Shares of Occidental Petroleum drop after city of Carson bans drilling
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Occidental Petroleum Corp. shares dropped for two straight days after the city of Carson imposed a moratorium on all new drilling.
The drilling ban, which was unanimously passed by the Carson City Council on Tuesday, disrupts plans by the oil and gas giant to bore more than 200 wells in the energy-rich city.
The emergency moratorium lasts 45 days but could be extended up to two years. Residents and City Council members said they were worried that Occidental would use the controversial technique known as hydraulic fracturing, or fracking, to find oil, which the company has repeatedly denied.
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Investors responded by driving down Occidental’s stock, which fell nearly 4% this week to close at $92.93 on Thursday.
Occidental announced last month that it is ending a nearly century-long run as a Los Angeles company and moving its headquarters to Houston. It also plans to spin off its California assets into a separate publicly traded company based in the Southland by early next year.
Analysts have said the complicated regulatory environment in California is one reason why Occidental is moving to Texas.
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A state law that went into effect in January mandates that companies must get permits before fracking, a process that involves injecting large volumes of chemical-laced water and sand deep into the ground.
The drilling moratorium disrupts plans by Occidental to drill wells in Carson in an effort to find more oil from the well-explored Dominguez Oil Field.
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