The story of the first woman to head a large oil company and made two financial heroes fight

From left to right, Buffett (92), Hollub (62) and Icahn (86)

Isabel Martinez de Peron Y Cristina Fernandez de Kirchner in Argentina, lydia gueiler in Bolivia, Dilma Rousseff in Brazil, Michelle Bachelet in Chile, Laura Chinchilla in Costa Rica, Violet Chamorro In Nicaragua, Mireya Moscoso In Panama, Xiomara Castro in Honduras, among Latin Americans.

Aquinas Heart In Philippines, Angela Merkel in Germany, kolinda record in Croatia, Jacinta Ardern in New Zealand, the now questioned sanna marinin Finland, in other latitudes.

Or, going further back in time, Indira Gandhi in India and Golda Meir In Israel. Not to mention old or current kingdoms and queens, principalities and princesses.

The point is that there are dozens of cases of women heads of state or government.

Vicki HollubInstead, it was in 2015 the first and so far only woman to assume the top position, chief executive officer (CEO), of a major oil company, a important international oil company, Occidental Petroleum, better known in the world of big oil like Oxy, whose stock was the one that rose the most in the last twelve months in the S&P 500 index, no less than 165%, well above other oil companies, such as Chevron, which rose 62% in the same period, and ExxonMobil, the largest in the US, which increased 74 percent.

Occidental’s very strong climb, some believe, is the advance of a future take-over by Warren Buffett, the “wizard of Omaha”, factotum of Berkshire Hathaway, who two weeks ago received authorization from the SEC, the US stock market regulator, to increase from the current 14% to 50 % their participation in the oil company who runs Hollub.

When asked why he wanted to do it, the legendary investor made a long disquisition on the work of the economist John KeynesHe questioned the stock market’s “casino” logic and finally gave the underlying reason why he wanted to invest billions of dollars more in Occidental: Vicki Hollub is CEO.

deep south

Riyadh, speaking at an international oil meeting, in Riyadh, Saudi Arabia REUTERS/Ahmaed Yosri
Riyadh, speaking at an international oil meeting, in Riyadh, Saudi Arabia REUTERS/Ahmaed Yosri

Born in 1960 in Birmimgham, Alabama, in the deep and backward South of the USA, when the racist and misogynist Ku-Klux-Klan was still strong there, Hollub followed the very un-feminine career of Mining Engineering, with a specialization in fuels, in the very unglamorous university of that State, far from the ivy leaguethe league of the most prestigious North American universities. In 1981, barely graduated, she began working at the Cities Service oil company, which was bought by Occidental the following year.

Hollub’s long career at Oxy included internal and external challenges, in Russia, Venezuela and Ecuador. In 2005 he took charge of the company’s expansion in the Permian Basin, the most productive basin of “unconventional” resources in the US, which allowed that country to be today the world’s leading oil producer. and a prominent player in the international LNG market, the Natural Gas that is liquefied at temperatures below 160 degrees below zero to transport in methane tankers, a business that had already been growing and exploded after the war in Ukraine, due to cuts of the sale of Russian gas to the countries of the European Union via gas pipelines.

His main decision was, in 2019, the purchase of Anadarko, a Texas oil company, in a fierce dispute with Chevron, another of the North American majors, at that time five times larger than Occidental.

Thanks to her successful efforts in California and also in the “Americas” division of Occidental, in 2016 Hollub was chosen to assume the highest executive position of the company, the first woman – as already mentioned – to head a large oil company.

Since then, its main decision was, in 2019, the purchase of Anadarko, a Texas oil company, in a fierce dispute with Chevron, another of the North American majors, at that time five times larger than Occidental.

From the hand of Warren

How was the battle decided? Very simple; After a previous management Brian MoynihanCEO of Bank of America (BoFA), Hollub boarded Occidental’s private jet Gulf Stream, flew to Omaha, and within an hour and a half convinced Buffett to put up $10 billion for the Anadarko purchase.

Operations in the Permian Basin, key in the extraction of oil and gas "not conventional".  The purchase of Anadarko was a key decision by Hollub for Occidental to become strong in that sector EFE/EPA/LARRY W. SMITH
Operations in the Permian Basin, key in the extraction of “unconventional” oil and gas. The purchase of Anadarko was a key decision by Hollub for Occidental to become strong in that sector EFE/EPA/LARRY W. SMITH

The operation earned Occidental reproach and a demand for Carlos Icananother longtime investor and shareholder rights activist, then 83 years old with $1.6 billion invested in the company. Icahn called the $55 billion acquisition of Anadarko “misguided” and “hugely overpriced.” The deal with Buffett, he said, will cost Occidental $800 million a year in preferred stock dividends, plus guarantees of more than $1 billion for potential lawsuits and a $50 million fee to Berkshire, Buffett’s firm.

That happens, Icahn argued, when things are negotiated in 90 minutes between an old financial fox and an inexperienced Vicki Hollub.

What followed seemed to prove him right. The USD 30 billion debt that Occidental took on to buy Anadarko, for which it paid a 65% “premium”, turned into a necklace of stones when the coronavirus pandemic struck and oil prices collapsed. In April 2020, they unusually reached sub-zero levels. With the collapse of economic activity and the demand for hydrocarbons, the oil companies had nowhere to store or send their production and came to pay for transport and storage companies to take their merchandise, as if it were toxic waste, with a negative economic value.

But just as Occidental was then one of the worst performers in its sector (its capitalization went from USD 50 billion before the purchase of Anadarko to less than USD 9 billion in 2020) it became the best performer after the recovery. The value of its share, which had fallen below $10 at the end of 2020, surpassed $75 on August 31, a difference between extremes of 650 percent.

All to Vicki

Now, two of Buffett’s main reasons for increasing his investment and stake in Occidental are due to Vicki Hollub, whom he praised in particular for the message she gave in reporting second-quarter earnings, stressing the importance of financial discipline, even in times of fat cows, like the oil prices of recent times. What Hollub said, declared the “wizard of Omaha” to the CNBC network, highly rated among those who operate on Wall Street, “is exactly what I would do.” Another reason for Buffett’s foray into Occidental is the more than 1.1 million hectares he has in the Permian Basin, thanks to his purchase of Anadarko, financed in part with Berkshire’s contribution.

The evolution of Occidental's share in the last 5 years.  From the floor of 2020 until last Wednesday it rose 650%
The evolution of Occidental’s share in the last 5 years. From the floor of 2020 until last Wednesday it rose 650%

Finally, another reason for Buffett’s confidence in Occidental is his strong commitment to the “energy transition” through investment in “clean technologies” and the express corporate assumption of the goal net zero (neutral balance between emission and absorption of carbon dioxide and gases that contribute to climate change) by 2050.

In fact, while the oil companies grouped in the American Petroleum Institute (API, according to its acronym in English) criticized the US president’s inflation reduction bill, Joseph Bidenbecause it “discourages investment in oil and gas” and “offers the wrong policies at the wrong time”, Hollub considered it “very positive”, probably because Occidental is one of the main proponents of the carbon credit system and its new project is to build the largest direct air capture plant in the world, to earn a USD 180 tax credit per ton captured.

“That’s my girl,” Buffett, who turned 92 last Tuesday, could say of Vicki, who at 62 could very well be his daughter.

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