2013. REUTERS/Mario Anzuoni (Reuters) - Occidental Petroleum Corp (OXY.N) is exploring a sale of its pipeline assets, hoping to fetch more than $5 billion and free up capital to invest in exploration and production as oil prices rebound, people familiar with the matter said on Tuesday. Occidental’s decision to shed the assets is the latest example of an oil company balking at the capital expenditure required to maintain U.S. pipelines, which have been plagued by bottlenecks and require construction of new networks. Hess Corp (HES.N) and Oasis Petroleum Inc OAS.N are among the companies that have sold or spun off pipelines in the past year, looking to take advantage of high valuations for these assets, which have been buoyed by the capacity constrains. Inability to transport enough oil out of the Permian Basin of West Texas and New Mexico, the largest U.S. oilfield, combined with increasing appetite for U.S. oil exports, could help Occidental sell its pipelines for top dollar, according to the sources. Occidental is working with investment bankers on an auction for the pipeline assets, added the sources, who asked not to be identified because the matter is confidential. Occidental representatives did not immediately respond to requests for comment. Occidental’s midstream assets include a major U.S. crude pipeline, a stake in a gas pipeline in the Middle East, a crude export terminal in Texas, and the Centurion Pipeline, a 2,900 mile line carrying crude from the Permian Basin of West Texas and New Mexico to Cushing, Oklahoma. A year ago, Occidental tried to find a buyer for its 50 percent stake in its Ingleside Energy Center, a crude oil storage and export terminal in Corpus Christi, Texas. That sale process was not completed, and Occidental is including the facility in its package of midstream assets, one of the sources said. Reporting by David French in London and Jessica Resnick-Ault in New York; Additional reporting by Ernest Scheyder in Houston; Editing by Richard Chang
US oil and gas firm Occidental Petroleum is reportedly seeking a $5bn sale of its pipeline assets, to provide extra funds for investment in exploration and production. The company is working on an auction of assets including a major US crude pipeline, a stake in a Middle Eastern gas pipeline, and the 2,900 mile Centurion Pipeline, that carries crude to Oklahoma from West Texas in the Permian Basin and New Mexico. Also included is a 50% stake in the Ingleside Energy Centre facility in Texas, which was put up for sale last year but failed to find a buyer.