Edgar Filing: OCCIDENTAL PETROLEUM CORP /DE/

Occidental Petroleum Corporation Definitive Proxy Statement

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

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Exchange Act of 1934 (Amendment No. )

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Occidental Petroleum Corporation

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Notice of 2007 Annual Meeting of
Stockholders and Proxy Statement

March 22, 2007

Dear Stockholders:

On behalf of the Board of Directors, it is my pleasure to invite you to Occidental’s 2007 Annual Meeting of Stockholders, which will be held on Friday, May 4, 2007, at The Starlight Ballroom, The Fairmont Miramar Hotel, Santa Monica, California.

Attached is the Notice of Meeting and the Proxy Statement, which describes in detail the matters on which you are being asked to vote. These matters include electing the directors, ratifying the selection of independent auditors, increasing the number of shares authorized for issuance under the 2005 Long-Term Incentive Plan and transacting any other business that properly comes before the meeting, including any stockholder proposals.

Also enclosed are a Report to Stockholders, in which senior management discusses highlights of the year, and Occidental’s Annual Report on Form 10-K. As in the past, at the meeting there will be a report on operations and an opportunity to ask questions.

Whether you plan to attend the meeting or not, I encourage you to vote promptly so that your shares will be represented and properly voted at the meeting.

Sincerely,

Ray R. Irani

Chairman, President and Chief Executive Officer

Friday, May 4, 2007

The Starlight Ballroom
The Fairmont Miramar Hotel
101 Wilshire Boulevard
Santa Monica, California

Meeting Hours

Registration Begins 9:30 a.m.
Meeting 10:30 a.m.

Admission Ticket or Brokerage

Statement Required

OCCIDENTAL PETROLEUM CORPORATION

10889 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90024

March 22, 2007

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Our Stockholders:

Occidental's 2007 Annual Meeting of Stockholders will be held at 10:30 a.m. on Friday, May 4, 2007, in the Starlight Ballroom, The Fairmont Miramar Hotel, 101 Wilshire Boulevard, Santa Monica, California.

At the meeting, stockholders will act on the following matters:

	1.	Election of directors;
	2.	Ratification of selection of KPMG LLP as independent auditors;
	3.	Approval of amendment to increase the number of shares authorized for issuance under the 2005 Long-Term Incentive Plan; and
	4.	Consideration of other matters properly brought before the meeting, including stockholder proposals. The Board of Directors knows of three stockholder proposals that may be presented.

These matters are described in detail in the Proxy Statement. The Board of Directors recommends a vote FOR Proposals 1, 2 and 3 and AGAINST Proposals 4, 5 and 6.

Stockholders of record at the close of business on March 15, 2007, are entitled to receive notice of, to attend and to vote at the meeting.

Whether you plan to attend or not, it is important that you read the Proxy Statement and follow the instructions on your proxy card to vote by mail, telephone or Internet. This will ensure that your shares are represented and will save Occidental additional expenses of soliciting proxies.

Sincerely,

Donald P. de Brier
Executive Vice President, General Counsel and Secretary

TABLE OF CONTENTS

General Information			1
Proposal 1: Election of Directors			2
	Information Regarding the Board of Directors and its Committees		5
	Compensation of Directors		8
	Section 16(a) Beneficial Ownership Reporting Compliance		8
Security Ownership of Certain Beneficial Owners and Management			9
Executive Compensation			10
	Compensation Discussion and Analysis		10
	Compensation Committee Report		19
	Performance Graph		19
	Executive Compensation Tables		20
		Summary Compensation Table	20
		Grants of Plan-Based Awards	21
		Outstanding Equity Awards at December 31, 2006	23
		Option Exercises and Stock Vested in 2006	26
		Nonqualified Deferred Compensation	27
	Potential Payments Upon Termination or Change of Control		29
Proposal 2: Ratification of Independent Auditors			35
	Audit and Other Fees		35
	Report of the Audit Committee		35
	Ratification of Selection of Independent Auditors		36
Proposal 3: Approval of Amendment of 2005 Long-Term Incentive Plan			36
	History		36
	Voting Information		36
	Summary Description of the 2005 Plan		36
	Federal Income Tax Consequences		38
	Specific Benefits		38
	Securities Authorized for Issuance Under Equity Compensation Plans		39
Stockholder Proposals			40
Proposal 4: Scientific Report on Global Warming			40
Proposal 5: Advisory Vote to Ratify Executive Compensation			42
Proposal 6: Performance-Based Stock Options			43
Stockholder Proposals for the 2008 Annual Meeting of Stockholders			44
Nominations for Directors for Term Expiring in 2009			45
Annual Report			46
Exhibit A: Corporate Governance Policies and Other Governance Measures			A-1
Exhibit B: Occidental Petroleum Corporation 2005 Long-Term Incentive Plan			B-1

PROXY STATEMENT

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Occidental Petroleum Corporation, a Delaware corporation, for use at the Annual Meeting of Stockholders on May 4, 2007, and at any adjournment of the meeting. All numbers of shares and prices per share of Occidental common stock have been adjusted to give effect to the two-for-one stock split in August 2006.

ADMISSION TO THE ANNUAL MEETING

Attendance is limited to stockholders and one guest per stockholder. If you plan to attend the meeting in person and you are a stockholder of record, you must bring the admission ticket attached to your proxy or information card. If your shares are held in the name of a bank, broker or other holder of record and an admission ticket is not part of your voting instruction card, you will be admitted only if you have proof of ownership on the record date, such as a bank or brokerage account statement. In addition to your admission ticket or account statement, you may be asked to present valid picture identification, such as a driver's license or passport.

VOTING RIGHTS

This Proxy Statement and accompanying proxy card are being mailed beginning on or about March 22, 2007, to each stockholder of record as of March 15, 2007, which is the record date for the determination of stockholders entitled to receive notice of, to attend, and to vote at the meeting. As of the record date, Occidental had outstanding and entitled to vote 871,523,461 shares of common stock. A majority of outstanding shares must be represented at the meeting, in person or by proxy, to constitute a quorum and to transact business. You will have one vote for each share of Occidental’s common stock you own. You may vote in person at the meeting or by proxy. Proxies may be voted by completing and mailing the proxy card, by telephone or Internet as explained on the proxy card. You may not cumulate your votes.

VOTING OF PROXIES

The Board of Directors has designated Dr. Ray R. Irani, Mr. Aziz D. Syriani and Miss Rosemary Tomich, and each of them, with the full power of substitution, to vote shares represented by all properly executed proxies. The shares will be voted in accordance with the instructions on the proxy card. If no instructions are specified on the proxy card, the shares will be voted:

•	FOR all nominees for directors (see page 2);
•	FOR ratification of the independent auditors (see page 35);
•	FOR authorizing additional shares for the 2005 Long-Term Incentive Plan (see page 36); and
•	AGAINST Proposals 4, 5 and 6 (stockholder proposals begin on page 40).

In the absence of instructions to the contrary, proxies will be voted in accordance with the judgment of the person exercising the proxy on any other matter presented at the meeting in accordance with Occidental's By-laws.

BROKER VOTES

If your shares are held in street name, under New York Stock Exchange Rules, your broker can vote your shares on Proposals 1 and 2 but not Proposal 3 or the stockholder proposals (Proposals 4, 5 and 6). If your broker does not have discretion and you do not give the broker instructions, the votes will be broker nonvotes, which will have the same effect as votes against the proposals.

VOTE REQUIRED

The vote required to elect directors and to approve each proposal is described with the proposal.

VOTING RESULTS

The Report of Inspector of Elections will be published on Occidental’s web site, www.oxy.com, within 14 calendar days following the date of the meeting, and the results of the vote will be included in Occidental’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007, and in the Report on the Annual Meeting, both of which may be accessed through www.oxy.com or obtained by writing to Publications Department, Occidental Petroleum Corporation, 10889 Wilshire Boulevard, Los Angeles, California 90024.

CONFIDENTIAL VOTING

All proxies, ballots and other voting materials are kept confidential, unless disclosure is required by applicable law or expressly requested by you, you write comments on your proxy or voting instruction card, or the proxy solicitation is contested. Occidental’s confidential voting policy is posted on www.oxy.com and may also be obtained by writing to Occidental’s Corporate Secretary, 10889 Wilshire Boulevard, Los Angeles, California 90024.

REVOKING A PROXY

You may revoke your proxy or change your vote before the meeting by filing a revocation with the Corporate Secretary of Occidental, by delivering to Occidental a valid proxy bearing a later date or by attending the meeting and voting in person.

SOLICITATION EXPENSES

Expense of this solicitation will be paid by Occidental. Morrow & Co., Inc. has been retained to solicit proxies and assist in distribution and collection of proxy material for a fee estimated at $15,000 plus reimbursement of out-of-pocket expenses. Occidental also will reimburse banks, brokers, nominees and related fiduciaries for the expense of forwarding soliciting material to beneficial owners of the common stock. In addition, Occidental's officers, directors and regular employees may solicit proxies but will receive no additional or special compensation for such work.

PROPOSAL 1: ELECTION OF DIRECTORS

Directors are elected by a plurality of votes. However, pursuant to Occidental’s By-laws, a director who receives a greater number of votes “against” his or her election than votes “for” in any election (a “Majority Against Vote”) must tender his or her resignation. The Corporate Governance, Nominating and Social Responsibility Committee (“Nominating Committee”) will consider the resignation and possible responses to it based on the relevant facts and circumstances, and make a recommendation to the Board of Directors. The Board of Directors must act on the Nominating Committee’s recommendation within 90 days following certification of the stockholder vote by the Inspector of Elections. Any director who tenders his or her resignation pursuant to such By-law provision cannot participate in the Nominating Committee’s recommendation or Board of Directors’ action regarding whether to accept the resignation. The Board of Directors will disclose promptly its decision-making process and decision whether to accept or reject the director’s resignation in a Form 8-K filed with the Securities and Exchange Commission.

Unless you specify differently on the proxy card, proxies received will be voted FOR Spencer Abraham, Ronald W. Burkle, John S. Chalsty, Edward P. Djerejian, R. Chad Dreier, John E. Feick, Dr. Ray R. Irani, Irvin W. Maloney, Rodolfo Segovia, Aziz D. Syriani, Rosemary Tomich and Walter L. Weisman to serve for a one-year term ending at the 2008 Annual Meeting, but in any event, until his or her successor is elected and qualified, unless ended earlier due to his or her death, resignation, disqualification or removal from office. The Nominating Committee and the Board have waived the retirement age requirement with respect to Mr. Maloney and requested that Mr. Maloney serve an additional term. In the event any nominee should be unavailable at the time of the meeting, the proxies may be voted for a substitute nominee selected by the Board of Directors.

The following biographical information is furnished with respect to each of the nominees for election at the 2007 Annual Meeting.

The Board of Directors recommends a vote FOR all of the nominees.

SPENCER ABRAHAM, 54

Since September 2005, Mr. Abraham has been Chairman and Chief Executive Officer of The Abraham Group, a business consulting firm based in Washington D.C., and since 2005, has been a distinguished visiting fellow at the Hoover Institution, a public policy research center headquartered at Stanford University and devoted to the study of politics, economics and political economy as well as international affairs. He served as the Secretary of Energy, United States Department of Energy from 2001 through January 2005. Prior to that, he was a United States Senator, representing the State of Michigan from 1995 to 2001. From 1993 to 1994, he was of counsel to the law firm of Miller, Canfield, Paddock & Stone. He was a co-chairman of the National Republican Congressional Committee from 1991 to 1993 and Chairman of the Michigan Republican Party from 1983 to 1991. Mr. Abraham holds a juris doctorate degree from Harvard Law School. Mr. Abraham also is Chairman of the Board of Directors of AREVA, Inc., the U.S. subsidiary of the French-owned nuclear company.

Director since 2005

	RONALD W. BURKLE, 54 Mr. Burkle is the managing partner and majority owner of The Yucaipa Companies, a private investment firm that invests primarily its own capital and that he co-founded in 1986. He is a trustee of the John F. Kennedy Center for the Performing Arts, a trustee of the J. Paul Getty Trust and a member of the Board of the Carter Center. Mr. Burkle also is a director of KB Home and Yahoo!. Director since 1999
	JOHN S. CHALSTY, 73 Mr. Chalsty is a principal and has served as Chairman of Muirfield Capital Management LLC, an asset management firm, since 2002. He served as Senior Advisor to Credit Suisse First Boston during 2001, was Chairman of Donaldson, Lufkin & Jenrette, Inc., an investment banking firm, from 1996 through 2000 and served as its President and Chief Executive Officer from 1986 to 1996. He also is a director of Metromedia International Group and Republic Properties. Mr. Chalsty is a Trustee Emeritus of Columbia University. Director since 1996
	EDWARD P. DJEREJIAN, 68 Ambassador Djerejian has been founding director of the James A. Baker III Institute for Public Policy at Rice University since 1994. Before that, he had a career in foreign service that included serving as United States Ambassador to Israel from 1993 to 1994, as Assistant Secretary of State for Near Eastern Affairs from 1991 to 1993 and as United States Ambassador to the Syrian Arab Republic from 1988 to 1991. Ambassador Djerejian also is a director of Baker Hughes, Inc. and Global Industries, Ltd. Director since 1996
	R. CHAD DREIER, 59 Since 1994, Mr. Dreier has been Chairman, President and Chief Executive Officer of The Ryland Group, Inc., one of the nation’s largest home builders and a leading mortgage finance company. Mr. Dreier was the Chief Financial Officer of Kaufman & Broad (now KB Home) from 1986 to 1993. He worked for the accounting firm of Ernst & Ernst from 1972 to 1975 and qualified as a Certified Public Accountant in California in 1974. Mr. Dreier is Chairman of the Board of Trustees of Loyola Marymount University and a director of Harvard University’s Joint Center for Housing Studies. Director since 2002
	JOHN E. FEICK, 63 Mr. Feick is the Chairman and a major stockholder of Matrix Solutions Inc., a provider of environmental remediation and reclamation services. He was President and Chief Executive Officer of Matrix from 1995 to 2003. He also is Chairman and a partner in Kemex Engineering Services, Ltd., which offers engineering and design services to the petrochemical, refining and gas processing industries. He was President and Chief Operating Officer of Novacor Chemicals, a subsidiary of Nova Corporation, from 1984 to 1994. Mr. Feick also is a director of Fort Chicago Energy Partners LP. Director since 1998

	DR. RAY R. IRANI, 72 Dr. Irani has been Chairman and Chief Executive Officer of Occidental since 1990. He has served as President since 2005 and from 1984 until July 1996. He was Chief Operating Officer from 1984 to 1990. He was Chairman of the Board of Directors of Canadian Occidental Petroleum Ltd. (now Nexen Inc.) from 1987 to 1999. Dr. Irani also is a director of KB Home. Director since 1984
	IRVIN W. MALONEY, 76 From 1992 until his retirement in 1998, Mr. Maloney was President and Chief Executive Officer of Dataproducts Corporation, which designs, manufactures and markets printers and supplies for computers. Director since 1994
	RODOLFO SEGOVIA, 70 Mr. Segovia is on the Executive Committee of Inversiones Sanford, a diversified investment group with emphasis in petrochemicals, specialty chemicals and plastics with which he has been affiliated since 1965. A former President of the Colombian national oil company (Ecopetrol) as well as Minister and Senator of the Republic of Colombia, he has been President and Chief Executive Officer of polyvinyl chloride and polypropylene companies. Mr. Segovia is a Trustee of the University of the Andes and serves as an advisor to the Martindale Center of Lehigh University, where he served as a visiting professor. Director since 1994
	AZIZ D. SYRIANI, 64 Mr. Syriani has served since 2002 as the President and Chief Executive Officer of The Olayan Group, a diversified trading, services and investment organization with activities and interests in the Middle East and elsewhere. From 1978 until 2002, he served as the President and Chief Operating Officer of The Olayan Group. Mr. Syriani also is a director of The Credit Suisse Group. He was Chairman of the Audit Committee of The Credit Suisse Group from April 2002 until April 2004, and since April 2004, has been Chairman of the Compensation Committee. Director since 1983 Lead Independent Director since 1999
	ROSEMARY TOMICH, 69 Miss Tomich has been owner of the Hope Cattle Company since 1958 and the A. S. Tomich Construction Company since 1970. Additionally, she is Chairman of the Board of Directors and Chief Executive Officer of Livestock Clearing, Inc. and was a founding director of the Palm Springs Savings Bank. Miss Tomich serves on the Advisory Board of the University of Southern California School of Business Administration and the Board of Councillors for the School of Letters and Sciences at the University of Southern California and is a Trustee Emeritus of the Salk Institute. Director since 1980

WALTER L. WEISMAN, 71

Since 1988, Mr. Weisman has been involved in private investments and volunteer activities. Prior to 1988, he was Chairman and Chief Executive Officer of American Medical International, a multinational hospital firm. Mr. Weisman is a director of Fresenius Medical Care AG and Vice Chairman and Lead Director of Maguire Properties, Inc. He is past Chairman and a life trustee of the Los Angeles County Museum of Art, Vice Chairman of the Board of the California Institute of Technology, Chairman of the Board of the Sundance Institute and a Trustee of the Samuel H. Kress Foundation.

Director since 2002

INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES

CORPORATE GOVERNANCE: - In 2005, the Board amended and restated its Corporate Governance Policies to reflect regulatory changes as well as the Board’s desire to maintain high standards for the governance of the Board and its committees. In 2006, the Board amended Occidental’s By-laws to require a director who fails to obtain a majority vote to tender his or her resignation. The Corporate Governance Policies, together with information about Occidental’s Code of Business Conduct and other governance measures adopted by the Board, are set forth in Exhibit A and are also available at www.oxy.com or by writing to Occidental’s Corporate Secretary, 10889 Wilshire Boulevard, Los Angeles, California 90024.

Pursuant to Occidental’s Conflict of Interest Policy, each director and executive officer has an obligation to avoid any activity, agreement, business investment or interest, or other situation that could be construed either as divergent to or in competition to Occidental’s interest or as an interference with such person’s primary duty to serve Occidental, unless prior written approval has been granted by the Audit Committee of the Board. Each director and executive officer is required to complete an annual questionnaire that requires disclosure of any transaction between Occidental and him or her or any of his or her affiliates or immediate family members.

DIRECTOR EDUCATION - In 2006, four corporate governance training sessions were provided to directors by the University of Southern California Marshall School of Business. All of the directors, except Mr. Abraham, attended at least one of these sessions or director education in connection with service on another public company board. Additional training is scheduled for 2007.

INDEPENDENCE - Each of Miss Tomich and Messrs. Abraham, Burkle, Chalsty, Djerejian, Dreier, Feick, Maloney, Segovia, Syriani and Weisman has been determined by the Board of Directors as meeting the independence standard set forth in Occidental’s Corporate Governance Policies (see Exhibit A) and the New York Stock Exchange Listed Company Manual. In making its determination of independence, the Board considered that, as disclosed under Compensation of Directors on page 8, Occidental matched the gifts made by certain of the directors to charitable organizations and paid one director for consulting services. Except for the Executive Committee and the Dividend Committee, all committees of the Board are composed of independent directors.

MEETINGS - The Board of Directors held six regular meetings during 2006, including three executive sessions at which no members of management were present. Mr. Syriani, the Lead Independent Director, presided over the executive sessions. Each director attended at least 75 percent of the meetings of the Board of Directors and the committees of which he or she was a member and all of the directors attended the 2006 Annual Meeting. Attendance at the annual meeting of stockholders is expected of all directors as if it were a regular meeting.

SUCCESSION PLANNING - The Board of Directors annually reviews Occidental’s policies and principles for recruiting, developing and selecting the persons to succeed the Chairman and Chief Executive Officer and the other executive officers. The review includes the background, training, qualities and other characteristics that would be desirable in candidates as well as consideration of possible successors.

COMMUNICATIONS WITH BOARD MEMBERS - Stockholders and other interested parties may communicate with any director by sending a letter or facsimile to such director’s attention in care of Occidental’s Corporate Secretary, 10889 Wilshire Boulevard, Los Angeles, California 90024; facsimile number 310-443-6977. The Corporate Secretary opens, logs and forwards all such correspondence (other than advertisements or other solicitations) to directors unless the director to whom the correspondence is addressed has requested the Corporate Secretary to forward correspondence unopened.

LEAD INDEPENDENT DIRECTOR AND COMMITTEES - The Board of Directors has a Lead Independent Director and seven standing committees: Executive; Audit; Corporate Governance, Nominating and Social Responsibility; Charitable Contributions; Dividend; Executive Compensation and Human Resources; and Environmental, Health and Safety. The Audit Committee Charter, the Executive Compensation and Human Resources Committee Charter and the Corporate Governance, Nominating and Social Responsibility Committee Charter and the enabling resolutions for each of the other committees are available at www.oxy.com or by writing to Occidental’s Corporate Secretary, 10889 Wilshire Boulevard, Los Angeles, California 90024. The general duties of the Lead Independent Director and the committees are described below. From time to time, the Board of Directors delegates additional duties to the standing committees.

Name and Members	Responsibilities		Meetings or Written Actions in 2006
Lead Independent Director Aziz D. Syriani	•	coordinates the activities of the independent directors		Not applicable
	•	advises the Chairman on the schedule and agenda for Board meetings
	•	assists in assuring compliance with Occidental’s Corporate Governance Policies
	•	assists the Executive Compensation and Human Resources Committee in evaluating the Chairman’s performance
	•	recommends to the Chairman membership of the various Board committees
Audit Committee John S. Chalsty R. Chad Dreier John E. Feick Irvin W. Maloney Aziz D. Syriani (Chair) Rosemary Tomich (Vice Chair)	All of the members of the Audit Committee are independent as defined in the New York Stock Exchange Listed Company Manual. All of the members of the Audit Committee are financially literate and the Board has determined that Mr. Dreier meets the Securities and Exchange Commission’s definition of “audit committee financial expert.” The Audit Committee Report with respect to Occidental's financial statements is on page 35. The primary duties of the Audit Committee are as follows:			8 meetings including 7 executive sessions with no members of management present
	•	hires the independent auditors to audit the consolidated financial statements, books, records and accounts of Occidental and its subsidiaries
	•	discusses the scope and results of the audit with the independent auditors
	•	discusses Occidental's financial accounting and reporting principles and the adequacy of Occidental's internal accounting, financial and operating controls with the auditors and with management
	•	reviews all reports of internal audits submitted to the Audit Committee and management's actions with respect thereto
	•	reviews the appointment of the senior internal auditing executive
	•	oversees all matters relating to Occidental’s Code of Business Conduct compliance program
Charitable Contributions Spencer Abraham Edward P. Djerejian Irvin W. Maloney Rodolfo Segovia Rosemary Tomich (Chair)	•	oversees charitable contributions made by Occidental and its subsidiaries		5 meetings
Corporate Governance, Nominating and Social Responsibility Committee John S. Chalsty Edward P. Djerejian Rodolfo Segovia Aziz D. Syriani (Vice Chair) Rosemary Tomich (Chair) Walter L. Weisman	•	recommends candidates for election to the Board		5 meetings
	•	is responsible for the periodic review and interpretation of Occidental's Governance Policies and consideration of other governance issues
	•	oversees the evaluation of the Board and management
	•	reviews Occidental’s policies, programs and practices on social responsibility, including the Corporate Matching Gift Program
	•	oversees compliance with Occidental’s Human Rights Policy
	See page 45 for information on how nominees are selected and instructions on how to recommend nominees for the Board.
Dividend Committee Ronald W. Burkle John S. Chalsty John E. Feick Dr. Ray R. Irani Aziz D. Syriani Walter L. Weisman	•	has authority to declare the quarterly cash dividend on the Common Stock		1 meeting

Name and Members	Responsibilities		Meetings or Written Actions in 2006
Environmental, Health and Safety Committee Spencer Abraham Edward P. Djerejian John E. Feick Rodolfo Segovia (Chair) Rosemary Tomich Walter L. Weisman	•	reviews and discusses with management the status of health, environment and safety issues, including compliance with applicable laws and regulations		5 meetings
	•	reviews the results of internal compliance reviews and remediation projects
	•	reports periodically to the Board on environmental, health and safety matters affecting Occidental and its subsidiaries
Executive Committee John S. Chalsty John E. Feick Dr. Ray R. Irani (Chair) Irvin W. Maloney Rodolfo Segovia Aziz D. Syriani Rosemary Tomich	•	exercises the powers of the Board with respect to the management of the business and affairs of Occidental between meetings of the Board		2 written actions 1 meeting
Executive Compensation and Human Resources Committee Spencer Abraham (Vice Chair) John S. Chalsty (Chair) R. Chad Dreier Irvin W. Maloney Rodolfo Segovia Rosemary Tomich	•	reviews and approves the corporate goals and objectives relevant to the compensation of the Chief Executive Officer (“CEO”), evaluates the CEO’s performance and determines and approves the CEO’s compensation		5 meetings including 3 executive sessions with no members of management present
	•	reviews and approves the annual salaries, bonuses and other executive benefits of all other executive officers
	•	administers Occidental's stock-based incentive compensation plans and periodically reviews the performance of the plans and their rules
	•	reviews new executive compensation programs
	•	periodically reviews the operation of existing executive compensation programs as well as policies for the administration of executive compensation
	•	reviews annually director compensation
	The Executive Compensation and Human Resources Committee's report on executive compensation is on page 19.

COMPENSATION OF DIRECTORS

For 2006, each non-employee director was paid a retainer of $60,000 per year, plus $2,000 for each meeting of the Board of Directors or of its committees he or she attended, and received an annual grant of 5,000 shares of common stock, plus an additional 800 shares of common stock for each committee he or she chaired or for serving as lead independent director. Directors are eligible to participate on the same terms as Occidental employees in the Occidental Petroleum Corporation Matching Gift Program, which matches contributions made by employees and directors up to an aggregate of $50,000 per year to institutions of higher learning and arts and cultural organizations. In addition, Occidental reimburses non-employee directors for expenses related to service on the Board, including hotel, airfare, ground transportation and meals for themselves and their significant others, and permits, subject to availability, non-employee directors to make use of company aircraft on the same reimbursement terms applicable to executive officers of Occidental. Occidental does not provide option awards, non-equity incentive awards, deferred compensation or retirement plans for non-employee directors. A table summarizing the total compensation for 2006 for each of the non-employee directors is set forth below.

Name	Fees Earned or Paid in Cash ($)			Stock Awards ($) (1)			All Other Compensation ($) (2)				Total ($)
Spencer Abraham		$	91,500		$	259,275		$	36,024	⁽³⁾	$	386,799
Ronald W. Burkle		$	75,500		$	259,275		$	0		$	334,775
John S. Chalsty		$	99,500		$	300,759		$	32,136	⁽⁴⁾	$	432,395
Edward P. Djerejian		$	95,500		$	259,275		$	2,898		$	357,673
R. Chad Dreier		$	95,500		$	259,275		$	50,000	⁽⁵⁾	$	404,775
John E. Feick		$	99,500		$	259,275		$	2,554		$	361,329
Irvin W. Maloney		$	107,500		$	259,275		$	915		$	367,690
Rodolfo Segovia		$	103,500		$	300,759		$	59,682	⁽⁶⁾	$	463,941
Aziz D. Syriani		$	97,500		$	342,243		$	25,516	⁽⁷⁾	$	465,259
Rosemary Tomich		$	127,500		$	342,243		$	0		$	469,743
Walter L. Weisman		$	91,500		$	259,275		$	50,000	⁽⁵⁾	$	400,775

(1)	Restricted Stock Awards are granted to each non-employee director on the first business day following the Annual Meeting. The shares subject to the award are fully vested on the date of grant, but may not be sold or transferred during the director’s period of service as a member of the Board. The dollar amounts shown reflect the amount recognized for financial reporting purposes pursuant to Statement of Financial Accounting Standard No. 123 (Revised 2004, Share-Based Payment (“FAS 123(R)”). See Note 12 to Consolidated Financial Statements in Occidental’s Annual Report on Form 10-K for the year ended December 31, 2006, regarding assumptions underlying valuation of equity awards. The number of Restricted Stock Awards outstanding for each director is shown in the Beneficial Ownership Table on page 9.
(2)	Amounts shown include personal benefits in excess of $10,000, all tax gross-ups regardless of amount, matching charitable contributions and consulting fees.
(3)	The amount includes $35,000 for consulting services provided to Occidental and $1,024 for tax gross-up related to reimbursement of spousal travel costs.
(4)	The amount shown includes $25,000 for a charitable contribution made by Occidental pursuant to its Matching Gift Program and $7,136 for the tax gross-up related to reimbursement of spousal travel costs.
(5)	The amount shown is the aggregate charitable contributions made by Occidental pursuant to its Matching Gift Program.
(6)	The amount shown includes $45,000 of aggregate charitable contributions pursuant to Occidental’s Matching Gift Program, $10,277 for reimbursement of spousal travel costs and $4,405 for the tax gross-up related to the reimbursement of spousal travel costs.
(7)	The amount includes $20,823 for the excess of estimated incremental cost of aircraft usage over the amount reimbursed to Occidental and $4,693 for the tax gross-up related to reimbursement of spousal travel costs.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the rules issued thereunder, Occidental's executive officers, directors and any beneficial owner of more than 10 percent of any class of Occidental's equity securities are required to file, with the Securities and Exchange Commission and the New York Stock Exchange, reports of ownership and changes in ownership of common stock. Copies of such reports are required to be furnished to Occidental. Based solely on its review of the copies of the reports furnished to Occidental or written representations that no reports were required, Occidental believes that, during 2006, all persons required to report complied with the Section 16(a) requirements.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

At the close of business on February 28, 2007, the beneficial owner of common stock shown below was the only person known to Occidental to be the beneficial owner of five percent or more of the outstanding voting securities of Occidental.

Name and Address

Number of
Shares
Owned

Percent of
Outstanding
Common
Stock

Sole
Voting
Shares

Shared
Voting
Shares

Sole
Investment
Shares

Shared
Investment
Shares

Barclays Global Investors, N.A.
45 Fremont Street
San Francisco, California 94105

60,907,277

⁽¹⁾

7.24%

⁽¹⁾

53,548,100

⁽¹⁾

–

⁽¹⁾

60,907,277

⁽¹⁾

–

⁽¹⁾

(1)	Pursuant to Schedule 13G, filed as of January 23, 2007 with the Securities and Exchange Commission.

The following table sets forth certain information regarding the beneficial ownership of common stock as of February 28, 2007, by each of the named executive officers, the directors of Occidental, and all executive officers and directors as a group. The directors are subject to stock ownership guidelines as described in Occidental’s Corporate Governance Policies (see Exhibit A). The executive officers are subject to stock ownership guidelines, which range from two to ten times base salary (see Executive Stock Ownership at www.oxy.com). All of the directors and current executive officers were in compliance with the guidelines as of February 28, 2007.

Name	Sole Voting and Investment Shares (1)			Restricted Shares (2)		Exercisable Options (3)		Total Shares Beneficially Owned (4)			Percent of Outstanding Common Stock (5)		Restricted/ Performance Stock Units (6)		Deferred Stock Units (7)
Spencer Abraham		0			6,924		0		6,924					0		0
Ronald W. Burkle		20,000			39,000		0		59,000					0		0
John S. Chalsty		10,000			28,206		0		38,206					0		0
Stephen I. Chazen		1,023,183			0		693,335		1,716,518					527,668		515,660
Donald P. de Brier		395,967			0		866,380		1,262,347					177,439		246,546
Edward P. Djerejian		3,862			40,212		0		44,074					0		0
R. Chad Dreier		14,000			21,666		0		35,666					0		0
John E. Feick		2,000			39,000		0		41,000					0		0
Richard W. Hallock		271,423			0		198,424		469,847					121,205		106,358
Ray R. Irani		4,351,554			0		1,439,759		5,791,313					1,664,658		1,698,986
Irvin W. Maloney		11,619			42,100		0		53,719					0		0
John W. Morgan		285,122	⁽⁸⁾		0		360,002		645,124	⁽⁸⁾				174,830		234,202
Rodolfo Segovia		20,520	⁽⁹⁾		43,728		0		64,248	⁽⁹⁾				0		0
Aziz D. Syriani		2,000			42,820		0		44,820					0		0
Rosemary Tomich		6,000			47,700		0		53,700					0		0
Walter L. Weisman		4,000			23,334		0		27,334					0		0

All executive officers and directors as a group (21 persons)		6,660,331	^{(8) (9)}		374,690		3,915,211		10,950,232	^{(8) (9)}		1.3%		2,976,065		2,907,306

(1)	Includes shares held through the Occidental Petroleum Corporation Savings Plan.
(2)	For non-employee directors, includes shares for which investment authority has not vested under the 1996 Restricted Stock Plan for Non-Employee Directors and the 2005 Long-Term Incentive Plan.
(3)	Includes options and stock appreciation rights which will be exercisable within 60 days.
(4)	Total is the sum of the first three columns.
(5)	Unless otherwise indicated, less than one percent.
(6)	Includes the restricted stock unit awards and awards at target level under performance stock awards and performance-based restricted share unit awards. Until the restricted or performance period ends, as applicable, and, in the case of both types of performance awards, until the awards are certified, no shares of common stock are issued. However, grant recipients receive dividend equivalents on the restricted stock units during the restricted period and on the target share amount of performance stock awards during the performance period. Dividend equivalents on performance-based restricted stock awards are paid at the end of the performance period on the number of shares certified.
(7)	Includes shares earned under restricted stock and performance stock awards that were deferred at the end of the restricted or performance period, as applicable. During the deferral period, dividend equivalents are paid in cash or accrued as additional stock units depending on the participant’s deferral election.
(8)	Includes 800 shares held by Mr. Morgan’s wife.
(9)	Includes 14,327 shares held by Mr. Segovia as trustee for the benefit of his children.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

COMPENSATION PHILOSOPHY AND OBJECTIVES

Occidental’s executive compensation program emphasizes equity compensation to encourage actions by executives that will drive long-term growth in stockholder value. The Executive Compensation and Human Resources Committee of the Board of Directors ("Compensation Committee") believes that exceptional performance characterized by stockholder returns exceeding those of peers and superior financial results merit exceptional compensation; conversely, below average returns would result in compensation well below peer averages. Exceptional performance is driven by effective capital allocation and investment decisions assessed by industry comparative measures such as return on capital employed, return on equity and income and cash flow per barrel of oil equivalent. Accordingly, the Compensation Committee has structured executive compensation to support the achievement of corporate performance objectives and to attract, reward and retain top quality executives by focusing on three fundamental elements: (1) equity compensation awards, particularly awards that are performance-based and align a very significant portion of each executive’s net worth with Occidental’s long-term growth in stockholder value, (2) cash compensation for short-term performance and the accomplishment of annual goals, and (3) other benefits competitive with the marketplace. To achieve each of these objectives, Occidental designs its incentive awards with different performance measures, including return on equity, total stockholder return and earnings per share, as more fully described below, and with different measurement periods ranging from one to four years. The Compensation Committee believes executive officers with the highest level of responsibility and compensation should have the highest percentage of their total compensation at risk and variable depending upon Occidental’s performance. Therefore, the Compensation Committee provides the most significant portion of total compensation for executive officers as incentive-based stock awards to underscore the focus on long-term growth in stockholder value. In addition, the Compensation Committee’s compensation policy and philosophy encourages executives to hold a significant amount of Occidental stock to maintain an alignment of their interests with those of the stockholders. Over the last two years, the Compensation Committee has taken steps to more closely link the compensation of senior executives to the realization of specific performance standards. For example, the percentage of Dr. Irani’s annual equity-based compensation, on a grant date value basis, that is performance-based has risen from 4.3 percent in 2005 to over 60 percent in 2006.

MAJOR COMPENSATION PROGRAM ELEMENTS

EQUITY COMPENSATION rewards the executive for intermediate and long-term accomplishments, through various types of Occidental common stock awards. Stock awards are generally based on the achievement of specific internal or external financial performance goals measured over an intermediate (three to four years) period and stock appreciation rights are granted to reward the executives for growth in the stock price over a longer term. Overall, equity compensation is awarded to align a very significant portion of each executive’s net worth with Occidental’s success in creating stockholder value.

CASH INCENTIVE is designed to reward the executive for current performance. It is an annual compensation award, targeted as a percentage of base salary by the Compensation Committee for each executive officer, near the beginning of the year. The amount received varies with the attainment of Occidental’s annual financial goals and achievement of specific individual objectives by the executive, such as operational priorities, organizational development and governance.

SALARY is the base cash compensation. Salary levels take into account job responsibilities, individual performance, experience level and competitive market data. Salary levels may be adjusted periodically.

OTHER COMPENSATION programs cover benefits, such as defined contribution plans, deferred compensation and certain other benefits. Many of these programs are substantially similar to the basic level of cash and non-cash benefits typically provided by major companies in the oil and gas and chemical industries to salaried employees, except that Occidental does not provide a defined benefit pension plan to its salaried employees. Certain benefits apply only to senior executives.

The following chart shows each of these elements as a percentage of the total compensation received by the named executive officers for 2006:

Name	Major Elements of Each Executive’s Compensation as a Percentage of Total Compensation				Per Summary Compensation Table on Page 20
	Equity⁽¹⁾ (%)	Cash Incentive ⁽²⁾ (%)	Salary (%)	Other ⁽³⁾ (%)	Total ($)
Ray R. Irani	86.9	5.0	2.4	5.7		$	55,626,230
Stephen I. Chazen	88.6	5.0	3.6	2.8		$	19,822,389
Donald P. de Brier	84.2	5.3	6.5	4.0		$	8,531,301
John W. Morgan	85.3	5.0	6.6	3.1		$	7,976,666
Richard W. Hallock	83.0	5.1	7.0	4.9		$	5,920,802

(1)	Reflects the compensation cost for 2006 shown in the “Stock Awards” and “Option Awards” columns of the Summary Compensation Table.
(2)	Reflects the amounts shown in the “Bonus” and “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table.
(3)	Reflects the amounts shown in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” and “All Other Compensation” columns of the Summary Compensation Table.

MANAGEMENT'S ROLE IN EXECUTIVE COMPENSATION

Dr. Irani recommends compensation for Messrs. Chazen, de Brier, Morgan and Hallock to the Compensation Committee. Dr. Irani’s compensation is set only by the Compensation Committee. Dr. Irani and Mr. Hallock, the Executive Vice President for Human Resources, may be present for a portion of each of the Compensation Committee meetings but are not present when compensation decisions regarding Dr. Irani are discussed and made. Mr. Chazen may be present for a portion of certain meetings to provide the Compensation Committee information regarding Occidental’s financial and operating plans and results. Mr. de Brier may be present for a portion of certain meetings to provide legal advice. Occidental prepares materials for each Compensation Committee meeting to assist the Committee in its consideration of executive compensation programs and policies and its administration of plans and programs.

ROLE OF COMPENSATION CONSULTANTS

Neither Occidental nor the Compensation Committee has any standing arrangement with any compensation consultant to determine or recommend the amount or form of senior executive compensation. Each year Occidental participates in compensation surveys conducted by Hewitt Associates LLC, Towers Perrin, Frederic W. Cook & Co. and other compensation consultants in order to better understand external compensation practices. From time to time, Occidental, through its executive compensation department, or the Compensation Committee, will engage a consultant to provide advice on specific compensation issues. For example, in 2006, Hewitt Associates LLC conducted a study to assist the Compensation Committee in its selection of a performance measure for the PRSUs; and in 2007, will be assisting the Compensation Committee with a study of long-term incentives, including the proportion of total compensation that should comprise long-term incentives, the most relevant performance measures and the appropriate type and blend of long-term incentives. In selecting Hewitt, the Compensation Committee was aware that Hewitt has also provided actuarial services to Occidental.

DISCUSSION OF SPECIFIC COMPENSATION PROGRAM ELEMENTS

EQUITY COMPENSATION - Equity awards represent the largest portion of the total compensation value provided to executive officers. Executives may be granted equity incentives, which include performance-based restricted share units and performance stock awards, stock appreciation rights and restricted share units under its stockholder-approved 2005 Long-Term Incentive Plan. Performance-based awards are based on the attainment of specific results, some based only on Occidental’s results and some compared to the total stockholder returns of other companies. The Compensation Committee believes that using several types of equity awards with separate, yet complementary, internal or external performance metrics, reinforces management’s focus on growth in stockholder value. These awards are granted to encourage executives to view Occidental from the stockholders’ perspective, to create an ongoing incentive for executives to increase stockholder value and to retain executives who possess the skills and the commitment to ethical business practices that are crucial to Occidental’s success.

In addition, while most other major oil companies provide senior executives with a defined benefit pension plan providing a fixed monthly retirement benefit that is typically a major source of their retirement income, Occidental has not had such a plan for over twenty years. The absence of a defined benefit plan is taken into account in determining the amount of equity compensation awards to senior executives.

The following are the types of equity incentive awards the Compensation Committee currently uses to achieve the objectives discussed above. Other types of awards, including those with other performance measures, could be granted under the 2005 Long-Term Incentive Plan if the Compensation Committee deems them appropriate.

•

Performance-Based Restricted Share Units (PRSUs) may be granted to the named executive officers at regularly scheduled Compensation Committee meetings. Under the awards, executives receive target share units with an internal performance measure based on Occidental’s three-year cumulative return on equity. The payout amounts vary from 0 to 200 percent of target depending on Occidental’s performance. In the oil and gas industry, effective capital allocation and investment decisions are the primary long-term determinants of stockholder value. The economic success of these investment decisions must be measured over a multi-year period and the Compensation Committee believes return on equity is the best measure of such success for Occidental. Occidental believes consistent success in achieving superior returns on equity contributes to long-term superior growth in stockholder value. Cumulative dividend equivalents are paid in cash at the end of the performance period for the number of shares certified for payout.

•

Stock Appreciation Rights (SARs) may be granted to a small group of officers, including the named executive officers, at regularly scheduled Compensation Committee meetings. The awards support the Committee’s compensation strategy of placing more pay at risk for senior executives and emphasizing the linkage of pay and increase in stock price over the long term. SARs are granted with an exercise price equal to the closing price of Occidental’s common stock on the New York Stock Exchange (“NYSE”) on the date of grant, vest ratably over a period of three years, and expire after ten years. SARs have compensation value to the recipients only if the price of Occidental’s stock appreciates after the date the SARs are granted. Any appreciation through the date of exercise is paid in shares of Occidental’s common stock, net of shares canceled for income taxes.

•

Restricted Share Units (RSUs) may be granted to a select group of employees, including the named executive officers, at regularly scheduled Compensation Committee meetings. The Compensation Committee awards RSUs primarily to retain key executives. The vesting periods for these awards may not be less than three years. Dividend equivalents are paid during the vesting period.

•

Performance Stock Awards (PSAs) may be granted to a select group of executives, including the named executive officers, at regularly scheduled Compensation Committee meetings. For corporate executives, the payment is dependent upon Occidental’s total stockholder return over a four-year performance period compared to the total stockholder returns for a specified group of comparison companies. The comparison using total stockholder returns over a period of time essentially neutralizes major market variables that have an impact on the entire oil and gas industry, thereby rewarding the executives for Occidental’s performance relative to the peer group companies. Executives are granted target share unit awards with a total value that equals a specified percentage of each executive’s base salary. The number of target share units to be awarded is determined by dividing the total value of the award by the closing stock price on the last trading day of the year in which the Compensation Committee made the grant. The payout amounts may vary from 0 percent to 200 percent of target depending upon Occidental’s performance compared with its peers and the number of companies in the peer group at the end of the period. Any payout in excess of target would be paid in cash. Dividend equivalents are paid during the performance period.

STOCK OWNERSHIP GUIDELINES - The Compensation Committee established stock ownership guidelines for Occidental’s senior management in 1996 and reviewed and updated the guidelines in February 2005. Stock ownership includes stock owned by the officer directly or through Occidental’s Savings Plan, outstanding stock awards under the equity incentive plans, such as RSUs, PRSUs and PSAs, and stock awards earned but deferred under Occidental’s 2005 Deferred Stock Program. Under the current guidelines, the cumulative ownership targets are ten times salary for Dr. Irani and five times salary for Messrs. Chazen, de Brier, Morgan and Hallock. As of February 28, 2007, all of the named executive officers were in compliance with the guidelines.

EQUITY GRANT PRACTICES - The Compensation Committee grants equity awards at regularly scheduled meetings normally held the day before regularly scheduled Board meetings. Board meeting dates are set in the prior year. The exercise price for option-type awards or grant date value for RSUs and PRSUs is determined using the closing price on the NYSE on the day the award is made by the Compensation Committee. The grant date value for PSAs is based on the closing price on the NYSE on the trading day immediately preceding the start of the performance period. As specifically authorized by the terms of the 2005 Long-Term Incentive Plan, the Compensation Committee has delegated to the Chairman and Chief Executive Officer the authority to grant awards in the event of hiring a new employee between Compensation Committee meeting dates when an equity award is deemed to be an important element in persuading the employee to join Occidental. In such event, the award is made generally on the date the employee starts work. Any such award is reported to the Compensation Committee. Dr. Irani has not granted any equity awards to the named executive officers.

CASH INCENTIVES - Cash incentives are provided by Occidental to its executives with an annual opportunity to earn non-equity incentive and bonus awards under the Executive Incentive Compensation Plan. Of the total target Executive Incentive Compensation Plan award, 60 percent constitutes the non-equity incentive portion of the award and is based on Occidental’s performance as measured against financial targets established in the first quarter of the year. Core, basic earnings per share was chosen as the financial target for all corporate executives because it provides a clear, commonly accepted measure of annual performance and compensates the executives for current operating performance. For a discussion of core earnings, see Management’s Discussion and Analysis of Financial Condition and Results of Operations in Occidental’s Annual Report on Form 10-K for the year ended December 31, 2006 filed with the Securities and Exchange Commission. The remaining 40 percent, which constitutes the bonus portion of the target Executive Incentive Compensation Plan award, is based on a discretionary assessment of an executive’s achievement of individual performance objectives that focus on Occidental’s other key performance areas, as well as the executive’s response to unanticipated challenges during the year. These other key performance areas include governance and ethical conduct, functional and operating accomplishments, health, environment and safety responsibilities, diversity, and organizational development. Although the incentive target is weighted more heavily on Occidental’s annual financial performance, the executive’s individual performance and accomplishment of individual objectives are also important to Occidental. Therefore, a significant percentage is based on accomplishment of these individual key performance area objectives.

SALARY - Salary is cash-based and constitutes a small portion of the executives’ total compensation. An adjustment to base salary may be considered on an annual basis.

OTHER COMPENSATION AND BENEFITS - As discussed on page 27, Occidental does not have a defined benefit pension program for its salaried employees that provides a fixed monthly retirement payment. However, Occidental has various defined contribution retirement arrangements, which are discussed below.

•

Qualified Plans - All salaried employees paid in U.S. dollars, including the named executive officers, are eligible to participate in one or more tax-qualified, defined contribution plans. The defined contribution retirement plan provides for periodic contributions by Occidental based on annual cash compensation and age up to certain levels determined pursuant to Internal Revenue Service (IRS) regulations and was implemented as a successor plan for the defined benefit pension plan that was terminated in 1983. For 2006, the defined contribution 401(k) savings plan permitted employees to save a percentage of their salary up to the $220,000 annual salary level limit set by IRS regulations and the employee pre-tax contribution was limited to $15,000. Employees may direct their contributions to a variety of investments and Occidental matches employee contributions with Occidental common stock on a dollar for dollar basis, in an amount up to 6 percent of the employee’s base salary. However, employee contributions are not permitted in the fund that invests in Occidental common stock. The amounts contributed to the qualified plans on behalf of the named executive officers are included under the “All Other

	Compensation” column in the Summary Compensation Table on page 20. As of December 31, 2006, the aggregate balances under the qualified plans were $3,671,584 for Dr. Irani, $975,814 for Mr. Chazen, $2,143,936 for Mr. de Brier, $2,475,480 for Mr. Morgan and $875,420 for Mr. Hallock. The named executive officers are fully vested in their account balances under the qualified plans.
•	Nonqualified Retirement Plans - Occidental provides defined contribution retirement benefits to substantially all salaried employees, including its named executive officers, on cash compensation exceeding the tax-qualified salary limit, which for 2006 was $220,000. Annual plan contributions by Occidental for each participant restore the benefit amounts that would have accrued for salary, bonus and non-equity incentive compensation, but for the tax law limitations. Interest on nonqualified retirement plans is allocated on a monthly basis to each participant’s account based on the opening balance of the account in each monthly processing period. The amount of interest earnings credited to each account equals the 5-year U.S. Treasury note rate on the last business day of the processing month plus two percent, converted to a monthly allocation factor. The amounts contributed to the nonqualified retirement plans on behalf of the named executive officers are included under the “All Other Compensation” column in the Summary Compensation Table on page 20. Company contributions, aggregate earnings and aggregate balances for the named executive officers in the nonqualified retirement plans are shown in the Nonqualified Deferred Compensation Table on page 28.
•	Modified Deferred Compensation Plan - Through 2006, essentially all employees who received incentive compensation under the Executive Incentive Compensation Plan were eligible to defer a portion of their base salary and their annual cash incentive award each year. The deferred compensation programs and amendments made to them in 2006, including caps on future deferrals and certain early distribution options, are described beginning on page 27. The aggregate amounts of salary and bonuses deferred by the named executive officers are included as compensation in the “Salary,” “Bonus” and “Non-Equity Incentive Compensation” columns of the Summary Compensation Table on page 20, as appropriate. The above market portion of the accrued interest on the deferred amount is reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table. Contributions, aggregate earnings and aggregate balances for the named executive officers for the Deferred Compensation Plans are shown in the Nonqualified Deferred Compensation Table on page 28.
•	Deferred Stock Programs - Occidental’s deferred stock programs permitted executives to defer the receipt of qualifying stock awards. One of the deferred stock programs was terminated effective October 31, 2006, and all deferred share units under that program were distributed in November 2006. The remaining deferred stock program was frozen effective January 1, 2007. For a more complete description of these and other related program amendments, see page 27. For the number of deferred stock units held by the named executive officers as of February 28, 2007, see the table on page 9. Contributions, aggregate earnings, aggregate distributions and aggregate balances for the named executive officers in the Deferred Stock Program are shown in the Nonqualified Deferred Compensation Table on page 28.
•	Employment Agreements - Employment agreements are offered to key executives when it is in the best interest of Occidental and its stockholders to attract and retain such key executives and to ensure the continuity and stability of management. The employment agreements for the named executive officers having such agreements are discussed under “Potential Payments Upon Termination or Change of Control” on page 29.
•	Security - Personal security services are provided to executives as recommended by Occidental’s security department. Depending on the perceived risks to the executive, services range from home detection and alarm systems to the provision of around-the-clock personal security guards. The actual out-of-pocket amount paid by Occidental for such services, less any amounts that are attributable to business travel, are included in the “All Other Compensation” column of the Summary Compensation Table on page 20.
•	Tax Preparation and Financial Planning - A select group of executives, including the named executive officers, receive financial planning services including legal advice related to tax and financial matters. Occidental executives are required to have their personal tax returns prepared by a tax professional qualified to practice before the Internal Revenue Service to ensure compliance with applicable tax laws. Any financial planning fees and expenses that are paid by Occidental on behalf of a specific executive are reflected as taxable income to the executive and are included in the “All Other Compensation” column of the Summary Compensation Table on page 20.
•	Corporate Aircraft Use - Executives and directors may use corporate aircraft for personal usage, if there is space available. The named executive officers and directors reimburse Occidental for any personal use of company aircraft, including guests accompanying the executive or director on a flight taken for a business purpose, at not less than the standard industry fare level rate, which is determined in accordance with IRS regulations. The estimated incremental cost of personal use of the aircraft minus the amount reimbursed by the named executive officers is included in the “All Other Compensation” column of the Summary Compensation Table on page 20. Incremental costs include landing fees, fuel, and additional flight staff costs, including hotel accommodations and meals, associated with personal usage.
•	Insurance - Occidental offers a variety of health coverage options to all employees. Senior executives participate in these plans on the same terms as other employees. In addition, for all employees above a certain grade level, Occidental pays for an annual physical examination. Occidental provides life insurance to all salaried employees equal to twice the employee’s base salary. For certain senior employees, Occidental increases that to three times base salary. Occidental also provides senior executives with excess liability insurance coverage through Occidental. The amounts attributable to such benefits are shown in the “All Other Compensation” column of the Summary Compensation Table on page 20.

•

Other - In addition to the items listed above, Occidental pays club dues, permits some personal usage of company automobiles and permits the use of administrative assistants for secretarial services. Occidental and the Compensation Committee believe that while there is some personal benefit to the executives, these benefits are incidental to the performance of their duties and are reasonable and consistent with Occidental’s overall compensation program. The amounts attributable to such benefits are shown in the “All Other Compensation” column of the Summary Compensation Table.

CONSIDERATIONS FOR EXECUTIVE OFFICER COMPENSATION FOR 2006

The Compensation Committee discussed the components of the compensation for the named executive officers for 2006 in regularly scheduled Compensation Committee meetings held in December 2005, February, July and December 2006, and in the February 2007 meeting.

In the December 2005 meeting, the Compensation Committee reviewed Dr. Irani’s accomplishments for 2005. The Compensation Committee also reviewed Occidental’s results, among other factors, as a framework for setting target award levels for PSAs to be granted with a performance period starting January 1, 2006. The Compensation Committee set the target PSA award levels for Dr. Irani and the other individuals who were named as executive officers in the 2005 proxy statement (the “2005 NEOs”) at 70 percent to 165 percent of base salary. Data considered included performance metrics for other oil and gas companies such as return on equity, return on capital employed and total stockholder return. Additionally, the elements of total compensation for each of the 2005 NEOs as compared to the total compensation for the top five executives in other oil and gas companies were reviewed as disclosed in those companies’ respective 2005 proxy statements.¹

In the February 2006 meeting, the Compensation Committee set the 2006 core, basic earnings per share targets for the non-equity incentive portion of the Executive Incentive Compensation Plan incentive award, based on an analysis of various forecasted financial-result scenarios, resulting in the award being zero percent if earnings per share fall below $4.50, and increasing ratably thereafter, up to 200 percent of target if earnings per share reach $5.50. The Compensation Committee then reviewed cash incentive information derived from a number of compensation surveys and established individual percentage targets for Executive Incentive Compensation Plan awards ranging from 60 percent to 150 percent of base salary. The surveys reviewed, which are all commercially available to survey participants, were conducted by Frederic W. Cook & Co., Towers Perrin, Hewitt Associates LLC and Hay Group.

In the July 2006 meeting, the Compensation Committee approved the issuance of long-term equity incentive compensation awards consisting of PRSUs, RSUs and SARs. In order to increase the percentage of equity compensation based on performance, the Compensation Committee decided to grant the 2005 NEOs, PRSUs rather than RSUs, which had been issued in prior years, but for which vesting was not based on performance criteria. After reviewing a study conducted for the Compensation Committee by Hewitt Associates LLC, which also provides actuarial and other benefits-related services to Occidental, the Compensation Committee concluded that the performance-based measure for the PRSUs would be based on Occidental’s cumulative return on equity over a three-year period. The Compensation Committee believes the measure would further align the objectives of Occidental’s senior executives with Occidental’s financial goals of achieving top quartile return on equity in the oil and gas industry. In determining the size of all of the awards to the 2005 NEOs, the Compensation Committee took into consideration total direct compensation for senior executives of other oil and gas companies derived from their 2006 proxy statements.² The Compensation Committee also considered the size and types of equity awards granted in the prior year.

PRSU payment amounts vary from 0 to 200 percent of target for cumulative return on equity over the three-year period. Payout will be at 200 percent of the targeted share units for cumulative return on equity of 60 percent or more over the three-year period. No payout will be made unless cumulative return on equity is at least 33 percent, at which level payout will be 20 percent of target and increase ratably thereafter as the cumulative return increases. Target payout will occur if cumulative return on equity reaches 45 percent. Occidental’s cost of equity capital was estimated at 11 percent, therefore, a minimum threshold of 33 percent over three years was selected to ensure that a payout would be made only if total return exceeded Occidental’s cost of capital.

In setting the performance criteria, the Compensation Committee took into account that Occidental had achieved record financial performance in 2005 in an environment of record high oil and gas prices. The Compensation Committee also considered that Occidental is operating in a highly competitive environment with rapidly escalating costs and that the equity base was expected to continue increasing, both of which would make future performance targets more difficult to reach. The Compensation Committee set the target return on equity at a level that would require that most of the following occur: (1) successful execution of Occidental’s operating strategy; (2) effective allocation and expenditure of capital; (3) continuation of oil and gas prices at approximately 2006 levels; and (4) chemical segment earnings continuing at approximately 2006 levels. The maximum return-on-equity level would require essentially all of the above to occur on a sustained basis. The PRSUs and RSUs are included in the “Stock Awards” column and the value of the SARs are shown in the “Option Awards” column of the Summary Compensation Table on page 20. The amounts of the grants and the grant date fair values of the awards are shown in the Grants of Plan-Based Awards Table on page 23.

In the December 2006 meeting, the Compensation Committee reviewed Dr. Irani’s accomplishments for 2006. The Compensation Committee also reviewed Occidental’s results, among other factors, as a framework for setting the target award levels for PSAs at 70 percent to 165 percent of base salary and granted PSAs with a four-year performance period starting January 1, 2007. The PSAs have a grant date of January 1, 2007 and, accordingly, are not included in the compensation tables below. Data reviewed by the Compensation Committee included performance

_________________________

1	The companies reviewed were: Anadarko Petroleum Corporation, Apache Oil Corporation, Burlington Resources, Chevron Corporation, ConocoPhillips Corporation, Devon Energy Corporation, ExxonMobil Corporation, Hess Corporation, Kerr-McGee Corporation, Marathon Oil Corporation and Unocal.
2	The Proxy Statements reviewed included Anadarko Petroleum Corporation, Apache Oil Corporation, Chevron Corporation, ConocoPhillips Corporation, Devon Energy Corporation, ExxonMobil Corporation, Hess Corporation, Kerr-McGee Corporation and Marathon Oil Corporation.

metrics for other oil and gas companies such as return on equity, return on capital employed and total stockholder return. Additionally, the elements of total compensation for the top five executives in other oil and gas companies were reviewed as disclosed in those companies’ respective 2006 proxy statements.³ The Compensation Committee also considered equity information, such as prior award levels, outstanding awards, value realized in 2006 from prior awards and overall Occidental stock ownership.

In the February 2007 meeting, the Compensation Committee approved the total cash incentive compensation to be paid pursuant to the Executive Incentive Compensation Plan for 2006 based on the core, basic earnings per share achieved and the executive’s accomplishments of their individual performance objectives in the prior year. The 2006 financial results yielded core, basic earnings per share of $5.10, resulting in a 120 percent payout of the non-equity incentive portion of the Executive Incentive Compensation Plan award for the named executive officers. Total cash incentive payments to the named executive officers under the Executive Incentive Compensation Plan for 2006, including the bonus portion, ranged from 109 percent to 144 percent of the total target award amounts. Additionally, the Compensation Committee certified the total stockholder return calculations for the performance period from January 1, 2003 through December 31, 2006 in order to determine the payout for the PSAs that were granted in December 2002. The values of the vested PSAs are not included in the Option Exercises and Stock Vested table on page 26 because certification occurred in 2007. The number of shares earned by Dr. Irani, Mr. Chazen, Mr. de Brier, Mr. Morgan and Mr. Hallock were 274,168, 59,052, 54,232, 45,768 and 39,368, respectively. The Compensation Committee also set the core, basic earnings per share target for 2007 Executive Incentive Compensation Plan awards based on an analysis of various forecasted financial-result scenarios. As a result, the award for 2007 will be zero percent if earnings per share fall below $2.50, and will increase up to 200 percent of the non-equity incentive portion of target for earnings per share of $4.00. The award will pay at 100 percent of target for earnings per share of $3.25. The Compensation Committee then reviewed cash incentive information derived from a number of compensation surveys and established individual Executive Incentive Compensation Plan incentive targets for 2007. The surveys used consisted of those conducted by Frederic W. Cook & Co., Towers Perrin, Hewitt Associates LLC and Hay Group. With a view toward increasing the proportion of performance-based compensation, including performance-based equity awards, the Compensation Committee retained Hewitt Associates LLC to study long-term incentives, including the proportion of total compensation that should comprise long-term incentives, the most relevant performance measures and the appropriate type and blend of such incentives. The Compensation Committee also requested Occidental’s executive compensation and benefits department to perform an internal compensation relationship analysis.

The specific considerations for each of the named executives with respect to their 2006 compensation are discussed below. Overall, the Compensation Committee concluded that the senior executive management team has consistently delivered exceptional growth in stockholder value as well as superior financial results both in absolute terms and relative to the performance of other oil and gas companies. The Compensation Committee also believes that this management team is uniquely qualified to continue to achieve superior performance for Occidental, continually growing stockholder value. Consequently, the Compensation Committee has provided these executives exceptional compensation commensurate with their performance to reward them and to encourage them to continue to focus on growth in stockholder value.

DR. IRANI - Dr. Irani is the Chairman, President and Chief Executive Officer of Occidental. Under Dr. Irani’s leadership, Occidental has grown to become the 4^th largest oil and gas company in the U.S., based on 2005 market capitalization. Dr. Irani sets the strategic direction for Occidental and oversees its implementation.

Under Dr. Irani’s leadership, Occidental has achieved leading industry operating results. For example, income and cash flow per barrel of oil equivalent of $19.45 and $16.40, respectively, in 2005 were the highest of a group of twelve oil and gas companies representing a broad cross section of the industry.⁴ Occidental’s finding and development costs per barrel were in the top quartile of this group for the period 2003 - 2005. Average reserve life improved through a successfully executed acquisition and disposition program coupled with a constant emphasis on operating and financial discipline. Other key performance measures the Compensation Committee reviewed in setting award levels for Dr. Irani were Occidental’s return on equity and total return to stockholders over the last three-year period compared with other large oil and gas companies. Occidental achieved return on equity and cumulative total return to stockholders of 31.4 percent and 200.4 percent, respectively, for the 2003 – 2005 period. For those performance measures, Occidental exceeded the results of all major U.S.-based integrated oil and gas companies, including ExxonMobil Corporation, Chevron Corporation and ConocoPhillips Corporation and, for both measures, all other oil and gas companies in the group⁵, with the exception of one. During the same three-year period, Occidental’s return on capital employed was higher than all other U.S.-based oil and gas companies in such group, except ExxonMobil Corporation.

In addition, during his leadership as CEO since December 1990, the strategy set by Dr. Irani has resulted in significant increase in stockholder value. From December 1990 through 2005, Occidental’s stock price increased from approximately $9 per share to approximately $40 per share, and its cumulative total stockholder return for this period has been 699 percent. The cumulative total stockholder return reflected by the S&P 500 Index and the S&P 500 Integrated Oil & Gas Index was 413 percent and 521 percent, respectively, during this period. For the period from December 31, 2000 through the end of 2005, Occidental’s stock price increased from approximately $12 per share to approximately $40 per share and its total cumulative stockholder return was 279 percent. The cumulative total stockholder return reflected by the S&P 500 Index and the S&P 500 Integrated Oil & Gas Index for this period was 3 percent and 59 percent, respectively. Occidental’s peer group cumulative total

_________________________

3	The other oil and gas companies reviewed included Anadarko Petroleum Corporation, Apache Oil Corporation, Chevron Corporation, ConocoPhillips Corporation, Devon Energy Corporation, ExxonMobil Corporation, Hess Corporation, Kerr-McGee Corporation and Marathon Oil Corporation.
4	The companies were Anadarko Petroleum Corporation, Apache Oil Corporation, BP plc, Chevron Corporation, ConocoPhillips Corporation, Devon Energy Corporation, EnCana Corporation, ExxonMobil Corporation, Hess Corporation, Kerr-McGee Corporation and Marathon Oil Corporation.
5	The companies were Anadarko Petroleum Corporation, Apache Oil Corporation, Chevron Corporation, ConocoPhillips Corporation, Devon Energy Corporation, ExxonMobil Corporation, Hess Corporation, Kerr-McGee Corporation and Marathon Oil Corporation.

stockholder return was 104 percent for the same period. In addition, Occidental’s total market capitalization was approximately $5 billion in December 1990, $9 billion in December 2000 and $32 billion in December 2005.

Several years ago, Occidental determined that the Middle East and North Africa should be one of Occidental’s core strategic areas. Dr. Irani has developed particularly strong relationships with government leaders in a number of Middle East countries. These personal relationships that have been developed and sustained by Dr. Irani are a competitive advantage for Occidental and have allowed Occidental to establish credibility similar to that enjoyed by significantly larger oil companies in being considered for business opportunities. Additionally, under Dr. Irani’s leadership, Occidental has built an effective team that has contributed to Occidental’s Middle East success in business development and in operational projects. Dr. Irani’s relationships have allowed Occidental to develop insight into the future plans and objectives of these Middle East countries, which Occidental believes will enable it to successfully compete for significant future business opportunities.

Based on the superior operating performance Occidental has achieved, its exceptional growth in stockholder value and its ability to position itself for significant future growth, the Compensation Committee concluded that Dr. Irani has added and is expected to continue to add significant value to Occidental and its stockholders. Accordingly, the Compensation Committee has provided unique and significant compensation opportunities to Dr. Irani to reward him for those contributions to Occidental and to ensure his continued leadership.

The components of Dr. Irani’s 2006 compensation include the following:

•	Equity Compensation - In order to continually align Dr. Irani’s future performance with Occidental’s long-term objectives and growth in stockholder value, the Compensation Committee provided him with the opportunity to earn significant additional compensation if certain performance criteria and stock price growth were achieved over time. Therefore, the Compensation Committee awarded him 500,000 target PRSUs, target PSAs at 165 percent of base salary (53,706 PSAs) and 1.2 million SARs. In determining the size of Dr. Irani’s awards, the Compensation Committee considered his long-term performance and the equity information discussed in the Compensation Committee meetings described above. The amount and total grant date fair value of Dr. Irani’s equity-based and option-type awards for 2006 are shown on the Grants of Plan-Based Awards Table on page 23. The related current year compensation costs for such awards are shown in the Summary Compensation Table on page 20.
•	Non-Equity Incentive Compensation and Cash Bonus - Dr. Irani’s individual target amount under the Executive Incentive Compensation Plan was 150 percent of base salary. The threshold, target and maximum payout amounts of Dr. Irani’s non-equity incentive portion of his Executive Incentive Compensation Plan award are shown in the Grants of Plan-Based Awards Table on page 23 and actual payout amounts are shown in the Summary Compensation Table on page 20. Dr. Irani’s non-equity incentive compensation was determined by Occidental’s core, basic EPS results for 2006. His bonus was based on his achievement of individual key performance objectives. Because Occidental’s 2006 core, basic earnings per share was $5.10, his non-equity incentive compensation was $1,404,000. His target bonus was $780,000 and, for the reasons described above, the amount he received was $1,396,000.
•	Salary - The Compensation Committee reviewed Dr. Irani’s salary level and, based on overall compensation, did not adjust that amount.

MR. CHAZEN - Mr. Chazen is Occidental’s Senior Executive Vice President and Chief Financial Officer. In that role, he is responsible for implementing Occidental’s overall strategy. In addition to his responsibilities as Chief Financial Officer, Mr. Chazen is responsible for Occidental’s mergers, acquisitions and dispositions, its worldwide oil and gas marketing, its chemicals division, oil and gas reserves management and reporting and its investor relations.

The components of Mr. Chazen’s 2006 compensation include the following:

•	Equity Compensation - In order to continually align Mr. Chazen’s future performance with Occidental’s long-term objectives and growth in stockholder value, the Compensation Committee awarded him 150,000 target PRSUs, target PSAs at 100 percent of base salary (18,028 PSAs) and 576,000 SARs. In determining the size of Mr. Chazen’s awards, the Compensation Committee considered his long-term performance and the equity information discussed in the Compensation Committee meetings described above. The amount and total grant date fair value of Mr. Chazen’s equity-based and option-type awards for 2006 are shown on the Grants of Plan-Based Awards Table on page 23. The related current year compensation costs for such awards are shown in the Summary Compensation Table on page 20.
•	Non-Equity Incentive Compensation and Cash Bonus - Mr. Chazen’s individual target amount under the Executive Incentive Compensation Plan was 100 percent of base salary. The threshold, target and maximum payout amounts of Mr. Chazen’s non-equity incentive portion are shown in the Grants of Plan-Based Awards Table on page 23 and actual payout amounts are shown in the Summary Compensation Table on page 20. Mr. Chazen’s non-equity incentive compensation was determined by Occidental’s core, basic EPS results for 2006. His bonus was based on his achievement of individual key performance objectives. Because Occidental’s 2006 core, basic earnings per share was $5.10, his non-equity incentive compensation was $518,000. His bonus target was $288,000 and, for the reasons described above, the amount he received was $482,000.
•	Salary - The Compensation Committee reviewed Mr. Chazen’s salary level and did not adjust that amount.

MR. DE BRIER - Mr. de Brier is Executive Vice President, General Counsel and Corporate Secretary. As Executive Vice President and General Counsel, he is responsible for Occidental’s worldwide legal and compliance functions.

The components of Mr. de Brier’s 2006 compensation include the following:

•	Equity Compensation - In order to continually align Mr. de Brier’s future performance with Occidental’s long-term objectives and growth in stockholder value, the Compensation Committee awarded him 36,000 target PRSUs, target PSAs at 70 percent of base salary (9,658 PSAs) and 200,000 SARs. In determining the size of Mr. de Brier’s awards, the Compensation Committee considered his long-term performance and the equity information discussed in the Compensation Committee meetings described above. The amount and total grant date fair value of Mr. de Brier’s equity-based and option-type awards for 2006 are shown on the Grants of Plan-Based Awards Table on page 23. The related current year compensation costs for such awards are shown in the Summary Compensation Table on page 20.
•	Non-Equity Incentive Compensation and Cash Bonus - Mr. de Brier’s individual target amount under the Executive Incentive Compensation Plan was 65 percent of base salary. The threshold, target and maximum payout amounts of Mr. de Brier’s non-equity incentive portion are shown in the Grants of Plan-Based Awards Table on page 23 and actual payout amounts are shown in the Summary Compensation Table on page 20. Mr. de Brier’s non-equity incentive compensation was determined by Occidental’s core, basic EPS results for 2006. His bonus was based on his achievement of individual key performance objectives. Because Occidental’s 2006 core, basic earnings per share was $5.10, his non-equity incentive compensation was $258,000. His bonus target was $143,000 and, for the reasons described above, the amount he received was $192,000.
•	Salary - The Compensation Committee reviewed Mr. de Brier’s salary level and did not adjust that amount.

MR. MORGAN - Mr. Morgan is an Executive Vice President of Occidental and President of Oil and Gas – Western Hemisphere. As such, he is responsible for all of Occidental’s oil and gas operations in the U.S. and Latin America. In addition, Mr. Morgan has worldwide responsibility for the oil and gas segment’s engineering operations and its Health, Environment, Safety and Security Programs.

The components of Mr. Morgan’s 2006 compensation include the following:

•	Equity Compensation - In order to continually align Mr. Morgan’s future performance with Occidental’s long-term objectives and growth in stockholder value, the Compensation Committee awarded him 36,000 target PRSUs, target PSAs at 75 percent of base salary (9,860 PSAs) and 200,000 SARs. In determining the size of Mr. Morgan’s awards, the Compensation Committee considered his long-term performance and the equity information discussed in the Compensation Committee meetings described above. The amount and total grant date fair value of Mr. Morgan’s equity-based and option-type awards for 2006 are shown on the Grants of Plan-Based Awards Table on page 23. The related current year compensation costs for such awards are shown in the Summary Compensation Table on page 20.
•	Non-Equity Incentive Compensation and Cash Bonus - Mr. Morgan’s individual target amount under the Executive Incentive Compensation Plan was 70 percent of base salary. The threshold, target and maximum payout amounts of Mr. Morgan’s non-equity incentive portion are shown in the Grants of Plan-Based Awards Table on page 23 and actual payout amounts are shown in the Summary Compensation Table on page 20. Mr. Morgan’s non-equity incentive compensation was determined by Occidental’s core, basic EPS results for 2006. His bonus was based on his achievement of individual key performance objectives. Because Occidental’s 2006 core, basic earnings per share was $5.10, his non-equity incentive compensation was $265,000. His bonus target was $147,000, the amount he received was $135,000.
•	Salary - The Compensation Committee reviewed Mr. Morgan’s salary level and did not adjust that amount.

MR. HALLOCK - Mr. Hallock is the Executive Vice President - Human Resources. As such, he is responsible for Occidental’s worldwide human resource functions including sourcing and development of personnel and compensation and benefits program design and administration.

The components of Mr. Hallock’s 2006 compensation include the following:

•	Equity Compensation - In order to continually align Mr. Hallock’s future performance with Occidental’s long-term objectives and growth in stockholder value, the Compensation Committee awarded him 27,000 RSUs, target PSAs at 70 percent of base salary (7,292 PSAs) and 120,000 SARs. In determining the size of Mr. Hallock’s awards, the Compensation Committee considered his long-term performance and the equity information discussed in the Compensation Committee meetings described above. The amount and total grant date fair value of Mr. Hallock’s equity-based and option-type awards for 2006 are shown on the Grants of Plan-Based Awards Table on page 23. The related current year compensation costs of such awards are shown in the Summary Compensation Table on page 20.
•	Non-Equity Incentive Compensation and Cash Bonus - Mr. Hallock’s individual target amount under the Executive Incentive Compensation Plan was 60 percent of base salary. The threshold, target and maximum payout amounts of Mr. Hallock’s non-equity incentive portion are shown in the Grants of Plan-Based Awards Table on page 23 and actual payout amounts are shown in the Summary Compensation Table on page 20. Mr. Hallock’s non-equity incentive compensation was determined by Occidental’s core, basic EPS results for 2006. His bonus was based on his achievement of individual key performance objectives. Because Occidental’s 2006 core, basic earnings per share was $5.10, his non-equity incentive compensation was $180,000. His bonus target was $100,000 and, for the reasons described above, the amount he received was $120,000.
•	Salary - The Compensation Committee reviewed Mr. Hallock’s salary level and increased his salary for 2006 by $16,000 to $416,000.

CONSEQUENCES OF MISCONDUCT

Occidental’s Board of Directors adopted a Code of Business Conduct in 1997 that makes it a violation of the Code of Business Conduct for any officer, employee or director during the course of his or her employment to violate or circumvent any laws of the United States or a foreign country. The Audit Committee of the Board of Directors oversees compliance with the Code of Business Conduct and has put in place procedures, including a compliance hot line, to assure that all violations or suspected violations of the Code of Business Conduct are reported promptly without fear of retaliation. If a named executive officer were to be found to have violated the Code of Business Conduct, such officer would be subject to disciplinary action, which may include termination, referral for criminal prosecution and reimbursement to Occidental or others for any losses or damages resulting from the violation.

TAX AND ACCOUNTING CONSIDERATIONS

Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended, places a limit of $1,000,000 on the amount of compensation that Occidental may deduct in any one year with respect to each of its five most highly paid executive officers. Certain performance-based compensation elements approved by stockholders, such as stock appreciation rights, performance-based restricted share units and performance stock awards, are not subject to the deduction limit. Although tax consequences are considered in its compensation decisions, the Compensation Committee has not adopted a policy that all compensation must be deductible. Rather, the Compensation Committee gives priority to overall compensation objectives discussed above.

It is expected that performance-based awards, unlike RSUs, will not be subject to the deduction limits prescribed by Section 162(m) of the Internal Revenue Code. When the Compensation Committee granted PRSUs to the named executive officers in July 2006, it took into consideration that a tax benefit will be realized based on the distribution date value of the stock for any potential distribution that is made in July 2009.

As noted in the discussion of Nonqualified Deferred Compensation, Occidental amended its deferred compensation plans, which became the Modified Deferred Compensation Plan in 2006. In connection with such amendments, participants were given the option to change distribution elections. Additionally, Occidental terminated the Deferred Stock Program ("DSP") and distributed the balances in that plan. The 2005 Deferred Stock Program ("2005 DSP") was frozen for future deferral elections and participants were given the option of a special one-time distribution election. As a result of the distributions of performance-based stock under the DSP and the prospective distribution under the 2005 DSP, Occidental will be able to reduce its tax payments related to those amounts in the year the distribution is made, rather than in the year in which the participant retires. The amount of this accelerated benefit related to the 2006 distributions was $37 million and included approximately $23 million related to the named executive officers. As a result of the distributions of the deferred non-performance-based stock, Occidental will forego any deductions it could have realized if the distributions were made after the participant retired. Therefore, Occidental wrote off approximately $40 million of the $55 million deferred tax asset that had been recognized in the financial statements prior to the changes.

The amount of the stock distributed pursuant to the terminated plan was reduced by approximately 1.9 million shares, which were withheld to satisfy income taxes related to the distribution. Additionally, the number of shares used in the calculation of earnings per share was reduced by those 1.9 million shares, which has the effect of increasing earnings per share. Dividend equivalents were paid on share units accumulated in the DSP until the distribution. As a result of the net settlement discussed above, Occidental estimates that, based on the current dividend rate, Occidental will avoid paying approximately $1.7 million of dividends annually.

Distributions to be made out of the Modified Deferred Compensation Plan in 2007 are expected to decrease the interest expense for 2007 by approximately $2.7 million and thereafter by approximately $6.0 million per year. The plan modifications made with respect to interest rates will result in interest expense savings on the remaining balances by Occidental in 2009 and in future years.

COMPENSATION COMMITTEE REPORT

The Executive Compensation and Human Resources Committee of the Board has reviewed and discussed the Compensation Discussion and Analysis for the year ended December 31, 2006 with management. Based on such reviews and discussions, the Executive Compensation and Human Resources Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statement for the 2007 Annual Meeting of Stockholders.

Respectfully submitted,

THE EXECUTIVE COMPENSATION AND
HUMAN RESOURCES COMMITTEE

John S. Chalsty (Chair)

Spencer Abraham (Vice Chair)

R. Chad Dreier

Irvin W. Maloney

Rodolfo Segovia

Rosemary Tomich

PERFORMANCE GRAPH

The following graph compares the yearly percentage change in Occidental’s cumulative total return on its common stock with the cumulative total return of the Standard & Poor's 500 Stock Index and with that of Occidental’s peer group over the five-year period ended on December 31, 2006. The graph assumes that $100 was invested in Occidental common stock, in the stock of the companies in the Standard & Poor's 500 Index and in a portfolio of the peer group companies, weighted by their relative market values each year and that all dividends received were reinvested. The peer group used in the analysis consists of Anadarko Petroleum Corporation, Apache Corporation, Chevron Corporation, ConocoPhillips, Devon Energy Corporation, ExxonMobil Corporation, Hess Corporation and Occidental. The peer group changed from the prior year's since certain companies which were included in the peer group had been acquired.

	12/31/2001	12/31/2002	12/31/2003	12/31/2004	12/31/2005	12/31/2006
Occidental	$100	$111	$170	$240	$334	$415
Peer Group	100	88	111	144	172	225
S&P 500	100	78	100	111	117	135

EXECUTIVE COMPENSATION TABLES

Set forth below are tables showing for Dr. Irani, Occidental’s principal executive officer, Stephen Chazen, Occidental’s principal financial officer, and the three other highest-paid executive officers of Occidental serving as executive officers on December 31, 2006: (1) in summary form, the compensation attributed to such executives for 2006, including the compensation cost related to the portion of stock and option awards granted in 2006 and in prior years that are reported as compensation expense in Occidental’s 2006 Consolidated Financial Statements; (2) the equity incentive plan and non-equity incentive awards granted to such executives in 2006; (3) outstanding equity awards held by such executives as of December 31, 2006; (4) options exercised by such executives and their stock awards vested; and (5) the required information related to the nonqualified deferred compensation plans for such executives. The compensation tables should be read in conjunction with the Compensation Discussion and Analysis (see page 10), which explains Occidental’s compensation plans and philosophy and provides information about the compensation decisions made with respect to the listed executives for 2006.

SUMMARY COMPENSATION TABLE

The table below and the accompanying footnotes summarize the compensation attributed to such executives for 2006, including the compensation cost related to the stock options and awards granted in 2006 and in prior years that are reported as compensation expense in Occidental’s 2006 Consolidated Financial Statements.

Name and Principal Position	Year	Salary ($)			Bonus ($) (1)			Stock Awards ($) (2)		Option Awards ($) (3)		Non-Equity Incentive Plan Compensation ($) (4)			Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (5)		All Other Compensation ($)			Total ($)

Ray R. Irani Chairman, President and Chief Executive Officer	2006	$	1,300,000		$	1,396,000		$	30,995,422	$	17,372,169	$	1,404,000		$	679,396	$	2,479,243	(6)	$	55,626,230

Stephen I. Chazen Senior EVP and Chief Financial Officer	2006	$	720,000		$	482,000	(7)	$	9,142,299	$	8,408,317	$	518,000	(7)	$	157,982	$	393,791	(8)	$	19,822,389

Donald P. de Brier EVP, General Counsel and Secretary	2006	$	551,000		$	192,000	(9)	$	3,876,056	$	3,309,577	$	258,000	(9)	$	96,399	$	248,269	(10)	$	8,531,301

John W. Morgan EVP and President - Oil and Gas, Western Hemisphere	2006	$	525,000	(11)	$	135,000		$	3,512,978	$	3,293,562	$	265,000		$	41,328	$	203,798	(12)	$	7,976,666

Richard W. Hallock EVP – Human Resources	2006	$	416,000		$	120,000		$	2,684,328	$	2,228,365	$	180,000		$	120,539	$	171,570	(13)	$	5,920,802

(1)	The amounts shown represent the discretionary portion of the executive’s annual Executive Incentive Compensation Plan award.
(2)	The amounts in the “Stock Awards” column include the compensation cost for 2006 related to stock awards granted in 2006 and in prior years, computed in accordance with Statement of Financial Accounting Standard No. 123 (Revised 2004), “Share-Based Payment” (“FAS 123(R)”). See Note 12 to the Consolidated Financial Statements in Occidental’s Annual Report on Form 10-K for the year ended December 31, 2006, regarding assumptions underlying valuation of equity awards. See “Grants of Plan-Based Awards” on page 21 for information about equity awards granted for 2006 and “Outstanding Equity Awards at December 31, 2006” for information with respect to awards outstanding at year end. The ultimate payout value may be significantly more or less than the amounts shown, possibly zero, depending on the outcome of the performance criteria in the case of PSAs and PRSUs and the price of Occidental stock at the end of the performance or restricted period. For a description of the performance criteria, see “Compensation Discussion and Analysis” on page 10.
(3)	The amounts in the “Option Awards” column include the compensation cost for 2006 related to option awards granted in 2006 and in prior years, computed in accordance with FAS 123(R). See Note 12 to Consolidated Financial Statements in Occidental’s Annual Report on Form 10-K for the year ended December 31, 2006, regarding assumptions underlying valuation of equity awards. See “Grants of Plan-Based Awards” on page 21 for information about equity awards granted for 2006 and “Outstanding Equity Awards at December 31, 2006” for information with respect to awards outstanding at year end. The ultimate payout value may be significantly more or less than the amounts shown, possibly zero, depending the price of Occidental stock during the term of the option award.
(4)	The amounts represent the performance-based portion of the executive’s annual Executive Incentive Compensation Plan award. The payout was determined based on Occidental’s attainment of specified earnings per share targets. See "Compensation Discussion and Analysis" on page 10.
(5)	The amounts represent the above-market portion of interest the executives earned during the year on their deferred compensation balances (see page 27 for a description of the Deferred Compensation Plans).
(6)	Includes $383,981 of director’s fees paid by Lyondell Chemical Company, an equity investee of Occidental (“Lyondell”), which includes Lyondell’s 2006 compensation cost for restricted stock units and associated cash payments that vested upon Dr. Irani’s retirement from the Lyondell board; $13,200 credited pursuant to the Occidental Petroleum Corporation Savings Plan (the “Savings Plan”), a 401(k) savings plan pursuant to which Occidental matches all employee contributions up to six percent of base salary, subject to applicable limitations; $652,890 credited pursuant to the Occidental Petroleum Corporation Supplemental Retirement Plan (the “Supplemental Retirement Plan”) described on page 27; $143,001 for life insurance premiums; $45,306

	in tax gross-ups related to the amounts paid by Occidental for spousal travel; and $1,240,865 in the aggregate for personal benefits. Personal benefits include security services ($562,589); tax preparation and financial planning services paid by Occidental in 2006 ($556,470) because a substantial portion of the services were rendered for Dr. Irani; administrative assistance, club dues, automobile usage, airplane usage, and excess liability insurance. Personal benefits are described beginning on page 13.
(7)	Mr. Chazen elected to defer $500,000 of the aggregate amounts shown in the “Bonus” and “Non-Equity Incentive Plan Compensation” columns until retirement.
(8)	Includes $113,892 of director’s fees paid by Lyondell, which includes Lyondell’s 2006 compensation cost for restricted stock units and associated cash payments that vested in 2006; $13,200 credited pursuant to the Savings Plan; $255,690 credited pursuant to the Supplemental Retirement Plan; and $11,009 for life insurance premiums.
(9)	Mr. de Brier elected to defer 100 percent of the aggregate amounts shown in the “Bonus” and “Non-Equity Incentive Plan Compensation” columns.
(10)	Includes $13,200 credited pursuant to the Savings Plan; $162,270 credited pursuant to the Supplemental Retirement Plan; $48,539 for life insurance premiums; and $24,260 in the aggregate for personal benefits. Personal benefits include security services, tax preparation and financial planning services, club dues and excess liability insurance. Personal benefits are described beginning on page 13.
(11)	Mr. Morgan elected to defer $192,000 of his salary. This amount is also shown in the Nonqualified Deferred Compensation table on page 28 in the column headed “Executive Contributions in 2006”.
(12)	Includes $13,200 credited pursuant to the Savings Plan; $149,070 credited pursuant to the Supplemental Retirement Plan; $11,520 credited pursuant to the Modified Deferred Compensation Plan to compensate for the matching contribution not made under the Savings Plan because of his deferral of a portion of his base salary; $16,448 for life insurance premiums; and $13,560 in the aggregate for personal benefits. Personal benefits include tax preparation and financial planning services, aircraft usage and excess liability insurance. Personal benefits are described beginning on page 13.
(13)	Includes $13,200 credited pursuant to the Savings Plan; $108,570 credited pursuant to the Supplemental Retirement Plan; $30,786 for life insurance premiums; and $19,014 in the aggregate for personal benefits. Personal benefits include security services, tax preparation and financial planning services, excess liability insurance and physical examination. Personal benefits are described beginning on page 13.

GRANTS OF PLAN-BASED AWARDS

The table below and the accompanying narrative summarize the plan-based awards granted by the Compensation Committee to the named executive officers in respect of 2006.

In their December 2005 meeting, the Compensation Committee awarded, effective January 1, 2006, to each of the named executive officers a Performance Stock Award (“PSA”) pursuant to the 2005 Long-Term Incentive Plan with a four-year performance period beginning January 1, 2006. The number of shares received at the end of the performance period will depend on the attainment of performance objectives based on a peer company comparison of total stockholder return. Depending on Occidental's ranking among its peers and subject to the grantee remaining employed throughout the performance period, the grantee will receive an amount ranging from 0 percent to 200 percent of the target share amount; provided, however, if the grantee dies, becomes disabled, retires or is terminated for the convenience of Occidental during the performance period, then the grantee will forfeit the right to receive a pro rata portion of the payout based on the days remaining in the performance period after such event. However, under the provisions of his employment agreement, any long-term incentive awards granted to Dr. Irani become fully vested immediately in the event of termination by Occidental or his retirement with the consent of Occidental. During the performance period, dividend equivalents are paid to the grantees in cash on the target shares in an amount equal to the dividend declared per share of common stock. In the event of a Change of Control (as defined in the 2005 Long-Term Incentive Plan), the grantee's right to receive the number of target shares becomes nonforfeitable. Awards earned in excess of the target shares will be paid out in cash in an amount equal to the closing price of the common stock on the New York Stock Exchange on the date of certification of the attainment of the performance goals. For additional information on the determination of threshold, target and maximum payouts for these awards, see Compensation Discussion and Analysis beginning on page 10.

In February 2006, the Compensation Committee provided each of the named executive officers with an opportunity to earn annual cash incentive awards under the Executive Incentive Compensation Plan. The awards are tied to the achievement of performance objectives and are expressed as a percentage of base salary. Sixty percent of the planned award is based on Occidental’s performance as measured against predetermined financial targets and is included on the table below under the “Estimated Future Payouts under Non-Equity Incentive Plan Awards” column. For Occidental’s five highest paid executives and other corporate executives, the financial performance measure is core, basic earnings per share. The remaining 40 percent of the planned award is based on a discretionary assessment of an executive’s achievement of predetermined individual performance objectives, as well as the executive’s response to unanticipated challenges during the plan year and is included in the “Bonus” column of the Summary Compensation Table. Actual incentive payments (including the bonus portion) may vary from zero percent to 200 percent of the incentive target, based on Company and executive performance, thus directly aligning executive pay with a key financial performance measure. For the 2006 performance period, the Compensation Committee established individual incentive targets for its named executive officers ranging from 60 percent to 150 percent of base salary. For additional information on the earnings per share targets and the determination of threshold, target and maximum for these awards, see Compensation Discussion and Analysis beginning on page 10 and for the actual amounts paid, including the bonus portion, see the Summary Compensation Table on page 20.

In July 2006, Dr. Irani and Messrs. Chazen, de Brier and Morgan received grants of Performance-Based Restricted Share Units (“PRSUs”) pursuant to the 2005 Long-Term Incentive Plan. The number of shares received at the end of the three-year performance period will depend on the attainment of performance objectives based on Occidental’s return on equity between July 1, 2006 through June 30, 2009. Depending on Occidental's return on equity and subject to the grantee remaining employed throughout the performance period, the grantee will receive an amount ranging from zero percent to 200 percent of the target share amount; provided, however, if the grantee dies, becomes disabled, retires or is terminated for the convenience of Occidental during the performance period, then the grantee will forfeit the right to receive a pro rata portion of the payout based on the days remaining in the performance period after such event. However, under the provisions of his employment agreement, any long-term incentive awards granted to Dr. Irani become fully vested immediately in the event of termination by Occidental or his retirement

with the consent of Occidental. During the performance period, dividend equivalents are accrued with respect to the target shares in an amount equal to the dividend declared per share of common stock and cash equal to the dividend equivalent is paid to the grantees at vesting for the number of shares certified for payout. The performance objectives for these grants and the threshold, target and maximum payout for these awards are described in Compensation Discussion and Analysis beginning on page 10.

In July 2006, each of the named executive officers received a grant of stock appreciation rights (“SARs”). The SARs vest over a three-year vesting period, with approximately one-third of each grant becoming exercisable on each anniversary of the date of grant. The SARs represent the right to receive shares of common stock having a value equal to the excess, if any, of the fair market value at the date and time of exercise of the number of shares of common stock equal to the number of SARs being exercised over the aggregate exercise price. As a result, the number of shares of common stock received upon exercise will always be less than the number of SARs exercised. The vesting and exercisability of the SARs will be accelerated in the event of a Change of Control (as defined in the 2005 Long-Term Incentive Plan). The SARs were granted for a term of 10 years. Upon the termination of the recipient’s employment, the SARs continue to vest and remain exercisable (depending on the circumstances of the termination) for a period of up to the remaining term of the award. However, under the provisions of his employment agreement, the SARs granted to Dr. Irani become fully vested immediately in the event of termination by Occidental or his retirement with the consent of Occidental and are then exercisable for the remaining term of the award. The exercise price of the SARs is equal to the closing price of the common stock on the New York Stock Exchange on the day of the grant. The exercise price and tax withholding obligations, upon exercise, must be paid by surrender of underlying shares, subject to certain conditions.

In July 2006, Mr. Hallock received Restricted Share Units (“RSUs”) pursuant to the 2005 Long-Term Incentive Plan, subject to a three-year vesting period, which will be accelerated in the event of a Change of Control (as defined in the 2005 Long-Term Incentive Plan). During the vesting period, dividend equivalents are credited on the RSUs in an amount equal to the dividend declared per share of common stock and cash equal to the dividend equivalent is paid to the grantee.

Following are the plan-based awards listed in the table below: Executive Incentive Compensation Plan — EICP, Performance Stock Awards — PSA, Performance-Based Restricted Share Units — PRSU, Stock Appreciation Rights — SAR and Restricted Share Units — RSU.

The equity and option awards listed below are the only stock awards that were granted to the named executive officers for 2006.

Name/ Type of Grant	Grant Date (1)	Date Awarded by Compensation Committee	Estimated Future Payouts Under Non-Equity Incentive Plan Awards						Estimated Future Payouts Under Equity Incentive Plan Awards			All Other Stock Awards: Number of Shares or Units	All Other Option Awards: Number of Securities Underlying Options	Exercise or Base Price of Option Awards		Grant Date Fair Value of Stock and Option Awards (3)
			Threshold $		Target $		Maximum $		Threshold #	Target #	Maximum #	#	#	$		$
Ray R. Irani
EICP	1/1/2006	2/15/2006	$	23,400	$	1,170,000	$	2,340,000
PSA ⁽²⁾	1/1/2006	12/5/2005							13,427	53,706	107,412					$	2,614,945
PRSU	7/19/2006	7/19/2006							100,000	500,000	1,000,000					$	25,225,000
SAR	7/19/2006	7/19/2006											1,200,000	$	50.445	$	17,724,000
Stephen I. Chazen
EICP	1/1/2006	2/15/2006	$	8,640	$	432,000	$	864,000
PSA ⁽²⁾	1/1/2006	12/5/2005							4,507	18,028	36,056					$	877,783
PRSU	7/19/2006	7/19/2006							30,000	150,000	300,000					$	7,567,500
SAR	7/19/2006	7/19/2006											576,000	$	50.445	$	8,507,520
Donald P. de Brier
EICP	1/1/2006	2/15/2006	$	4,298	$	214,890	$	429,780
PSA ⁽²⁾	1/1/2006	12/5/2005							2,414	9,658	19,316					$	470,248
PRSU	7/19/2006	7/19/2006							7,200	36,000	72,000					$	1,816,200
SAR	7/19/2006	7/19/2006											200,000	$	50.445	$	2,954,000
John W. Morgan
EICP	1/1/2006	2/15/2006	$	4,410	$	220,500	$	441,000
PSA ⁽²⁾	1/1/2006	12/5/2005							2,465	9,860	19,720					$	480,083
PRSU	7/19/2006	7/19/2006							7,200	36,000	72,000					$	1,816,200
SAR	7/19/2006	7/19/2006											200,000	$	50.445	$	2,954,000
Richard W. Hallock
EICP	1/1/2006	2/15/2006	$	2,995	$	149,760	$	299,520
PSA ⁽²⁾	1/1/2006	12/5/2005							1,823	7,292	14,584					$	355,047
RSU	7/19/2006	7/19/2006										27,000				$	1,362,150
SAR	7/19/2006	7/19/2006											120,000	$	50.445	$	1,772,400

(1)	The date in this column for EICP awards is the date the performance period for the awards started. For equity awards, the date in this column is the grant date recognized pursuant to FAS 123(R) which, other than for PSAs, is the same as the date the award was granted by the Compensation Committee. The Compensation Committee had its regularly scheduled meeting December 5, 2005, and granted PSAs with the performance and vesting period starting January 1, 2006. The effective grant date for the PSAs for FAS 123(R) purposes was January 1, 2006.
(2)	Awards earned in excess of the target will be paid out in cash in an amount equal to the closing price of the common stock on the New York Stock Exchange on the date of certification of the attainment of the performance goals.
(3)	The amount shown is the total FAS 123(R) value on the date of grant of the stock or option award made on such date rather than just the vested portion of the award.

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2006

The following sets forth the outstanding option awards and stock awards that are held by named executive officers as of December 31, 2006. The outstanding option awards and stock awards shown below were granted to the named executives over a period of several years, including in 2006. The FAS 123(R) grant date fair values for the awards that were granted in 2006 are shown in the ”Grants of Plan-Based Awards” table above and the portion of such awards that was reported as compensation expense in Occidental’s 2006 Consolidated Financial Statements is a component of the current year total compensation for each of the named executives. The awards issued in prior years to Dr. Irani, Mr. Chazen, Mr. de Brier and Mr. Morgan were reported in the proxy statements applicable to those years, based on the then existing rules. However, the portion of such awards that was reported as compensation expense in Occidental’s 2006 Consolidated Financial Statements is included in the Summary Compensation Table on page 20. For a description of the performance criteria for equity plan awards, see Compensation Discussion and Analysis on page 10.

		Options Awards						Stock Awards
Name/Type of Award	Grant Date	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($) (1)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1)
Ray R. Irani
Options	7/16/2003	6,424			$	15.565	7/16/2013
Options/SAR/RSU	7/14/2004	933,335	466,665	⁽²⁾	$	24.660	7/14/2014	166,666	⁽³⁾	$	8,138,301
SAR/RSU	7/13/2005	500,000	1,000,000	⁽⁴⁾	$	40.805	7/13/2015	400,000	⁽⁵⁾	$	19,532,000
SAR/PRSU	7/19/2006		1,200,000	⁽⁶⁾	$	50.445	7/19/2016					100,000	^(7,8)	$	4,883,000	⁽⁷⁾
RSU	12/9/2002							42,000	⁽⁹⁾	$	2,050,860
RSU	12/8/2003							80,000	⁽¹⁰⁾	$	3,906,400
RSU	12/6/2004							96,000	⁽¹¹⁾	$	4,687,680
RSU	12/5/2005							123,200	⁽¹²⁾	$	6,015,856
PSA	1/1/2003											274,168	⁽¹³⁾	$	13,387,623	⁽¹³⁾
PSA	1/1/2004											184,660	^(14,15)	$	9,016,948	⁽¹⁴⁾
PSA	1/1/2005											133,656	^(14,16)	$	6,526,422	⁽¹⁴⁾
PSA	1/1/2006											107,412	^(14,17)	$	5,244,928	⁽¹⁴⁾
Stephen I. Chazen
SAR/RSU	7/14/2004	426,668	213,332	⁽²⁾	$	24.660	7/14/2014	46,666	⁽³⁾	$	2,278,701
SAR/RSU	7/13/2005	266,667	533,333	⁽⁴⁾	$	40.805	7/13/2015	133,332	⁽⁵⁾	$	6,510,602
SAR/PRSU	7/19/2006		576,000	⁽⁶⁾	$	50.445	7/19/2016					30,000	^(7,8)	$	1,464,900	⁽⁷⁾
RSU	12/9/2002							18,000	⁽⁹⁾	$	878,940
RSU	12/8/2003							24,000	⁽¹⁰⁾	$	1,171,920
RSU	12/6/2004							36,000	⁽¹¹⁾	$	1,757,880
RSU	12/5/2005							44,800	⁽¹²⁾	$	2,187,584
PSA	1/1/2003											59,052	⁽¹³⁾	$	2,883,509	⁽¹³⁾
PSA	1/1/2004											39,776	^(14,15)	$	1,942,262	⁽¹⁴⁾
PSA	1/1/2005											44,416	^(14,16)	$	2,168,833	⁽¹⁴⁾
PSA	1/1/2006											36,056	^(14,17)	$	1,760,614	⁽¹⁴⁾
Donald P. de Brier
Options	7/11/2001	278,812			$	13.375	7/11/2011
Options	7/17/2002	7,566			$	13.215	7/17/2012
Options	7/16/2003	300,000			$	15.565	7/16/2013
Options/SAR/RSU	7/14/2004	186,668	93,332	⁽²⁾	$	24.660	7/14/2014	20,000	⁽³⁾	$	976,600
SAR/RSU	7/13/2005	93,334	186,666	⁽⁴⁾	$	40.805	7/13/2015	32,000	⁽⁵⁾	$	1,562,560
SAR/PRSU	7/19/2006		200,000	⁽⁶⁾	$	50.445	7/19/2016					7,200	^(7,8)	$	351,576	⁽⁷⁾
RSU	12/9/2002							8,000	⁽⁹⁾	$	390,640
RSU	12/8/2003							12,000	⁽¹⁰⁾	$	585,960
RSU	12/6/2004							10,800	⁽¹¹⁾	$	527,364
RSU	12/5/2005							9,600	⁽¹²⁾	$	468,768
PSA	1/1/2003											54,232	⁽¹³⁾	$	2,648,149	⁽¹³⁾
PSA	1/1/2004											36,528	^(14,15)	$	1,783,662	⁽¹⁴⁾
PSA	1/1/2005											26,436	^(14,16)	$	1,290,870	⁽¹⁴⁾
PSA	1/1/2006											19,316	^(14,17)	$	943,200	⁽¹⁴⁾

		Options Awards						Stock Awards
Name/Type of Award	Grant Date	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($) (1)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1)
John W. Morgan
Options	7/16/2003	80,000			$	15.565	7/16/2013
Options/SAR/RSU	7/14/2004	186,668	93,332	⁽²⁾	$	24.660	7/14/2014	20,000	⁽³⁾	$	976,600
Options/SAR/RSU	7/13/2005	93,334	186,666	⁽⁴⁾	$	40.805	7/13/2015	36,000	⁽⁵⁾	$	1,757,880
SAR/PRSU	7/19/2006		200,000	⁽⁶⁾	$	50.445	7/19/2016					7,200	^(7,8)	$	351,576	⁽⁷⁾
RSU	12/8/2003							11,200	⁽¹⁰⁾	$	546,896
RSU	12/6/2004							12,000	⁽¹¹⁾	$	585,960
RSU	12/5/2005							12,800	⁽¹²⁾	$	625,024
PSA	1/1/2003											45,768	⁽¹³⁾	$	2,234,851	⁽¹³⁾
PSA	1/1/2004											30,824	^(14,15)	$	1,505,136	⁽¹⁴⁾
PSA	1/1/2005											26,988	^(14,16)	$	1,317,824	⁽¹⁴⁾
PSA	1/1/2006											19,720	^(14,17)	$	962,928	⁽¹⁴⁾
Richard W. Hallock
Options	7/16/2003	6,424			$	15.565	7/16/2013
Options/SAR/RSU	7/14/2004	128,000	64,000	⁽²⁾	$	24.660	7/14/2014	14,666	⁽³⁾	$	716,141
Options/SAR/RSU	7/13/2005	64,000	128,000	⁽⁴⁾	$	40.805	7/13/2015	24,000	⁽⁵⁾	$	1,171,920
SAR/RSU	7/19/2006		120,000	⁽⁶⁾	$	50.445	7/19/2016	27,000	⁽¹⁸⁾	$	1,318,410
RSU	12/8/2003							9,600	⁽¹⁰⁾	$	468,768
RSU	12/6/2004							9,600	⁽¹¹⁾	$	468,768
PSA	1/1/2003											39,368	⁽¹³⁾	$	1,922,339	⁽¹³⁾
PSA	1/1/2004											26,516	^(14,15)	$	1,294,776	⁽¹⁴⁾
PSA	1/1/2005											19,192	^(14,16)	$	937,145	⁽¹⁴⁾
PSA	1/1/2006											14,584	^(14,17)	$	712,137	⁽¹⁴⁾

(1)	The amounts shown represent the product of the number of shares or units shown in the column immediately to the left and the closing price on December 29, 2006 of Occidental common stock as reported in the NYSE Composite Transactions, which was $48.83.
(2)	The Option and SAR vest July 14, 2007.
(3)	The RSU vests on July 14, 2007.
(4)	The SAR vests 50 percent per year on July 13, 2007 and July 13, 2008.
(5)	The RSU vests 50 percent per year on July 13, 2007, and July 13, 2008.
(6)	The SAR vests 33 1/3 percent per year on July 19, 2007, July 19, 2008, and July 19, 2009.
(7)	The amounts shown assume threshold payout is achieved. The ultimate payout value may be significantly higher than the amount shown, or possibly zero, depending on the outcome of the performance criteria and the value of Occidental stock at payout.
(8)	The performance and vesting periods for the PRSU end June 30, 2009 and July 18, 2009, respectively.
(9)	The RSU vests on December 9, 2007.
(10)	The RSU vests 50 percent per year on December 8, 2007 and December 8, 2008.
(11)	The RSU vests 33 1/3 percent per year on December 6, 2007, December 6, 2008, and December 6, 2009.
(12)	The RSU vests 25 percent per year on December 5, 2007, December 5, 2008, December 5, 2009, and December 5, 2010.
(13)	The performance period for the PSAs ended December 31, 2006. Payout of the PSA at the number of shares shown was certified at the February 2007 meeting of the Compensation Committee. See Compensation Discussion and Analysis on page 10.
(14)	Payout value as shown assumes maximum payout. However, the ultimate payout may be significantly less than the amounts shown, possibly zero, depending on the outcome of the performance criteria and the value of Occidental stock at payout.
(15)	The performance period for the PSA ends December 31, 2007.
(16)	The performance period for the PSA ends December 31, 2008.
(17)	The performance period for the PSA ends December 31, 2009.
(18)	The RSU vests 33 1/3 percent per year on July 19, 2007, July 19, 2008 and July 19, 2009.

OPTION EXERCISES AND STOCK VESTED IN 2006

The following table summarizes for the named executive officers, the options exercised and the stock awards vested during 2006. The amounts reported as value realized are shown on a before tax basis. The actual number of shares received upon exercise of options by the named executive officers is less than the number of options exercised because of the deduction of the exercise price and withholding for taxes. The number of shares shown for Dr. Irani in the “Sole Voting and Investment Shares” column of the beneficial ownership table on page 9 includes shares he received in connection with option exercises. The options that were exercised by Dr. Irani were granted to him in prior years starting in 1997. During the period from year-end 1997 through 2006, Occidental’s total market capitalization, calculated as the price of Occidental’s common stock multiplied by the number of shares outstanding, increased from approximately $10 billion to approximately $42.5 billion. In addition, each of the option awards was issued at an exercise price, which was the closing price of Occidental’s common stock on the New York Stock Exchange on the applicable grant date. Therefore, the value realized on exercise reflects in its entirety the significant appreciation in the price of Occidental’s common stock from the option grant date to the date of exercise. At the end of 1997, Occidental’s common stock price was $14.66, compared to the price of the common stock on the dates of Dr. Irani’s exercise, which averaged approximately $52.00. The value realized by Dr. Irani represents the appreciation in the stock price after the respective dates of grant, which averaged approximately $37 per share. Each of the option awards issued in prior years was reported in the appropriate compensation tables included in prior years’ proxy statements based on the then existing rules. Each of the other named executives received their option awards on various dates between 2001 and 2003, during which period similar significant increases were achieved in Occidental’s total market capitalization and the Occidental common stock price. For the other named executive officers other than Mr. Hallock, option awards were reported in prior years’ proxy statements at the time they were granted.

The stock awards that vested in 2006 were issued to the named executive officers between 2002 and 2005. These awards were reported in the Summary Compensation Table as compensation in each year for which they were granted. During the period from 2002 to the vesting date in 2006, Occidental’s total market capitalization increased from approximately $10.8 billion to $42.5 billion. The value realized on vesting includes the appreciation in Occidental’s common stock price after the dates when the stock awards were granted. Occidental’s common stock price increased from approximately $13.26 on January 2, 2002 to $48.83 on December 29, 2006.

Previously Granted Vested Option Awards Exercised and Previously Granted Stock Awards Vested in 2006
	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($) (1)			Number of Shares Acquired on Vesting (#) (2)		Value Realized on Vesting ($) (2) (3)
Ray R. Irani	7,073,764	$	270,176,764	⁽⁴⁾	917,196	⁽⁵⁾	$	44,880,978	⁽⁵⁾
Stephen I. Chazen	1,727,388	$	66,170,794	⁽⁶⁾	263,914	⁽⁷⁾	$	13,042,966	⁽⁷⁾
Donald P. de Brier	248,576	$	9,557,692	⁽⁸⁾	126,828	⁽⁹⁾	$	6,082,959	⁽⁹⁾
John W. Morgan	510,100	$	19,667,014	⁽¹⁰⁾	110,944	⁽¹¹⁾	$	5,362,666	⁽¹¹⁾
Richard W. Hallock	290,966	$	11,094,535	⁽¹²⁾	85,058	⁽¹³⁾	$	4,081,116	⁽¹³⁾

(1)	Represents the difference between the closing price of the common stock on the New York Stock Exchange on the exercise date and the option exercise price multiplied by the number of shares exercised.
(2)	Except with respect to Mr. Hallock, all of the shares and any portion of an award settled in cash were deferred pursuant to the deferral arrangements described on page 27. Of the shares shown for Mr. Hallock, 24,900 were deferred.
(3)	Represents the product of the number of shares vested and the closing price of the common stock on the New York Stock Exchange on the vesting date. With respect to RSUs for which the vesting date fell on a non-trading day, the value was calculated using the closing price on the immediately preceding trading day.
(4)	The options exercised had exercise prices ranging from $12.6875 to $15.5650 per share and included options granted between 1997 and 2003. Includes $123,379,484, representing the value of shares canceled to satisfy taxes.
(5)	Includes $4,237,212, which represents the value of shares settled in cash.
(6)	The options exercised had exercise prices ranging from $13.2150 to $15.5650 per share and included options granted between 2001 and 2003. Includes $30,169,021, representing the value of shares canceled to satisfy taxes.
(7)	Includes $912,712, which represents the value of shares settled in cash.
(8)	The options exercised had exercise prices ranging from $13.2150 to $13.3750 per share and included options granted between 2001 and 2002. Includes $4,372,787, representing the value of shares canceled to satisfy taxes.
(9)	Includes $838,202, which represents the value of shares settled in cash.
(10)	The options exercised had exercise prices ranging from $13.2150 to $15.5650 per share and included options granted between 2001 and 2003. Includes $8,997,719, representing the value of shares canceled to satisfy taxes.
(11)	Includes $669,305, which represents the value of shares settled in cash.
(12)	The options exercised had exercise prices ranging from $13.2150 to $15.5650 per share and included options granted between 2002 and 2003. Includes $5,075,922, representing the value of shares canceled to satisfy taxes.
(13)