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DERIVATIVES | 12 Months Ended
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Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVES |
NOTE 8 - DERIVATIVES
OBJECTIVE AND STRATEGY Occidental uses a variety of derivative financial instruments and physical contracts to manage its exposure to commodity price fluctuations, transportation commitments and to fix margins on the future sale of stored commodity volumes. Occidental also enters into derivative financial instruments for trading purposes. Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty. Occidental may elect normal purchases and normal sales exclusions when physically delivered commodities are purchased or sold to a customer. Occidental occasionally applies cash flow hedge accounting treatment to derivative financial instruments to lock in margins on the forecasted sales of its natural gas storage volumes. The value of cash flow hedges was insignificant for all periods presented. See Note 1 - Summary of Significant Accounting Policies for Occidental’s accounting policy on derivatives. DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS As of December 31, 2023, Occidental’s derivatives not designated as hedges consisted of marketing derivatives. All interest rate swaps were settled prior to December 31, 2022. Derivative instruments that are not designated as hedging instruments are required to be recorded on the balance sheet at fair value. Changes in fair value will impact Occidental’s earnings through mark-to-market adjustments until the physical commodity is delivered or the financial instrument is settled. MARKETING DERIVATIVES Occidental’s marketing derivative instruments not designated as hedges are short-duration physical and financial forward contracts. A substantial majority of Occidental’s physically settled derivative contracts are index-based and carry no mark-to-market valuation in earnings. As of December 31, 2023, the weighted-average settlement price of these forward contracts was $76.36/Bbl and $2.62/Mcf for crude oil and natural gas, respectively. The weighted-average settlement price was $81.37/Bbl and $7.89/Mcf for crude oil and natural gas, respectively, as of December 31, 2022. Net gains and losses associated with marketing derivative instruments not designated as hedging instruments are recognized currently in net sales. Derivative settlements and collateralization are classified as cash flows from operating activities unless the derivatives contain an other-than-insignificant financing element, in which case the settlements and collateralization are classified as cash flows from financing activities. The following table summarizes net short volumes associated with the outstanding marketing commodity derivatives not designated as hedging instruments as of December 31:
| 2023 | 2022
Oil commodity contracts |  |
Volume (MMbbl) | (20) |  | (33) |
Natural gas commodity contracts |  |
Volume (Bcf) | (113) |  | (112) |
INTEREST RATE SWAPS Occidental retired all remaining outstanding interest rate swaps in 2022. Occidental's interest rate swap contracts locked in a fixed interest rate in exchange for a floating interest rate indexed to the three-month London Interbank Offered Rate throughout the reference period. Interest rate swaps and collateralization are classified as cash flows from financing activities. FAIR VALUE OF DERIVATIVES Occidental has categorized its assets and liabilities that are measured at fair value in a three-level fair value hierarchy, based on the inputs to the valuation techniques: Level 1 – using quoted prices in active markets for the assets or liabilities; Level 2 – using observable inputs other than quoted prices for the assets or liabilities; and Level 3 – using unobservable inputs. Transfers between levels, if any, are reported at the end of each reporting period. The following table presents the fair values of Occidental’s outstanding derivatives. Fair values are presented at gross amounts below, including when derivatives are subject to netting arrangements, and are presented on a net basis in the Consolidated Balance Sheets.
millions |  | Fair Value Measurements Using |  |  |  | Total Fair Value
Balance Sheet Classification |  | Level 1 |  | Level 2 |  | Level 3 |  | Netting (a) |
December 31, 2023 |  |  |  |  |  |  |  |  |  |
Marketing Derivatives |  |  |  |  |  |  |  |  |  |
Other current assets |  | $ | 1,008 |  |  | $ | 100 |  |  | $ | — |  |  | $ | (1,009) |  |  | $ | 99 |
Long-term receivables and other assets, net |  | 47 |  |  | 1 |  |  | — |  |  | (43) |  |  | 5 |
Accrued liabilities |  | (967) |  |  | (64) |  |  | — |  |  | 1,009 |  |  | (22) |
Deferred credits and other liabilities - other |  | (43) |  |  | (6) |  |  | — |  |  | 43 |  |  | (6) |
December 31, 2022 |  |  |  |  |  |  |  |  |  |
Marketing Derivatives |  |  |  |  |  |  |  |  |  |
Other current assets |  | $ | 920 |  |  | $ | 127 |  |  | $ | — |  |  | $ | (980) |  |  | $ | 67 |
Long-term receivables and other assets, net |  | 1 |  |  | 2 |  |  | — |  |  | (1) |  |  | 2 |
Accrued liabilities |  | (938) |  |  | (96) |  |  | — |  |  | 980 |  |  | (54) |
Deferred credits and other liabilities - other |  | (1) |  |  | (1) |  |  | — |  |  | 2 |  |  | — |
(a)These amounts do not include collateral. Occidental netted $42 million of collateral received with brokers against derivative assets as of December 31, 2023 and $15 million of collateral deposited with brokers against derivative liabilities related to marketing derivatives as of December 31, 2022. GAINS AND LOSSES ON DERIVATIVES The following table presents gains and (losses) related to Occidental’s derivative instruments in the Consolidated Statements of Operations for the years ended December 31:
millions |  |  |  |
Income Statement Classification |  |  |  |  |  | 2023 |  | 2022 |  | 2021
Collars and Calls(a) |  |  |  |  |  |  |  |  |  |
Net sales |  |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | (344) |
Marketing Derivatives |  |  |  |  |  |  |  |  |  |
Net sales (b) |  |  |  |  |  | (74) |  |  | 381 |  |  | 338 |
Interest Rate Swaps |  |  |  |  |  |  |  |  |  |
Gains on interest rate swaps, net (c) |  |  |  |  |  | — |  |  | 317 |  |  | 122 |
(a)All of Occidental’s collars and calls expired on or before December 31, 2021. (b)Includes derivative and non-derivative marketing activity. (c)Occidental retired all remaining outstanding interest rate swaps on or before December 31, 2022. CREDIT RISK The majority of Occidental’s counterparty credit risk is related to the physical delivery of energy commodities to its customers and their inability to meet their settlement commitments. Occidental manages credit risk by selecting counterparties that it believes to be financially strong, by entering into netting arrangements with counterparties and by requiring collateral or other credit risk mitigants, as appropriate. Occidental actively evaluates the creditworthiness of its counterparties, assigns appropriate credit limits and monitors credit exposures against those assigned limits. Occidental also enters into futures contracts through regulated exchanges with select clearinghouses and brokers, which are subject to minimal credit risk, if any.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
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