1. -1--1-

2. -2--2- Occidental Petroleum Corporation Presented by the Red Baron’s Juanice Christian Randy Cobb John Lampl Ernesto Miranda Eric Yost

3. -3--3- Program l World Oil Consumption l World Oil Production l Hubbert’s Peak l Occidental Petroleum Corporation – Business Model – Competitors – Production – Financials – Threats l Red Baron’s Forecast

4. -4--4- 1 Spring 1999 Fall 2003 Source: The Economist The Changing Perception of the Oil Industry’s Dynamics PETRIE PARKMAN & Co. Summer 2004 Source: The Economist

5. Is the U.S. Running Out of Oil? Accordingly, in practical terms, the U. S. issue is already resolved. The remaining question is: World

6. -6--6- World Oil Trading to Meet Demand Source: BP

7. -7--7- World Per Capita Annual Oil Consumption ∆ Demand ?

8. -8--8- US Oil Demand Source: http://www.eia.doe.gov

9. -9--9- US Import Supply Source: http://www.eia.doe.gov

10. -10--10-

11. -11--11-

12. -12--12- Predicted production curve Results match Hubbert’s prediction World Oil Production – “Hubbert’s Peak” Source: Deffeyes, K.S. (2001), Hubbert’s Peak 5 PETRIE PARKMAN & Co. ?

13. -13--13- Source: http://www.eia.doe.gov

14. -14--14-

15. -15--15-

16. -16--16- A Popular Topic, but No Clear Public Consensus “We’re draining our reserves dry.” “Enough oil to last for 500 years.” Houston Chronicle May 30, 2004 Llewellyn King Chairman & CEO King Publishing Co. Publisher for: White House Weekly & Energy Daily Houston Chronicle May 30, 2004 H. Sterling Burnett Senior Fellow National Center for Policy Analysis

17. -17--17- Red Baron’s View is that both statements are correct, “We’re draining our reserves dry.” Houston Chronicle May 30, 2004 Llewellyn King Chairman & CEO King Publishing Co. Publisher for: White House Weekly & Energy Daily “Enough oil to last for 500 years.” Houston Chronicle May 30, 2004 H. Sterling Burnett Senior Fellow National Center for Policy Analysis Cheap Red Baron’s Edit ^, if the price is high enough. Red Baron’s Edit ^ with slight editing….

18. -18--18- March 5, 2005

19. -19--19-

20. -20--20-

21. -21--21- Financial Information (millions of dollars)Q303Q304% Change Corporate Revenue (24)c178,584231,02629.4 Net Income (24)10,51516,35655.5 Worldwide Lines of Business Net Income Petroleum (26) d13,9819,93442.5 Oil and Natural Gas Production (20)e10,82114,55234.5 Refining/Marketing (13)e3,168 5,38269.9 Downstream Natural Gas and Power (9)773 99829.2 Chemicals (9)3921,527289.8 Domestic Net Income by Function Oil and Natural Gas Production (13) 5,376 6,39919.0 Refining/Marketing (13)2,5523,83050.1 Foreign Net Income by Function Oil and Natural Gas Production (6)3,3094,98950.8 Refining/Marketing (4)8651,55279.3 OCCIDENTAL PETROLEUM CORP (NYSE: OXY)

22. -22--22-

23. -23--23- Major Oil Companies

24. -24--24- Industry Consolidation 14 Number of Independent Companies with Mkt Cap > $150 MM PETRIE PARKMAN & Co. Source: http://www.eia.doe.gov

25. -25--25-

26. -26--26-

27. -27--27-

28. -28--28-

29. -29--29-

30. -30--30- Refining/Downstream

31. -31--31- Hurricane Ivan

32. -32--32- Other Forces / Considerations US Dollar $1 = 0.757863EUR 2/27/05 $1 = 105.21 JPY 2/27/05

33. -33--33-

34. -34--34- 0% 1% 2% 3% 4% 5% 6% 7% 01/01/89 01/01/90 01/01/91 01/01/9201/01/93 01/01/94 01/01/9501/01/9601/01/9701/01/9801/01/9901/01/00 01/01/0101/01/0201/01/0301/01/04 CPICore CPI 01/01/05 Inflation

35. -35--35- Changes in the Federal Fund Rate SOURCE: The Washington Post | GRAPHIC: washingtonpost.com

36. -36--36-

37. -37--37- Source: Bloomberg U.S. Crude Oil Inventory VS Oil Price (The Last 13+ years) Economic Jaws of Inventory & Price – Leading Indicator or Symptomatic Result?

38. -38--38- Free Markets At Work: Impact of Rising Prices Conservation & Demand destruction Fuel switching Reserve & production expansion Increase in service costs Innovation & technology are rewarded ($$$) Impact of Low Prices Unrestrained use & Demand stimulation Fuel switching Reserve & production contraction Pressure on service costs Low cost operators are rewarded ($$$) & technology advances Sample Factors

39. -39--39- Accuracy of the Market’s Vision on Prices Actual Price Forward Curve Source: Bloomberg

40. -40--40- Conclusion l World Oil Consumption - Increasing l World Oil Production – Increasing to Meet Demand l Hubbert’s Peak – Will Not Last Forever l Occidental Petroleum Corporation – Business Model – Competitors – Production – Financials – Threats l Red Baron’s Forecast Anything Is Possible

41. -41--41- Thank You From the Red Barons Juanice Christian Randy Cobb John Lampl Ernesto Miranda Eric Yost You Decide