Warren Buffett accumulates larger stake in oil company Occidental

New York/Bengaluru — Warren Buffett’s Berkshire Hathaway said it has bought another 9.9-million shares of Occidental Petroleum, giving it a 17.4% stake in the oil company.

Berkshire paid about $582m for the shares, which it bought between Wednesday and Friday, according to a Friday night filing with the US Securities and Exchange Commission.

Buffett’s company is Occidental’s largest shareholder, now owning 163.4-million shares worth about $9.9bn.

Its stake is about 60% larger than that of Vanguard, the next largest shareholder, according to Refinitiv data.

Berkshire also owns warrants to buy another 83.9-million Occidental shares for $5bn.

Occidental’s share price has more than doubled this year, benefiting from Berkshire’s purchases as well as rising oil prices after Russia’s invasion of Ukraine.

The Berkshire investment has prompted market speculation that Buffett’s conglomerate might eventually buy all of Occidental.

In a June 23 research report, Truist Securities analyst Neal Dingmann saw a “good chance” of a Berkshire takeover once Occidental became an investment-grade credit, saying a purchase would help diversify Berkshire’s energy portfolio.

Occidental has been reducing debt, which swelled when it bought Anadarko Petroleum for $35.7bn in 2019. Berkshire bought $10bn of Occidental preferred stock to help finance that purchase, and obtained the warrants at that time.

It also had a $25.9bn stake in oil company Chevron at end-March.

Berkshire’s share price has fallen 8% this year, compared with a 20% decline in the S&P 500 index.

Buffett’s company owns dozens of businesses, including the BNSF railroad, Geico car insurer and its namesake energy business, as well as stocks including Apple and Bank of America.

Reuters