Occidental to sell OxyChem unit to Berkshire for $9.7 billion

Oct 2 (Reuters) - Occidental Petroleum OXY.N said on Thursday it would sell its petrochemical division to Warren Buffett's Berkshire Hathaway BRKa.N for $9.7 billion, as the U.S. oil and gas producer looks to pare debt.

The sale of the OxyChem unit, which produces chemicals used for treating swimming pools and vinyl products used for water supply piping and medical supplies, adds to a series of divestitures planned by the Houston, Texas-based company in recent years to raise cash.

If the deal closes, it would be the biggest for Berkshire, Occidental's largest shareholder, since the $11.6 billion purchase of insurance firm Alleghany Corporation in 2022 and expand its chemical holdings beyond Lubrizol.

Occidental, one of the top producers of basic chemicals and polyvinyl chloride in the U.S., has been struggling with a massive debt load, a legacy of its $55 billion acquisition of Anadarko Petroleum in 2019, when it outbid rival Chevron to secure some of the richest shale oilfields in Texas.

The company sunk deeper into debt after it closed its $12 billion acquisition of privately held U.S. shale oil producer CrownRock last year, which strengthened its position in the Permian Basin. Its debt stood at $23.34 billion by the end of June.

The deal with Berkshire, expected to close in the fourth-quarter, also indicates that the company is refocusing on its oil and gas business, which formed 75% of its total earnings last year.

In the first two quarters of this year, the OxyChem unit generated a combined revenue of $2.42 billion.

Berkshire, which holds about 27% of Occidental's outstanding shares, began acquiring stake in the company in February 2022, around when Russia invaded Ukraine.