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Curious, if people want to put it out there, what do you own in OXY as a percent of your assets

Me, 0%

I only own it indirectly via my Berkshire holdings.

2.7pct

c. 0.02% . looking for divvy and potential permian upside longer term

1.6% Occidental; I had more, until Buffett stated clearly that he would not buy the whole thing, which had seemed at least moderately plausible to me until then.

Part of my 6% fossil fuel position; also Canadian Natural Resources, Petrobrasil, Suncor, Yancoal, Knot Offshore, Perpetual Energy (ironic name). We’ll unfortunately be using more before we can affordably replace them.

dtb

OXY+CVX+XLE=1% of our inv. assets.

Zero. A wise man named Warren point out that oil stocks are largely a proxy for oil prices. If you actually know where the oil prices are going you ought to buy futures. Years in the oil industry showed me that even the largest companies are very poor at making that prediction.

A bit under 1%.

Zero.

Oil and gas can burn.
My fingers : )

Jim

Having tracked oil stocks for decades I had a position in OXY and sold it a little before Berkshire got involved. It seemed like a no brainer from a valuation standpoint but as with any company their performance largely comes down to the people at the top. I have very little intention of owning any kind of oil related stock in the future given their cyclicality and think Berkshire's more detailed exposure to the management team gives them a greater degree of insight as to if it is a reasonable investment.

Almost 4%. I wasn't expecting Berkshire to buy the whole thing, although it would give me a nice bump. Instead I think they have good leadership and some likely sources of future value - does the market recognize the above-ground land value? Munger mentioned how much oil is captured beneath Los Angeles but as it turns out the land value it too high to buy it up and drill for oil.

2.6%. Entertainment and keeps me following the company and BRK's ownership.

I am delighted to announce that I have hired the esteemed Warren Buffett--at essentially no cost--to manage my exposure to OXY.

As I have other interests, I have requested that I not be updated more frequently than once a quarter.

And really, annually is fine.

23%

I know...crazy. I worked in the oil business for all of my career. I'm sticking with the girl that first took me to the dance.

With CO2 EOR, OXY could double booked oil reserves almost overnight. If OXY can get others to pay them to dispose of their waste CO2 and then charge a premium for the produced "net zero" oil, the economics could be compelling. With current "conventional" CO2 EOR operators are paying over $2/mscf for naturally occurring CO2. The cost of sourcing, processing and transporting natural CO2 represents approximately 40% of operating cost.

There are multiple potential new productive reservoirs in the Permian Basin that could become economically productive. The deeper Barnett shale, long expected to produce mostly gas, has turned out to produce significant oil in the Midland Basin (sub-basin of the Permian). OXY have drilled a number of Barnett horizontals in the Midland that are rumored to be quite good. The enormous potential of The Barnett shale at least partly played a role in XOM's recent purchase of Midland Basin weighted PXD and OXY's arguably pricy recent purchase of Crown Rock.

I'm skeptical on OXY's moving into the Direct Air Capture of CO2, but at least they're laying off some of the cost on Black Rock and US. tax payers.

What is th oil price going to do in the long term? Who knows? Roll the dice...

Tangentially related...we're going to need spandex-lycra-polyurethanes (hydrocarbons) for a long, long time:

A typical pair of running shoes, which costs €85, contains about o.7kg of polyurethanes, created via the value chain shown below. (47:20 min)

https://veriten.com/stream/cobt-212/

A wise man named Warren point out that oil stocks are largely a proxy for oil prices. If you actually know where the oil prices are going you ought to buy futures.


That’s true , he has said that. But here’s another quote:

We have not distinguished ourselves, at all, in the oil-and-gas field, although we've made a little money. We will not be buying, very often, oil-and-gas stocks. But we probably haven't bought the last one.

And since then (that was in 2015), there have indeed been big investments in Chevron and Occidental, and, not so long ago, Suncor.

And avoiding oil companies might have made more sense in the past than it does now. Oil companies have cut way back on exploration, so the combination of declining production and sustained demand seems to augur well for oil prices. Maybe futures would be a good bet, but oilco stocks like CVX and OXY have the nice feature that they are very profitable already (9% and 7% earnings yields, respectively), mostly paid out in dividends.

dtb

Oil isn't used much to generate electricity, so its consumption isn't directly impacted by the growth of renewables on the electric grid. Nevertheless, the strong trends in renewables are important to Berkshire, currently in utilities and perhaps the Pilot Travel Centers. Here's a quick view of 2023's progress in renewables:

"batteries are coming online faster than any other sort of power plant" [CA only?]

"[Texas is the] leader in utility-scale solar"

"Clean energy to make up 84% of new U.S. power capacity in 2023"

"Global renewables deployments to hit record levels in 2023"

"by 2030, technology improvements could slash the price of wind energy by a quarter and of solar by half"

"[In the US] more than 100 new clean energy manufacturing facilities or factory expansions were announced, adding up to nearly $80 billion in new investment from private companies"

"Americans bought more heat pumps than gas furnaces last year"

10 charts that sum up 2023’s clean energy progress
https://www.canarymedia.com/articles/clean-energy/...

Here's a quick view of 2023's progress in renewables:
...


Although I share your hope that renewables will replace fossil fuels ASAP, let me play the devil's advocate, because although I think renewable power is the future, it is a fairly distant future, IMO:


"batteries are coming online faster than any other sort of power plant" [CA only?]


This is surely not true worldwide, although it may be true in California. China ALONE is said to be opening 2 coal-fired power plants every week, typically about 1000-2000 MW each, let's say 1500 MW for the sake of simplicity, so 3000 MW of coal-fired production every week. By way of comparison, as of October 2023, California could store 6600 MW of power for 4 hours, and they hope to get that up to 52,000 MW (a very confusing battery-storage terminology by which they mean 52k MW for 4 hours, the industry standard length of storage) by 2045. If this sounds ambitious, it means that (perhaps optimistically) they thinks that in 22 years, they will be able to store the power output of the plants built in China in the next 4 months. China itself is up to 59 GW, or 59,000 MW, so the will be able to store the output of about 40 1500 MW plants. The expect to grow that by 19% a year, meaning they might build out 11,000 MW of storage, i.e. enough to store the production from about one month's worth of production. In other words, fossil fuel will remain by far the growth leader in China, for at least the next few years. India, which is probably the other major growth centre, is very likely to rely even more heavily on fossil fuels.


"[Texas is the] leader in utility-scale solar"

This doesn't really say anything about fossil vs renewable.


"Clean energy to make up 84% of new U.S. power capacity in 2023"

Yes, the US has a slowly growing power system and most of the new capacity will be renewables (if that's what they mean by 'clean'), but that also means there will still be growth from fossil fuels, as nuclear energy use is (unfortunately) declining in the USA like elsewhere; in the USA, no plants were built between 1978 and 2013 (!!); 93 plants are operating, 1 is under construction, and most are towards the end of their lifespans.

"Global renewables deployments to hit record levels in 2023"

Yes, deployments are increasing, so each year establishes a new record, but the point is, the numbers are still small. Renewable energy accounts for about 30% of world production, but most of this is from hydro, and there aren't many new opportunities for this. Wind and solar and other non-hydro renewables are still only about 10% of world production.


"by 2030, technology improvements could slash the price of wind energy by a quarter and of solar by half"

They could. They have certainly slashed the price of fossil fuel production, too. But what we really need is much cheaper batteries, and unfortunately, the progress there is much slower. As long as we insist on reliably available power, renewables only make sense when they are paired with batteries, so the cost of renewables alone is not really the issue (they are already cheaper than fossil fuels). The issue is what is the cost of renewables PLUS batteries, and that has generally been decreasing, but decreasing painfully slowly.


"[In the US] more than 100 new clean energy manufacturing facilities or factory expansions were announced, adding up to nearly $80 billion in new investment from private companies"

It's hard to say what proportion that might be of total spending, but that doesn't sound like a big number.


"Americans bought more heat pumps than gas furnaces last year"

Heat pumps are great, they reduce heating energy use by about 2/3 and by even more for cooling. But for heating, electricity is inherently only half as efficient as combustion in the home, so the gains are not that great, at least not for heating, as long as the electricity is coming mostly from gas anyways.


Getting this back to Berkshire, I think coal and gas and oil are still investable going forward, as increasing populations and prosperity generate increased demand in the face of stagnant supply. I think the fear of what fossil fuels might do to us is perfectly justifiable, but unfortunately, we are going to be using them for a long time, whatever the consequences end up being. I think there may be a lot of pessimism about fossil fuels' immediate and medium-term future priced in already, so I think Buffett's big oil bet, and bets on other fossil fuels (I like Yancoal) could do quite well.

Regards, DTB

no plants were built between 1978 and 2013 (!!)

I do not think this is accurate. I worked on several in the early 1980s. As an example, River Bend nuclear power plant was commissioned in 1988.

Craig

I don’t know where I got that information, but it looks like you are right. The newest reactor to enter service is Vogtle Unit 3 at the Alvin W. Vogtle Electric Generating Plant in Georgia that began commercial operation on July 31, 2023. The next-youngest operating reactor is Watts Bar Unit 2, in Tennessee, which began commercial electricity generation in October 2016.

The U.S. Nuclear Regulatory Commission (NRC) licenses new commercial nuclear reactors to originally operate for 40 years. Before expiration of the original license, licencees can apply for a 20-year operating license extension. The NRC may subsequently grant a third 20-year operating license extension for a total operational life of 80 years.

It seems my reference was wrong, no new construction from 1979 to 2013, but a couple of new plants since then. My point is, 2 new stations in the last 7 years is not nearly enough to keep up. Since 2013, there have been many more closures, 8 by my count, and many are getting towards the end of their lives.

dtb

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