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OxyChem and Mexichem Announce Formation of 50/50 Joint Venture to Build Ethylene Cracker in Ingleside, Texas

DALLAS / MEXICO CITY--(BUSINESS WIRE)--Occidental Chemical Corporation (OxyChem), a subsidiary of Occidental Petroleum Corporation (NYSE:OXY), and Mexichem, S.A.B. de C.V. (Mexichem) today announced the formation of a 50/50 joint venture, Ingleside Ethylene LLC, to build a 1.2-billion-pound per year capacity ethylene cracker at the OxyChem plant in Ingleside, Texas, along with pipelines and storage at Markham, Texas.

As part of a long-term strategic supply relationship between the companies, essentially all of the ethylene produced from the cracker will be consumed in the manufacture of vinyl chloride monomer (VCM) utilizing existing VCM capacity. VCM will be delivered to Mexichem to produce polyvinyl chloride (PVC) and PVC piping systems.

The ethylene cracker will strengthen the position of Mexichem by taking advantage of competitive energy and feedstock costs in the United States resulting from shale gas development,” said Juan Pablo del Valle Perochena, Chairman of the Board, Mexichem.

The high degree of integration between the two companies from the wellhead through the use of VCM as a raw material in the manufacturing PVC pipe will also create highly competitive assets on a global basis,” said Chuck Anderson, President, OxyChem.

OxyChem, which will build and operate the cracker, has taken a number of relevant steps needed to begin construction, including: completed the front-end engineering and design; received draft permits from the Texas Commission on Environmental Quality; and applied for U.S. Environmental Protection Agency permits in December 2012. OxyChem expects to award the engineering and construction contract in the fourth quarter of 2013, with construction beginning in mid-2014 and the facilities becoming commercially operational in the first quarter of 2017.

About OxyChem

OxyChem is a wholly owned subsidiary of Occidental Petroleum Corporation, one of the largest U.S. oil and gas companies, based on equity market capitalization. OxyChem manufactures and markets basic chemicals, vinyls and other chemicals used in water treatment, paper production, pharmaceuticals, construction, automobile manufacturing, soaps and disinfection products, among others. OxyChem is the No. 1 producer of VCM worldwide. OxyChem is committed to safeguarding the environment and the health and safety of its employees and surrounding communities. OxyChem’s Ingleside plant is one of 18 facilities the company operates that has achieved Star Status as among the safest work sites in the United States under the Occupational Health and Safety Administration’s Voluntary Protection Programs.

About Mexichem

Mexichem is a global leader in plastic piping systems and a leader in the chemical and petrochemical industry, with more than 50 years experience in Latin America and 33 years in the Mexican Stock Exchange. Its stock market capitalization stands at approximately US $9.7 billion. Mexichem exports to more than 50 countries and is present in Latin America, North America, Europe and Asia. In 2012 it billed more than US $4.8 billion, while EBITDA accounted for close to US $1.0 billion. Mexichem employs more than 17 thousand people in the world. It is the only fully integrated refrigerant gas producer in America. It is also the largest PVC resin manufacturer in Latin America, and actively helps countries grow with wide-ranging products in dynamically developing sectors such as construction, housing, potable water and urban sewerage in Mexico, United States, Europe, Asia and Latin America. For more information about Mexichem visit www.mexichem.com

Forward-Looking Statement

Portions of this press release contain forward-looking statements and involve risks and uncertainties that could materially affect expected results of operations, liquidity, cash flows and business prospects. Factors that could cause results to differ materially include, but are not limited to: global commodity pricing fluctuations; supply and demand considerations for Occidental’s products; higher-than-expected costs; not successfully completing, or any material delay of the disclosed projects; general economic slowdowns; political conditions and events; or litigation. Words such as “will”, “would”, “should”, “could”, “may”, “might”, “anticipate”, “plan”, “intend”, “believe”, “expect”, “aim”, “goal”, “target”, “objective”, “become,” “begin,” “likely” or similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Unless legally required, Occidental does not undertake any obligation to update any forward-looking statements, as a result of new information, future events or otherwise. Material risks that may affect Occidental’s results of operations and financial position appear in Part 1, Item 1A “Risk Factors” of the 2012 Form 10-K. Occidental posts or provides links to important information on its website at www.oxy.com.

Contacts

OxyChem
Media
Eric Moses
310-443-6377
eric_moses@oxy.com
or
Investors
Chris Stavros
212-603-8184
chris_stavros@oxy.com
On the web: www.oxychem.com
or
Mexichem
Investors
Juan Francisco Sánchez
T.+(52 55) 5279 8319
jsanchezk@kaluz.com
or
Media
Francisco Galindo
+(52 55) 5554 5419
fgalindo@zimat.com.mx
On the web: www.mexichem.com

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