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RELATED-PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2015
RELATED-PARTY TRANSACTIONS  
RELATED-PARTY TRANSACTIONS

 

NOTE 15    RELATED-PARTY TRANSACTIONS

 

During 2014 and 2013, we entered into the following related-party transactions:

 

 

 

2014

 

2013

 

 

 

(in millions)

 

Sales(a)

 

$
2,706

 

$
4,174

 

Allocated costs for services provided by affiliates

 

$
126

 

$
146

 

Purchases

 

$
175

 

$
164

 

 

(a)

Amounts include related-party sales from our Elk Hills power plant of $89 million and $120 million during 2014 and 2013, respectively.  These sales are included in other revenue in the statements of operations.

 

Through July 2014, substantially all of our products were sold through Occidental’s marketing subsidiaries at market prices and were settled at the time of sale to those entities.  Beginning August 2014, we started marketing our own products directly to third parties.  For the years ended December 31, 2014 and 2013, sales to Occidental subsidiaries accounted for approximately 65% and 97% of our net sales, respectively.

 

The statements of operations for the years ended December 31, 2014 and 2013, include expense allocations for certain corporate functions and centrally-located activities performed by Occidental prior to the Spin-off.  These functions include executive oversight, accounting, treasury, tax, financial reporting, internal audit, legal, risk management, information technology, government relations, public relations, investor relations, human resources, procurement, engineering, drilling, exploration, finance, marketing, ethics and compliance, and certain other shared services.  Charges from Occidental for these services were generally reflected in general and administrative expenses and also include employee-related costs such as salaries, bonuses and stock compensation costs.

 

Purchases from related parties reflected products purchased at market prices from Occidental’s subsidiaries and used in our operations.  These purchases are included in production costs.  There were no related-party receivable or payable balances at December 31, 2015 and 2014.