10-K

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

                                    FORM 10-K
                                                     
[X] Annual Report Pursuant to Section 13 or 15(d)       [ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934                  of the Securities Exchange Act of 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000             FOR THE TRANSITION PERIOD FROM    TO



                          COMMISSION FILE NUMBER 1-9210

                        OCCIDENTAL PETROLEUM CORPORATION
             (Exact name of registrant as specified in its charter)

                                                                 
State or other jurisdiction of incorporation or organization        Delaware
I.R.S. Employer Identification No.                                  95-4035997
Address of principal executive offices                              10889 Wilshire Blvd., Los Angeles, CA
Zip Code                                                            90024
Registrant's telephone number, including area code                  (310) 208-8800



           Securities registered pursuant to Section 12(b) of the Act:

                                                                 
TITLE OF EACH CLASS                                                 NAME OF EACH EXCHANGE ON WHICH REGISTERED
10 1/8% Senior Notes due 2001                                       New York Stock Exchange
10 1/8% Senior Debentures due 2009                                  New York Stock Exchange
9 1/4% Senior Debentures due 2019                                   New York Stock Exchange
Oxy Capital Trust I 8.16% Trust Originated Preferred Securities     New York Stock Exchange
Common Stock                                                        New York Stock Exchange



        Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements the past 90 days.
[X] YES      [ ] NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ ]

The aggregate market value of the voting stock held by nonaffiliates of the
registrant on February 28, 2001, was approximately $8.8 billion, based on the
closing price on the New York Stock Exchange composite tape of $23.99 per share
of Common Stock on February 28, 2001. Shares of Common Stock held by each
executive officer and director have been excluded from this computation in that
such persons may be deemed to be affiliates. This determination of affiliate
status is not a conclusive determination for other purposes.

At February 28, 2001, there were approximately 370,304,584 shares of Common
Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive Proxy Statement, filed in connection
with its April 20, 2001, Annual Meeting of Stockholders, are incorporated by
reference into Part III.



                TABLE OF CONTENTS
                                                                                                      
PART I                                                                                                      Page
ITEMS 1 AND 2   Business and Properties..................................................................   1
                General..................................................................................   1
                Segment Information......................................................................   1
                Oil and Gas Operations...................................................................   1
                Chemical Operations......................................................................   5
                Capital Expenditures.....................................................................   11
                Employees................................................................................   11
                Environmental Regulation.................................................................   11
ITEM 3          Legal Proceedings........................................................................   11
                Environmental Proceedings................................................................   11
ITEM 4          Submission of Matters to a Vote of Security Holders......................................   12
                Executive Officers of the Registrant.....................................................   12

PART II
ITEM 5          Market for Registrant's Common Equity and Related Stockholder Matters....................   13
ITEM 6          Selected Financial Data..................................................................   14
ITEM 7          Management's Discussion and Analysis of Financial Condition and Results of
                Operations (Incorporating Item 7A).......................................................   14
                2000 Business Environment................................................................   14
                Strategic Overview and Review of Business Results - 1998 - 2000..........................   15
                2001 Outlook.............................................................................   19
                Income Summary...........................................................................   19
                Segment Operations.......................................................................   19
                Special Items............................................................................   21
                Consolidated Operations - Revenues.......................................................   21
                Consolidated Operations - Expenses.......................................................   22
                Liquidity and Capital Resources..........................................................   22
                Analysis of Financial Position...........................................................   23
                Acquisitions, Dispositions and Commitments...............................................   25
                Derivative Activities....................................................................   27
                Taxes....................................................................................   28
                Lawsuits, Claims, Commitments, Contingencies and Related Matters.........................   28
                Environmental Expenditures...............................................................   28
                Foreign Investments......................................................................   29
                Accounting Changes.......................................................................   29
                Safe Harbor Statement Regarding Outlook and Other Forward-Looking Data...................   30
                Report of Management.....................................................................   30
ITEM 8          Financial Statements and Supplementary Data..............................................   31
                     Report of Independent Public Accountants............................................   31
                     Consolidated Statements of Operations...............................................   32
                     Consolidated Balance Sheets.........................................................   33
                     Consolidated Statements of Stockholders' Equity.....................................   35
                     Consolidated Statements of Comprehensive Income.....................................   35
                     Consolidated Statements of Cash Flows...............................................   36
                     Notes to Consolidated Financial Statements..........................................   37
                     Quarterly Financial Data (Unaudited)................................................   62
                     Supplemental Oil and Gas Information (Unaudited)....................................   64
                Financial Statement Schedule:
                     Schedule II - Valuation and Qualifying Accounts.....................................   69
ITEM 9          Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.....   70

PART III
ITEM 10         Directors and Executive Officers of the Registrant.......................................   70
ITEM 11         Executive Compensation...................................................................   70
ITEM 12         Security Ownership of Certain Beneficial Owners and Management...........................   70
ITEM 13         Certain Relationships and Related Transactions...........................................   70

PART IV
ITEM 14         Exhibits, Financial Statement Schedules and Reports on Form 8-K..........................   70



                                       ii



PART I
ITEMS 1 AND 2    BUSINESS AND PROPERTIES

GENERAL
     Occidental Petroleum Corporation, a Delaware corporation ("Occidental"),
explores for, develops, produces and markets crude oil and natural gas.
Occidental also manufactures and markets basic chemicals, including chlorine,
caustic soda, and ethylene dichloride ("EDC"), vinyls, including polyvinyl
chloride ("PVC") resins and vinyl chloride monomer ("VCM"), through its 76
percent interest in Oxy Vinyls, LP ("OxyVinyls"), and specialty chemicals.
Occidental conducts its operations through various oil and gas and chemical
subsidiaries and affiliates. Occidental also has an interest in petrochemicals
through its 29.5 percent ownership in Equistar Chemicals, LP ("Equistar").
Occidental's executive offices are located at 10889 Wilshire Boulevard, Los
Angeles, California 90024; telephone (310) 208-8800.

     Effective May 21, 1986, Occidental became the successor to a California
corporation of the same name organized in 1920. As used herein, the term
"Occidental" refers to Occidental alone or together with one or more of its
subsidiaries.

     During 2000, Occidental continued its program to redeploy assets in its
worldwide oil and gas and chemical segments. For additional information
regarding these developments, see the information appearing below under the
captions "Oil and Gas Operations", "Chemical Operations" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
this report below.

  SEGMENT INFORMATION
     Occidental's principal businesses constitute two industry segments, the
operations of which are described below. For information with respect to the
revenues, net income and assets of Occidental's industry segments and of its
operations in various geographic areas for each of the three years in the period
ended December 31, 2000, see Note 16 to the Consolidated Financial Statements of
Occidental ("Consolidated Financial Statements"), which is included in this
report, and the information appearing under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in this report.

OIL AND GAS OPERATIONS
MAJOR ACQUISITIONS AND DISPOSITIONS IN 2000

     On April 18, 2000, Occidental sold its 29.2 percent common stock interest
in Canadian Occidental Petroleum Ltd., now renamed Nexen Inc. ("CanadianOxy" or
"Nexen") to CanadianOxy and the Ontario Teachers' Pension Plan Board for gross
proceeds of approximately $1.2 billion Canadian. In addition, Occidental
acquired CanadianOxy's interest in Occidental's oil producing properties in
Ecuador.

     On April 19, 2000, Occidental completed its acquisition of all of the
common interest in Altura Energy Ltd. from the sellers, BP Amoco plc ("BP") and
Shell Oil Company. Altura Energy Ltd. was renamed Occidental Permian Ltd.
("OPL"), and this business was combined operationally with Occidental's existing
holdings in the Permian Basin of southwest Texas and southeast New Mexico. The
OPL acquisition added over 850 million barrels of proved net oil reserves and
about 142,000 barrels per day of net oil production, both on a BOE basis. In
December, Occidental obtained a low cost source of carbon dioxide for its floods
in the Permian Basin by completing its swap of its Milne Point oil assets in
Alaska for BP's interest in the Bravo Dome CO2 unit in New Mexico.

     On April 24, 2000, Occidental completed the acquisition of ARCO Long Beach
Inc., the owner of the operator of the Long Beach Unit in the Wilmington Field,
California, known as THUMS ("THUMS"), for approximately $68 million in cash. The
acquisition added approximately 95 million barrels of proved net oil reserves
and approximately 25,000 barrels per day of net oil production.

     On August 15, 2000, Occidental completed agreements with respect to two
transactions with Apache Corporation involving Occidental's interests in the
Continental Shelf of the Gulf of Mexico ("GOM").

     On November 1, 2000, Occidental completed a farm-out of a 40 percent
economic interest in Block 15 in Ecuador to Alberta Energy Company Ltd. ("AEC").
AEC will earn its 40 percent interest through the payment of certain capital
costs through 2004 and Occidental will remain the operator.

EXPLORATION AND PRODUCTION
GENERAL
     Through its subsidiaries, Occidental produces or participates in the
production of crude oil, condensate and natural gas in the United States,
Colombia, Ecuador, Oman, Pakistan, Qatar, Russia and Yemen. Occidental is also
conducting exploration and development activities in several of these countries,
as well as in Albania, Indonesia and Peru.

                                       1


COMPARATIVE OIL AND GAS RESERVES AND PRODUCTION
Oil in millions of barrels; natural gas in billions of cubic feet


                                            2000                             1999                             1998
============================  ===============================  ===============================  ===============================
                                 OIL        GAS      TOTAL(a)     OIL        GAS      TOTAL(a)     OIL        GAS      TOTAL(a)
                              ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
                                                                                           
    U.S. Reserves                1,346      2,094      1,695        464      1,806        765        445      1,898         761
    International Reserves         457        116        476        573         86        587        621        251         663
                              ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
        Total                    1,803      2,210      2,171      1,037      1,892      1,352      1,066      2,149       1,424
                              =========  =========  =========  =========  =========  =========  =========  =========  =========

    U.S. Production                 63        241        104         27        242         67         29        224          66
    International Production        62         18         65         85         19         89         88         32          94
                              ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
        Total                      125        259        169        112        261        156        117        256         160
============================  =========  =========  =========  =========  =========  =========  =========  =========  =========

(a)  Natural gas volumes have been converted to equivalent barrels based on
     energy content of 6,000 cubic feet (one thousand cubic feet shall be
     referred to as an "Mcf") of gas to one barrel of oil.

RESERVES
     At December 31, 2000, Occidental's oil and gas reserve base, on a barrels
of oil equivalent ("BOE") basis, was 2.171 billion equivalent barrels, compared
with 1.352 billion equivalent barrels at December 31, 1999. In 2000, Occidental,
excluding the effect of acquisitions and sales, replaced 119 percent of 2000
worldwide combined oil and natural gas production, on a BOE basis, of 169
million barrels. Proved reserve additions from all sources, including the net
effect of acquisitions and property sales, replaced 588 percent of 2000
production. Occidental's consolidated worldwide net proved developed and
undeveloped reserves of crude oil and condensate were 1.803 billion barrels at
year-end 2000, compared with 1.037 billion barrels at year-end 1999. Domestic
reserves of crude oil and condensate increased to 1.346 billion barrels at
year-end 2000, compared with 464 million barrels at year-end 1999, while
international crude oil reserves decreased to 457 million barrels from 573
million barrels at year-end 1999. This calculation of reserve additions does not
take into account dispositions of approximately 183 million barrels of oil
equivalent of proved reserves in Peru, Ecuador and the GOM during 2000.
Worldwide net proved developed and undeveloped reserves of natural gas were
approximately 2.2 trillion cubic feet ("Tcf") at year-end 2000, with 2.1 Tcf
attributable to domestic operations. Worldwide net proved developed and
undeveloped natural gas reserves were about 1.9 Tcf at the end of 1999.

COMPETITION
     As a producer of crude oil and natural gas, Occidental competes with
numerous other producers, as well as with non-petroleum energy producers. Crude
oil and natural gas are commodities that are sensitive to prevailing conditions
of supply and demand and generally are sold at "spot", contract prices or on
exchange traded futures markets. Occidental competes through the cost-efficient
development and production of its worldwide oil and gas reserves and through
acquiring contracts for the exploration of blocks in areas with known oil and
gas deposits. Occidental also pursues opportunities to increase production
through enhanced oil recovery projects and strategic acquisitions. In recent
years, Occidental has focused domestic exploration and development efforts on
core assets in California, the Permian Basin and Hugoton, and has focused its
international exploration and development efforts on core assets in Qatar, Yemen
and Colombia.
     Occidental's oil and gas operations are affected by international, foreign,
federal, state and local laws and regulations relating to, among other things,
increases in taxes and royalties, production limits and environmental matters.
     Portions of Occidental's oil and gas assets outside North America are
exposed to varying degrees of political and economic risk. Occidental conducts
its financial affairs so as to mitigate its exposure against such risks. At
December 31, 2000, the carrying value of Occidental's oil and gas assets in
countries outside North America aggregated approximately $1.7 billion, or
approximately 9 percent of Occidental's total assets at that date. Approximately
$1.2 billion of such assets were located in the Middle East, and approximately
$271 million of such assets were located in Latin America. Substantially all of
the remainder was located in Russia and Pakistan.

OIL AND GAS PRODUCTION AND MARKETING
     Net daily worldwide oil and condensate production in 2000 averaged 343,000
barrels per day, compared with 306,400 barrels per day in 1999, and net
worldwide natural gas production averaged 708 million cubic feet ("MMcf") per
day, compared with 714 MMcf per day in 1999. International operations accounted
for approximately 54 percent of Occidental's oil production, while approximately
93 percent of gas production came from the United States. On a BOE basis,
Occidental produced 461,000 net barrels per day in 2000 from operations in 8
countries, including the United States (but excluding Peru, where producing
operations were sold in 2000).

     In February 1998, Occidental entered into a fifteen-year contract with
Tosco Corporation ("Tosco") through which Tosco purchases the majority of
Occidental's interest in the gross oil production of Elk Hills at market-related
prices.

                                       2


     Net daily domestic oil and condensate production averaged approximately
172,000 barrels in 2000, compared with 72,800 barrels in 1999. The 2000
production is net of approximately 9,000 barrels per day assigned pursuant to a
pre-sale agreement. The main reasons for the increase in domestic oil production
are the OPL and THUMS acquisitions. See "Oil and Gas Operations - Major
Acquisitions and Dispositions in 2000". Net daily domestic production of natural
gas averaged 659 MMcf in 2000, compared with 662 MMcf in 1999.
     Occidental's average sales price for domestic crude oil was $26.66 per
barrel in 2000, compared with $15.81 in the previous year. The average domestic
natural gas sales price in 2000 was $3.66 per Mcf, compared with $2.09 per Mcf
during 1999.
     Set forth below are descriptions of the important production areas for
Occidental. These producing areas are the United States, the Middle East and
Latin America. Following this discussion is a description of other international
operations.

UNITED STATES
     Occidental produces crude oil and natural gas, principally in California,
the Permian Basin and the Hugoton area encompassing portions of Kansas, Oklahoma
and Texas.

     Gross crude oil production at the Elk Hills field in California averaged
approximately 59,000 barrels of oil per day in 2000, including natural gas
liquids production of 12,500 barrels per day, with gas sales averaging
approximately 377 MMcf of gas per day. Occidental is the operator of Elk Hills.
Chevron USA is the other unit interest holder, with an approximate 22 percent
interest.

     The THUMS properties offshore Long Beach, California are currently
averaging about 25,000 net barrels of oil production per day.
     Including the Elk Hills and THUMS producing properties, Occidental has a
very significant acreage position in California, comprising almost 850,000
acres. Additional properties include exploration properties in the southern San
Joaquin valley around Elk Hills and Buena Vista Hills. Occidental also has gas
production in the Sacramento valley.

     Occidental continues to own an interest in the Horn Mountain prospect in
the deepwater GOM, with first production expected in 2002. BP is the operator.

     The Altura properties have been integrated with Occidental's existing
Permian Basin operation so that OPL today operates more than 14,000 wells in
Southwest Texas and Southeast New Mexico. During the fourth quarter of 2000, OPL
combined production averaged 163,000 BOE per day.
     A large number of OPL's fields are CO2 floods, in which CO2 is injected
into worked-over fields as a tertiary recovery technique. These fields account
for approximately 50% of OPL's production. Through injection of CO2, the
recovery of oil and liquids is greatly improved. CO2 flooding is the most common
tertiary enhanced oil recovery flooding method used in light oil reservoirs. In
this process, CO2 acts as a solvent to overcome forces that trap oil within the
rock matrix, helping sweep the immobile oil remaining after primary or secondary
recovery. Soluble in crude oil at higher pressure, CO2 swells the oil, thereby
reducing viscosity and making it more mobile. Rock and fluid characteristics for
most reservoirs in the Permian Basin make them ideal targets for CO2 projects.
     Occidental has recently added to its Permian portfolio BP's 75 percent
working interest in the Bravo Dome CO2 Unit in northern New Mexico, which
encompasses 910,000 net acres and has gross CO2 production of 315 MMcf per day.

     Occidental owns a large concentration of gas reserves, production and
royalty interests in the Hugoton area. Net production from these fields during
2000 averaged 168 MMcf of gas per day or approximately one-fourth of the
domestic total. Occidental has approximately 701 billion cubic feet of gas
reserves and 9 million barrels of oil reserves in the Hugoton area.
     Occidental has various agreements to supply certain gas marketing companies
with volumes ranging from 38,100 million British thermal units ("MMBtu") down to
1,482 MMBtu per day from 2001 through 2010. Prices under the different
agreements are based on market-sensitive prices, contract prices, or energy
equivalent crude oil prices, some with a yearly escalation provision.

MIDDLE EAST
     Occidental has implemented a development plan to increase production and
reserves from the Idd el Shargi North Dome field ("ISND") in Qatar. Occidental
is the operator of the field and is completing development of the field's three
main reservoirs. Gross production in 2000 averaged approximately 95,000 barrels
per day under OPEC quotas, compared with approximately 98,300 barrels per day
for 1999. Occidental has also entered a production sharing agreement to develop
and operate, as a satellite, the Idd el Shargi South Dome field ("ISSD"), 15
miles south of the ISND field. Production began in the fourth quarter of 1999
and has increased from under 2,000 gross barrels of oil per day at the end of
1999 to over 10,000 gross barrels per day at the end of 2000. Average net
production from the combined assets (ISND and ISSD) decreased to 49,000 gross
barrels per day from 57,800 barrels per day in 1999. As is expected with a
production sharing arrangement, Occidental's contractual share of production
fluctuates as the market price of the crude oil changes, decreasing as the
market price of crude oil goes up and increasing as the market price goes down.
     Net proved developed and undeveloped reserves for ISND are presently
estimated by Occidental to be approximately 131 million barrels, compared with
140 million barrels at December 31, 1999. Net proved developed and undeveloped
reserves for ISSD are presently estimated by Occidental to be approximately 23
million barrels, compared with 24 million barrels at the end of 1999. Each year
reserve estimates are based

                                       3


on Occidental's estimated percentage share of remaining production from the
field pursuant to the terms of the applicable production sharing agreement.

     Occidental owns a 38 percent working interest in the 310,000 acre Masila
Block in Yemen. Occidental's net share under the Masila production-sharing
contract was 27,000 barrels per day in 2000, compared to 30,000 barrels per day
in 1999. The decrease in net production in 2000 was due to the increase in
market prices for crude oil, as the contractual net share of production is
inversely related to such prices. The impact of higher prices on net share more
than offsets the higher share entitlement resulting from increases in gross
production in Masila to 217,000 barrels per day in 2000 from 209,000 barrels per
day in 1999.

     Occidental also owns a 28.6 percent working interest in the East Shabwa
Block. Occidental's net share under the East Shabwa production sharing contract
averaged 5,000 barrels per day in 2000, compared to 1,850 barrels per day in
1999.

     In Yemen, Occidental has added new exploration blocks that complement the
existing production operations in Masila and East Shabwa. Occidental recently
announced exploration activity in four northern border blocks adjacent to Saudi
Arabia and Block 20 in the west central part of the country. In addition,
Occidental recently signed production sharing agreements for Block 44 (70
percent participating interest), located just to the north of Masila in the
Suyun-Masila Basin, and Block 59 (40 percent participating interest) along the
Yemen-Saudi border in northern Yemen. Both of these production sharing
agreements are awaiting government ratification, which is expected shortly.

     In Oman, Occidental is the operator, with a 65 percent working interest, of
Block 9, which contains the Safah field and six small fields along the southern
border of the block. Occidental's net share of production from the block in 2000
averaged approximately 9,000 barrels per day of crude oil, compared with 14,650
barrels per day in 1999. As with Occidental's properties in Qatar and Yemen, the
contractual net share of production fluctuates inversely with the market prices
of oil. Occidental is also pursuing exploration opportunities in Block 27.

LATIN AMERICA
     Occidental conducts exploration and production operations in Colombia under
contracts with Ecopetrol, the Colombian national oil company. These contracts
cover the producing Cano Limon area in the Llanos region of northeastern
Colombia, one exploration area in the Llanos fold belt and an exploration area
in the Llanos Foreland. After giving effect to a government royalty,
Occidental's net share of existing production is 35 percent. All of Occidental's
share of production is exported through a trans-Andean pipeline system operated
by Ecopetrol that carries crude oil to an export terminal at Covenas. Occidental
has an approximate 44 percent ownership interest in the pipeline and marine
terminal, both of which are operated by Ecopetrol. Gross production from
Occidental's Cano Limon area declined to approximately 93,000 barrels per day in
2000, compared with 125,000 barrels per day in 1999. The reduction is due
primarily to a natural decline and to pipeline disruptions stemming from
insurgent activity. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations." Occidental's net share of production
decreased to 32,000 barrels per day in 2000, compared with 43,300 barrels per
day in 1999, reflecting the lower gross production.

     Occidental obtained exploration and exploitation rights to the Siriri
(formerly Samore) block in 1992, and is the operator and would have an
approximate 33 percent net working interest after determination of
commerciality. As a result of concerns raised by a tribe of indigenous people
called the U'wa, Occidental voluntarily relinquished the southern 75 percent of
the block in 1998. The Colombian government more than tripled the size of the
U'wa reservation. The U'wa, who number approximately 4,000 people, now control a
territory that is 70 percent of the size of Rhode Island. Occidental's drilling
operations are outside the revised U'wa reservation. A Colombian government
commission, including a representative of the U'wa, inspected Occidental's drill
site and issued a report that concluded that Occidental is in full compliance
with all regulations and requirements specified in its environmental license.
Drilling began in the Siriri block in November 2000 and was in progress at
year-end. Occidental expects to complete drilling of the Gibraltar exploration
well later this year.

     In Ecuador, Occidental operates the 494,000 acre Block 15, in the Oriente
Basin, under a production sharing agreement, converted in 1999 from a
risk-service contract. Six oil fields were discovered from 1985 to 1992. Net
production was approximately 17,000 barrels per day in 2000, compared with net
production of approximately 15,300 barrels per day in 1999. Occidental acquired
an additional 15 percent interest from Nexen early in 2000, and farmed out a 40
percent economic interest to AEC in November 2000.

     Both Occidental and AEC are members of a consortium of producers that have
formed an independent pipeline company to build a new heavy oil pipeline in
Ecuador. Ecuador is currently pipeline-capacity constrained, so the new pipeline
is expected to foster oil development. The independent pipeline company has
signed an agreement with the government to build a 500-kilometer pipeline from
the interior Oriente Basin to the coast of Ecuador over a two-year period. The
pipeline is expected to make it feasible for Occidental to develop the
potentially significant Eden Yuturi field it discovered several years ago in the
southeastern edge of Block 15.

                                       4


OTHER INTERNATIONAL OPERATIONS
     Occidental also has important oil and gas exploration and production assets
in other areas of the world. Set forth below are descriptions of Occidental's
properties in Pakistan, Russia and Indonesia.

EXPLORATION
     In addition to the exploration activities described above, Occidental is
also engaged in active exploration in Albania, Peru and Indonesia.
     In Indonesia, Occidental has a 22.9 percent interest in the Berau Block,
offshore Irian Jaya, where five major natural gas discoveries have been made by
Occidental and BP, the operator. The Berau Block discoveries, together with BP's
Wiriagar Block discovery, are expected to contain sufficient natural gas to
justify construction of a multi-train liquid natural gas ("LNG") project slated
for start-up in the next several years. Certain fields in the Berau and Wiriagar
Blocks, together with the Muturi Block operated by British Gas, are expected to
be unitized before project approval, and Occidental expects to own an
approximate 16 percent interest in the overall project. The partners in this
project, led by Pertamina, the Indonesian national oil company, are seeking
buyers for the LNG. This project will involve significant expenditures and
several years will be required to complete project development.
     In addition, Occidental holds exploration rights in the Central Indus Gas
Basin of southern Pakistan totaling 2.9 million acres, and contiguous to the
producing property described below.

PRODUCTION
     In southern Pakistan, Occidental has working interests in the three Badin
Blocks, which vary from 25 to 30 percent. In 2000, the blocks produced a net
share of 6,000 barrels of oil per day and 49 MMcf of gas per day, compared to
5,700 barrels of oil per day and 45 MMcf of gas per day in 1999. Development
drilling should help maintain production at current rates.

     In Russia, Occidental owns a 50 percent interest in a joint venture
company, Vanyoganneft, in the western Siberian oil basin. During 2000, gross
production averaged 54,000 barrels per day, which was approximately the same
level of production as in 1999. Approximately 44 percent of Occidental's share
of the oil was exported in 2000.

RESERVES, PRODUCTION AND RELATED INFORMATION
     See Note 17 to the Consolidated Financial Statements and the information
under the caption "Supplemental Oil and Gas Information" in Item 8 of this
report for information with respect to Occidental's oil and gas reserves, the
production from and other changes in such reserves, the discounted present value
of estimated future net cash flows therefrom, certain costs and other financial
and statistical information regarding Occidental's oil and gas exploration and
production operations. Estimates of reserves have been made by Occidental
engineers and include reserves under which Occidental holds an economic interest
under service contracts and other arrangements. Occidental's crude oil reserves
include natural gas liquids and condensate. The reserves are stated after
applicable royalties. The definitions used are in accordance with applicable
Securities and Exchange Commission regulations. Accordingly, proved oil and gas
reserves are those estimated quantities of crude oil, natural gas and natural
gas liquids that geological and engineering data demonstrate with reasonable
certainty will be recoverable in future years from known reservoirs under
existing economic and operating conditions. Proved developed oil and gas
reserves are reserves that can be expected to be recovered through existing
wells with existing equipment and operating methods. Unless otherwise stated,
all references to reserves are made on a net basis. On May 8, 2000, Occidental
reported to the U.S. Department of Energy on Form EIA-28 proved oil and gas
reserves at December 31, 1999.

CHEMICAL OPERATIONS
GENERAL
     Occidental conducts its chemical operations through Occidental Chemical
Corporation and its various subsidiaries and affiliates (collectively,
"OxyChem"). OxyChem is a chemical manufacturer, with interests in basic
chemicals, vinyls, petrochemicals and specialty chemicals. OxyChem owns its
interest in petrochemicals through its Equistar investment. OxyChem's operations
are affected by cyclical economic factors and by specific chemical industry
conditions.
     OxyChem's products are commodity in nature. They are equivalent to products
manufactured by others that are generally available in the marketplace and are
produced and sold in large volumes to industrial customers for use as raw
materials. Many of OxyChem's products are both sold to others and further
processed by OxyChem into other chemical products. OxyChem's operations are
affected by environmental regulation and associated costs. See the information
appearing under the caption "Environmental Expenditures" in this report.

ALLIANCES AND STRATEGIC DEVELOPMENTS
     In 1998, Occidental acquired an interest in Equistar, a petrochemical
partnership. Lyondell Chemical Company owns 41 percent of Equistar, while
Millennium Chemicals, Inc. and Occidental Petroleum Corporation each own 29.5
percent. Equistar is one of the largest producers of ethylene, propylene and
polyethylene in the world today with an annual capacity of more than 11 billion
pounds of ethylene and more than six billion pounds of polyethylene. Its
principal worldwide competition includes Exxon Mobil Chemical Company, Dow
Chemical Company and Shell. Equistar is the second largest producer of ethylene
in North America. Headquartered in Houston, Equistar has 17 manufacturing
facilities along the United States Gulf Coast and in the Midwest, including an
approximate 1,400 mile ethylene/propylene distribution system which spans the
Texas Gulf Coast.

                                       5


     Equistar supplies the ethylene requirements (up to 2.55 billion pounds per
year) for OxyChem's chlor-alkali business and OxyVinyls' business.

     OxyChem and The Geon Company, now known as PolyOne Corporation ("PolyOne"),
formed the OxyVinyls partnership, combining the commodity PVC resin and VCM
assets of both companies, and two chlor-alkali and co-generation plants of
OxyChem. Ownership is shared between OxyChem and PolyOne on a 76 percent and 24
percent basis, respectively. The partners also formed a smaller partnership, PVC
Powder Blends, LP, a powder compounding business in which OxyChem owns a 10
percent interest.

     OxyVinyls has annual capacities of 4.4 billion pounds of PVC resin, 4.8
billion pounds of VCM and 0.9 million tons of chlor-alkali electrochemical
units. Because chlorine and caustic soda are co-products, the chemical industry
uses electrochemical units as a standard metric corresponding to one ton of
chlorine and approximately 1.1 tons of caustic soda. The manufacturing plants of
OxyVinyls are described on page 9.

     In connection with the sale of CanadianOxy shares in April 2000, Occidental
transferred to CanadianOxy its interest in two sodium chlorate chemicals
partnerships controlled by CanadianOxy.

     In June of 2000, OxyChem announced its decision to withdraw from several of
its chemical intermediates businesses principally located in Niagara Falls, NY
and Ashtabula, Ohio. Most of the Niagara Falls production units have been shut
down and discussions are underway concerning the sale or disposal of these
assets and the remaining chemical intermediates businesses. As part of the
initiative, OxyChem sold its Chlorowax(R) chlorinated paraffins business in
October 2000.

     Effective July 14, 2000, OxyChem sold its 45 percent interest in Aqua
Clear, a manufacturer and re-packager of water treatment chemicals for swimming
pools, to a subsidiary of Great Lakes Chemical.

     Effective October 31, 2000, OxyChem sold its interest in the Durez phenolic
resins and compound business to its joint venture partner Sumitomo Bakelite Co.
Ltd. Operations sold included the following plant properties: Niagara Falls, New
York; Kenton, Ohio; Fort Erie, Ontario, Canada; and Genk, Belgium. In addition,
OxyChem sold its share in joint ventures in Canada, Japan, Singapore and
Indonesia.

     On November 29, 2000, an OxyChem subsidiary purchased a 28.6 percent
interest in OxyMar (representing .7 billion pounds of VCM capacity), a Texas
general partnership that owns the Ingleside, Texas VCM facility operated by
OxyChem. The interest was purchased from U.S. VCM Corporation, an affiliate of
Marubeni Corporation, which continues to own a 21.4 percent interest and remains
a 50 percent partner for corporate governance purposes. OxyVinyls owns the
remaining 50 percent interest.

BASIC CHEMICALS
     OxyChem's basic chemicals group manufactures and markets inorganic
chemicals, including high-volume commodity products. Chlorine and caustic soda
are supplied to a large list of manufacturers, including those in the pulp and
paper, plastics, water-purification, bleach and sanitation industries. Major EDC
plants at Corpus Christi, Texas, and Convent, Louisiana, use part of the
chlorine production from OxyChem's adjacent chlor-alkali facilities and ethylene
from Equistar's nearby olefins plants. The principal manufacturing plants of
basic chemicals are described in the chart below. EDC is used primarily in
making VCM, the raw material used in the production of PVC. Potassium hydroxide,
or caustic potash, is used by fertilizer, soap and detergent and rubber
manufacturers. It also is used by an OxyChem joint venture with Church & Dwight
Co., Inc. to produce potassium carbonate.

SPECIALTY CHEMICALS
     OxyChem produces organic and inorganic compounds, intermediate chemicals
and chlorinated isocyanurates, as well as certain specialty resins and PVC film
products that were not contributed to the commodity business of OxyVinyls.
Specialty performance chemicals are produced for the plastics, metal-plating,
wood, water sanitation and food-service industries. In addition, OxyChem's
performance chemical products business and Occidental's INDSPEC Holding
Corporation ("INDSPEC") subsidiary focus on smaller-volume specialty and
intermediate chemical markets. INDSPEC is a leading manufacturer of resorcinol.
Resorcinol is a binding agent principally used in tires and as a flame
retardant.

                                       6


PRINCIPAL PRODUCTS
OxyChem produces the following chemical products:

                                                                  
                        Principal Products                              Major Uses
                        ---------------------------------------------   ---------------------------------------------------------
Basic Chemicals         Chlor-alkali chemicals:
                           Chlorine                                     Raw material for vinyl chloride monomer, chemical
                                                                        manufacturing, pulp and paper production, water treatment

                           Caustic soda                                 Chemical manufacturing, pulp and paper production,
                                                                        cleaning products

                           Potassium chemicals                          Glass, fertilizers, cleaning products and rubber
                           (including potassium hydroxide and,
                           through its Armand Products joint
                           venture with Church & Dwight,
                           potassium carbonate)
                        ---------------------------------------------   ---------------------------------------------------------
                        Ethylene dichloride ("EDC")                     Raw material for vinyl chloride monomer
                        ---------------------------------------------   ---------------------------------------------------------
Specialty Chemicals     Sodium silicates                                Soaps and detergents, catalysts, paint pigments
                        ---------------------------------------------   ---------------------------------------------------------
                        Chrome chemicals                                Metal and wood treatments, leather tanning
                        ---------------------------------------------   ---------------------------------------------------------
                        Chlorinated isocyanurates                       Swimming pool, household and industrial disinfecting
                                                                        and sanitizing products
                        ---------------------------------------------   ---------------------------------------------------------
                        Polyvinyl chloride ("PVC") resin and films      Resins for flooring, medical gloves and other flexible
                                                                        vinyl applications. Calendered films for automotive,
                                                                        packaging, and consumer products
                        ---------------------------------------------   ---------------------------------------------------------
                        Mercaptans                                      Warning agents for natural gas and propane and raw
                                                                        material for agricultural chemical intermediates
                        ---------------------------------------------   ---------------------------------------------------------
                        Antimony oxide                                  Flame retardant synergist and catalysts
                        ---------------------------------------------   ---------------------------------------------------------
                        Resorcinol                                      Tire manufacture, wood adhesives and flame retardant
                                                                        synergist
                        ---------------------------------------------   ---------------------------------------------------------
Vinyls (through         Vinyl chloride monomer ("VCM")                  Raw material for polyvinyl chloride
   its 76 percent
   interest in
   OxyVinyls)
                        ---------------------------------------------   ---------------------------------------------------------
                        Polyvinyl chloride resin                        PVC pipe for municipal, plumbing and electrical uses.
                                                                        External construction materials such as window and door
                                                                        profiles, fencing, and decking. Flooring, medical and
                                                                        automotive products, wire and cable insulation, and
                                                                        packaging.
                        ---------------------------------------------   ---------------------------------------------------------
Petrochemicals          Ethylene                                        Raw material for production of polyethylene, EDC
   (through its                                                         (precursor to VCM) and for ethylene oxide and ethylene
   29.5 percent                                                         oxide derivatives such as ethylene glycols
   interest in
   Equistar)
                        ---------------------------------------------   ---------------------------------------------------------
                        Benzene                                         Raw material for production of styrene, phenolic
                                                                        polymers and nylon
                        ---------------------------------------------   ---------------------------------------------------------
                        Propylene                                       Raw material for production of polypropylene and
                                                                        acrylonitrile
                        ---------------------------------------------   ---------------------------------------------------------
                        Ethylene glycols, ethylene oxide and            Polyester products, antifreeze and brake fluids
                        ethylene oxide derivatives
                        ---------------------------------------------   ---------------------------------------------------------
                        Polyethylene                                    Grocery and trash bags, food packaging films, plastic
                                                                        bottles and containers
                        ---------------------------------------------   ---------------------------------------------------------
                        Polypropylene                                   Carpet fibers, injection molding applications
                        ---------------------------------------------   ---------------------------------------------------------


                                       7


     Based on internal market assessments, including reviews of statistics in
chemical industry publications, Occidental believes that during 2000, it was the
largest merchant marketer of chlorine and caustic soda and the largest producer
of chrome chemicals in North America. Through its 76 percent interest in
OxyVinyls, Occidental is the largest producer of PVC resins and the
second-largest producer of VCM in North America, and, through its 29.5 percent
interest in Equistar, Occidental is North America's second largest producer of
ethylene. In addition, based on these assessments, Occidental believes that it
is the world's largest producer of potassium hydroxide, chlorinated isocyanurate
products and resorcinol, the world's largest marketer of EDC, the second-largest
producer of antimony oxide, the third-largest producer of mercaptan warning
agents, and the second-largest producer of sodium silicates in North America.

RAW MATERIALS
     Nearly all raw materials utilized in OxyChem's operations are readily
available from a variety of sources. Most of OxyChem's key raw materials
purchases are made through both short and long-term contracts. OxyChem is not
dependent on any single nonaffiliated supplier for a material amount of its raw
material or energy requirements. Although earnings have been adversely affected
by higher natural gas, electricity and feedstock prices for most of the past
year, operations have not been curtailed as a result of any supply
interruptions.

PATENTS, TRADEMARKS AND PROCESSES
     OxyChem owns and licenses a large number of patents and trademarks and uses
a variety of processes in connection with its operations, some of which are
proprietary and some of which are licensed. OxyChem does not regard its business
as being materially dependent on any single patent or trademark it owns or
licenses or any process it uses.

SALES AND MARKETING
     OxyChem's products are sold to industrial users or distributors located in
the United States, largely by its own sales force. OxyChem sells its products
principally at current market or current market-related prices through both
short and long-term sales agreements. Except for sales in the export market,
OxyChem generally does not use spot markets to sell products.
     No significant portion of OxyChem's business is dependent on a single
customer. However, Occidental has entered into significant supply arrangements
with certain of its affiliates. In 2000, PolyOne purchased goods and services
(principally pursuant to PVC resin and VCM sale contracts at market-related
prices) from OxyVinyls valued at in excess of $300 million. Consequently,
changes in demand by PolyOne will impact OxyVinyls. In addition, OxyChem and
OxyVinyls purchased ethylene at market-related prices from Equistar pursuant to
a sales contract valued at approximately $630 million in 2000. Finally, OxyMar,
which is owned in part by OxyChem and OxyVinyls, sold VCM resin at
market-related prices valued at approximately $300 million to Occidental
affiliates in 2000. In general, OxyChem does not manufacture its products
against a backlog of firm orders.

COMPETITION
     The chemical business is very competitive. Since most of OxyChem's products
are commodity in nature, they compete primarily on the basis of price, quality
characteristics and timely delivery. Because OxyChem's products generally do not
occupy proprietary positions, OxyChem endeavors to be an efficient, low-cost
producer through the employment of modern, high-yield plants, equipment and
technology. OxyChem's size and the number and location of its plants also
produce competitive advantages, principally in its ability to meet customer
specifications and delivery requirements.

PROPERTIES
     As of December 31, 2000, OxyChem, which is headquartered in Dallas, Texas,
operated 28 chemical product-manufacturing facilities in the United States. Many
of the larger facilities are located in the Gulf Coast areas of Texas and
Louisiana. In addition, OxyChem operates eight chemical product-manufacturing
facilities in four foreign countries; its largest investment is in Brazil. A
number of additional facilities process, blend and store the chemical products.
OxyChem owns or leases an extensive fleet of railroad cars.
     All of OxyChem's manufacturing facilities are owned, except for a portion
of OxyVinyls' plant at La Porte, Texas, which is leased on a long-term basis.
The charts below list the principal facilities and plant capacities of the basic
chemicals group, specialty chemicals group and OxyVinyls.

                                       8


BASIC AND OXYVINYLS
Principal Products and U.S. Production Capacities at December 31, 2000(a)



                                             Chlorine             Caustic Soda           Caustic Potash                      EDC
Plants                                         (Tons)                   (Tons)                   (Tons)     (millions of pounds)
- ----------------------------   ----------------------   ----------------------   ----------------------   ----------------------
                                                                                              
BASIC
- -----
Mobile, Alabama                                48,000                                            75,000
Muscle Shoals, Alabama                        151,000                                           238,000
Delaware City, Delaware                       146,000                  123,000                  110,000
Convent, Louisiana                            389,000                  435,000                                             1,500
Taft, Louisiana                               750,000                  861,000
Niagara Falls, New York                       335,000                  371,000
Ingleside, Texas (b)                          604,000                  676,000                                             1,500
- ----------------------------   ----------------------   ----------------------   ----------------------   ----------------------
Total                                       2,423,000                2,466,000                  423,000                    3,000
============================   ======================   ======================   ======================   ======================

(a)  All of the volumes listed in the table above are based on estimated
     capacities only. Actual results of production may differ materially from
     capacities listed.
(b)  Plant assets also comprise an interest in an electric power co-generation
     facility.



                                             Chlorine             Caustic Soda                      VCM               PVC Resins
Plants                                         (Tons)                   (Tons)     (millions of pounds)     (millions of pounds)
- ----------------------------   ----------------------   ----------------------   ----------------------   ----------------------
                                                                                              
OXYVINYLS
- ---------
Louisville, Kentucky                                                                                                         585
Pedricktown, New Jersey                                                                                                      360
Deer Park, Texas (b)                          377,000                  422,000                    1,275                      555
Ingleside, Texas (c)                                                                              2,300
LaPorte, Texas (b)                            525,000                  589,000                    2,400
Pasadena, Texas                                                                                                            2,020
- ----------------------------   ----------------------   ----------------------   ----------------------   ----------------------
Total                                         902,000                1,011,000                    5,975                    3,520
============================   ======================   ======================   ======================   ======================

(a)  All of the volumes listed in the table above are based on estimated
     capacities only. Actual results of production may differ materially from
     capacities listed.
(b)  Plant assets also comprise an electric power co-generation facility.
(c)  OxyMar owns plant (78.6% with OxyChem affiliates; 21.4% with Marubeni
     affiliate).

                                       9


SPECIALTY CHEMICALS
Principal Products and U.S. Production Capacities(a)



Plants                                                                         Product         Capacity(a) Volumes
- ----------------------------------------------------------   -------------------------   -------------------------
                                                                                   
ACL; Illinois and Louisiana                                  Chlorinated Isocyanurates                  122 mm lbs
Chrome; North Carolina                                                    Chromic Acid                 47,000 tons
Chrome, North Carolina                                               Sodium Bichromate                114,000 tons
INDSPEC; Pennsylvania                                                       Resorcinol                   52 mm lbs
Laurel Industries; Texas                                                Antimony Oxide                   33 mm lbs
Natural Gas Odorizing; Texas                                                Mercaptans                   20 mm lbs
PVC; Pennsylvania                                                           PVC Resins                  213 mm lbs
Silicates; Georgia/Ohio/Texas/Illinois/New Jersey/Alabama             Sodium Silicates                730,000 tons
- ----------------------------------------------------------   -------------------------   -------------------------

(a)  All of the volumes listed in the table above are based on estimated
     capacities only. Actual results of production may differ materially from
     capacities listed.

INTERNATIONAL
Principal Products (in metric tons) and Production Capacities(a)



                                                                                                           Basic
                                          % Oxy                    Caustic                                 Chrome       PVC
Country      Location                   Ownership     Chlorine       Soda      Vinyl Film       EDC        Sulfate     Resins
- ----------   ------------------------   ----------   ----------   ----------   ----------   ----------   ----------  ---------
                                                                                             
Brazil       Cubatao                           50%      253,000      284,000                   144,000
Brazil       Rio de Janeiro                   100%                                 34,000
Canada       Niagara Falls, Ontario            76%                                                                     256,000
Canada       Scotford, Alberta                 76%                                                                     154,000
Chile        Talcahuano                       100%       52,000       59,000
Thailand     Bangkok (b)                       49%       46,000       52,000                                 12,000
Thailand     Rayong                            49%                                                                      25,000
- --------------------------------------------------   ----------   ----------   ----------   ----------   ----------  ---------
Total                                                   351,000      395,000       34,000      144,000       12,000    435,000
==================================================   ==========   ==========   ==========   ==========   ==========  =========

(a)  All of the volumes listed in the table above are based on estimated
     capacities only. Actual results of production may differ materially from
     capacities listed.
(b)  The facilities in Bangkok comprise two separate and distinct plants.

                                       10


CAPITAL EXPENDITURES
     Occidental's oil and gas operations, based on depletable resources, are
capital intensive, involving large-scale expenditures. In particular, in the
search for and development of new reserves, long lead times are often required.
In addition, Occidental's oil and gas and chemical businesses require capital
expenditures to remain competitive and to comply with safety and environmental
laws. Occidental's capital expenditures for its ongoing businesses totaled
approximately $952 million in 2000, $601 million in 1999, and $1.074 billion in
1998, exclusive of the acquisition cost of Elk Hills, OPL, THUMS and the noncash
consideration for other acquisitions. The 2000 amount included capital
expenditures aggregating $791 million for oil and gas, $155 million for chemical
and $6 million for corporate and other. Occidental's total capital expenditures,
exclusive of acquisitions, if any, for 2001 are expected to approximate $1.1
billion, with $1 billion allocated to oil and gas operations and $100 million to
chemical operations.

EMPLOYEES
     Occidental and its subsidiaries employed 8,791 people at December 31, 2000,
of whom 6,761 were located in the United States. Occidental employed 2,494
persons in oil and gas operations and 5,355 persons in chemical operations. An
additional 269 people were employed at corporate headquarters and 99 at other
Occidental subsidiaries. In addition, 574 people were employed by Oxy Services,
Inc., Occidental's shared services subsidiary, and are currently based primarily
in Dallas, Houston and Los Angeles. Approximately 771 U.S. based employees are
represented by labor unions.
     Occidental has a long-standing policy to ensure that fair and equal
employment opportunities are extended to all persons without regard to race,
color, religion, ethnicity, gender, national origin, disability, age, sexual
orientation, veteran status or any other legally impermissible factor.
Occidental maintains diversity and outreach programs.

ENVIRONMENTAL REGULATION
     Occidental's operations in the United States are subject to stringent
federal, state and local laws and regulations relating to improving or
maintaining the quality of the environment. Foreign operations are also subject
to environmental protection laws. Applicable U.S. laws include the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), as amended by
the Superfund Amendments and Reauthorization Act ("Superfund"), the Resource
Conservation and Recovery Act, as amended by the Hazardous and Solid Waste
Amendments, the Clean Air Act, the Federal Water Pollution Control Act, and
similar state environmental laws. The laws that require or address environmental
remediation may apply retroactively to previous waste disposal practices and, in
many cases, the laws apply regardless of fault, legality of the original
activities or ownership or control of sites. Occidental and certain of its
subsidiaries are currently participating in environmental assessments and
cleanups under these laws at federal Superfund sites, comparable state sites and
other remediation sites, including Occidental facilities and previously owned
sites. Also, Occidental and certain of its subsidiaries have been involved in a
substantial number of governmental and private proceedings involving historical
practices at various sites, including, in some instances, having been named as
defendants, as potentially responsible parties ("PRPs"), or as both defendants
and PRPs under the federal Superfund law. These proceedings seek remediation,
funding for remediation, or both, and, in some cases, compensation for alleged
personal injury or property damage, punitive damages and civil penalties,
aggregating substantial amounts.
     Occidental has accrued reserves for its environmental liabilities. As of
December 31, 2000 and 1999, Occidental had environmental reserves of
approximately $402 million and $454 million, respectively. Occidental made no
provision for additional environmental reserves in 1998 or 1999, but in 2000
made a provision for reserves of $23 million in respect of the OPL acquisition.
     Occidental's estimated operating expenses in 2000 relating to compliance
with environmental laws and regulations governing ongoing operations were
approximately $74 million, compared with $64 million in 1999 and $70 million in
1998. In addition, capital expenditures for environmental compliance were $38
million in 2000, compared with $36 million in 1999 and $56 million in 1998. The
2000 amount included $20 million in the oil and gas division and $18 million in
the chemical division. Occidental presently estimates that divisional capital
expenditures for environmental compliance (including environmental control
facilities) will be in the range of $40 million for each of 2001 and 2002.

ITEM 3    LEGAL PROCEEDINGS
     Incorporated by reference herein is information regarding lawsuits, claims,
commitments, contingencies and related matters in Note 9 to the Consolidated
Financial Statements.

ENVIRONMENTAL PROCEEDINGS
     In April 1998, a civil action was filed on behalf of the U.S. Environmental
Protection Agency against OxyChem relating to the Centre County Kepone Superfund
Site at State College, Pennsylvania. The lawsuit seeks approximately $12 million
in penalties and governmental response costs, a declaratory judgment that
OxyChem is a liable party under CERCLA, and an order requiring OxyChem to carry
out the remedy that is being performed by the site owner. In October 1998, the
U.S. District Court for the Middle District of Pennsylvania granted OxyChem's
motion to dismiss the United States' case. In December 1999, the United States
Court of Appeals for the Third Circuit reversed the dismissal and remanded the
case to the District Court. OxyChem is vigorously contesting the United States'
allegations and the proposed penalty.

                                       11


ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
     No matters were submitted to a vote of Occidental's security holders during
the fourth quarter of 2000.

EXECUTIVE OFFICERS OF THE REGISTRANT



                            Age at
                            February 28,
Name                        2001           Positions with Occidental and Subsidiaries and Five-Year Employment History
- -------------------------   ------------   -------------------------------------------------------------------------------
                                     
Dr. Ray R. Irani            66             Chairman of the Board of Directors and Chief Executive Officer since 1990;
                                           President from 1984 to 1996; Chief Operating Officer from 1984-1990; Director
                                           since 1984; member of Executive Committee.
Dr. Dale R. Laurance        55             President since 1996; Chairman and Chief Executive Officer of Occidental Oil and
                                           Gas Corporation since 1999; 1990-1996, Executive Vice President and Senior
                                           Operating Officer; 1984-1990, Executive Vice President -- Operations; Director
                                           since 1990; member of Executive Committee.
Stephen I. Chazen           54             Chief Financial Officer and Executive Vice President -- Corporate Development
                                           since 1999; 1994-1999, Executive Vice President -- Corporate Development.
Donald P. de Brier          60             Executive Vice President, General Counsel and Secretary since 1993.
Richard W. Hallock          56             Executive Vice President -- Human Resources since 1994.
J. Roger Hirl               69             Executive Vice President since 1984; Director since 1988; President and Chief
                                           Executive Officer of Occidental Chemical Corporation since 1991.
John W. Morgan              47             Executive Vice President -- Operations since 1998; 1991-1998, Vice President --
                                           Operations.
Howard Collins              57             Vice President -- Public Relations since 1993.
Samuel  P.  Dominick, Jr.   60             Vice President and Controller since 1991.
James R. Havert             59             Vice President and Treasurer since 1998; 1992-1998, Senior Assistant Treasurer.
Kenneth J. Huffman          56             Vice President -- Investor Relations since 1991.
Anthony R. Leach            61             Vice President Finance since 1999; 1991-1999, Executive Vice President and Chief
                                           Financial Officer.
Robert M. McGee             54             Vice President since 1994; President of Occidental International Corporation
                                           since 1991.
Lawrence P. Meriage         58             Vice President -- Communications and Public Affairs since 2000; 1995-2000, Vice
                                           President -- Executive Services and Public Affairs of Occidental Oil and Gas
                                           Corporation.
Richard A. Swan             53             Vice President -- Health, Environment and Safety since 1995; 1991-1995, Director --
                                           Investor Relations.
Aurmond  A.  Watkins, Jr.   58             Vice President -- Tax since 1991.


The current term of office of each Executive Officer will expire at the April
19, 2001, organizational meeting of the Occidental Board of Directors or at such
time as his successor shall be elected.

                                       12


PART II
ITEM 5    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

TRADING PRICE RANGE AND DIVIDENDS
     There is hereby incorporated by reference the quarterly financial data
appearing under the caption "Quarterly Financial Data" and the information
appearing under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources" in this
report. Occidental's common stock was held by approximately 74,175 stockholders
of record at December 31, 2000, with an estimated 133,000 additional
stockholders whose shares were held for them in street name or nominee accounts.
The common stock is listed and traded principally on the New York Stock Exchange
and also is listed on certain foreign exchanges. The quarterly financial data on
pages 62 and 63 of this report set forth the range of trading prices for the
common stock as reported on the composite tape of the New York Stock Exchange
and quarterly dividend information.
     The quarterly dividend rate for the common stock is $.25 per share. On
February 8, 2001, a dividend of $.25 per share was declared on the common stock,
payable on April 15, 2001 to stockholders of record on March 9, 2001. The
declaration of future cash dividends is a business decision made by the Board of
Directors from time to time, and will depend on Occidental's financial condition
and other factors deemed relevant by the Board.

                                       13


ITEM 6    SELECTED FINANCIAL DATA



FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA                                       Occidental Petroleum Corporation
Dollar amounts in millions, except per-share amounts                                               and Subsidiaries

For the years ended December 31,                               2000        1999        1998        1997        1996
=======================================================   =========   =========   =========   =========   =========
                                                                                           
RESULTS OF OPERATIONS(a)
    Net sales                                             $  13,574   $   7,820   $   6,805   $   8,325   $   8,278
    Income from continuing operations                     $   1,569   $     568   $     325   $     217   $     514
    Net income(loss)                                      $   1,570   $     448   $     363   $    (390)  $     668
    Earnings(loss) applicable to common stock             $   1,571   $     442   $     346   $    (478)  $     575
    Basic earnings per common share from
      continuing operations                               $    4.26   $    1.58   $     .88   $     .39   $    1.30
    Basic earnings(loss) per common share                 $    4.26   $    1.24   $     .99   $   (1.43)  $    1.77
    Diluted earnings(loss) per common share               $    4.26   $    1.24   $     .99   $   (1.43)  $    1.73

    Earnings before special items(b)                      $   1,326   $     253   $     104   $     691   $     643

FINANCIAL POSITION(a)
    Total assets                                          $  19,414   $  14,125   $  15,252   $  15,291   $  14,981
    Long-term debt, net and non-recourse debt             $   5,185   $   4,368   $   5,367   $   4,925   $   4,511
    Trust Preferred Securities and preferred stock        $     473   $     486   $     243   $   1,177   $   1,331
    Common stockholders' equity                           $   4,774   $   3,523   $   3,120   $   3,109   $   3,809

    Dividends per common share                            $    1.00   $    1.00   $    1.00   $    1.00   $    1.00

AVERAGE SHARES OUTSTANDING (thousands)                      368,973     355,381     350,173     334,341     323,782
- -------------------------------------------------------   ---------   ---------   ---------   ---------   ---------

(a)  See "Management's Discussion and Analysis of Financial Condition and
     Results of Operations" and the "Notes to Consolidated Financial Statements"
     for information regarding accounting changes, asset acquisitions and
     dispositions, discontinued operations, and charges for asset write-downs,
     litigation matters, environmental remediation and other costs and other
     special items affecting comparability.
(b)  Earnings before special items reflect adjustments to net income(loss) to
     exclude the after-tax effect of certain infrequent transactions that may
     affect comparability between years. See the "Special Items" table for the
     specific nature of these items in 2000, 1999 and 1998. Management believes
     the presentation of earnings before special items provides a meaningful
     comparison of earnings between years to the readers of the consolidated
     financial statements. Earnings before special items is not considered to be
     an alternative to operating income in accordance with generally accepted
     accounting principles.

ITEM 7

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (INCORPORATING ITEM 7A)

2000 BUSINESS ENVIRONMENT
OIL AND NATURAL GAS INDUSTRY
     During 2000, West Texas Intermediate ("WTI") crude oil traded in a wide
range, dipping briefly below $24/bbl in April and above $37/bbl in September.
The highest prices were seen in the third and fourth quarter, but they slipped
considerably in December, ending the year at under $27/bbl. However, average
crude oil prices for the year were slightly above $30/bbl, the highest annual
average since 1983. Overall, the crude oil market continues to indicate
uncertainty, both in long-term direction and in short-term price equilibrium.
     NYMEX domestic natural gas prices were also volatile in 2000, ranging from
approximately $2.20/thousand cubic feet ("Mcf") to $10.00/Mcf. Natural gas
prices finished the year very strong, with the fourth quarter averaging over
$5/Mcf, more than double the average prices in the first quarter. A supply
shortage, depleting inventories and an early winter all combined to raise gas
prices to record levels.

CHEMICAL INDUSTRY
     In the first half of 2000, the chemical industry experienced strong product
demand and overall economic growth, but in the second half experienced a
slowdown in product demand that triggered significant inventory corrections
among customers and distributors. In the second half of 2000, the U.S. economy
started showing signs of softening in the housing, auto and other consumer
products related industries. Also, U.S. exports of major commodities were
constrained as Asia and Latin America continued to struggle to improve domestic
demand. The combination of high energy and feedstock costs and reduced product
demand decreased profit margins significantly.
     Domestic chlorine demand increased in 2000 over 1999 due to overall strong
chlorine demand in chemicals, other than vinyls. Chlorine pricing improved in
the first quarter through the third quarter before falling as fourth quarter
demand dropped. Caustic soda prices declined through the first three quarters
due to over-supply, but strengthened significantly in the fourth

                                       14


quarter as supply became limited due to major cutbacks in chlorine production.
Polyvinyl chloride ("PVC") prices continued to improve during the first half
before reaching a peak in June. Then prices weakened as a combination of poor
demand and inventory corrections took hold.

STRATEGIC OVERVIEW AND REVIEW OF BUSINESS RESULTS - 1998 - 2000

STRATEGY
     Occidental's strategy is unchanged since 1997 and consists of two basic
elements:

o    Shift corporate assets to large, long-lived oil and gas assets with growth
     potential

     Occidental will continue to swap or sell marginal assets or assets that are
nearing the end of their economic life cycle and replace them with assets such
as Altura and Elk Hills that give it critical mass in its core markets.
     Occidental also refocused its exploration and enhanced recovery programs to
concentrate primarily in the U.S., the Middle East and Latin America.

o    Harvest cash from chemicals

     To invest in profitable growth opportunities and support debt reduction,
Occidental enhanced its position in core chemical product markets by entering
into strategic alliances that have resulted in cost saving synergies.

SPECIFIC ACTIONS
OIL AND GAS
     In implementing its strategy, Occidental has significantly strengthened its
operations in the U.S., Middle East and Latin America.
     By concentrating on large assets in these core areas, Occidental has used
economies of scale to reduce operating costs and improve margins.
     Occidental has taken a series of steps since 1997 to improve overall
domestic oil and gas performance - beginning with the 1998 acquisition of the
Elk Hills field in California. Each action is discussed below in the "Business
Review." Occidental also consolidated its operations by focusing on 5 states and
exiting 11 others. Occidental has interests in California, Kansas, New Mexico,
Oklahoma and Texas, with California and Texas being the primary areas of focus.
Occidental is no longer active in Alabama, Alaska, Arkansas, Colorado,
Louisiana, Mississippi, Montana, North and South Dakota, Utah and Wyoming.
     Outside the U.S., Occidental reduced the number of countries in which it
was involved from 24 in 1997 to 10 in 2000. Today, Occidental operates in
Albania, Colombia, Ecuador, Indonesia, Oman, Pakistan, Peru, Qatar, Russia and
Yemen. Occidental sold producing properties in Venezuela, the Dutch North Sea
and Peru and exited Angola, China, Egypt, Gabon, Hungary, Ireland and Vietnam,
among others. Occidental also completed asset swaps that strengthened its
position in its core areas. These are discussed below by individual country.

CHEMICALS
     In its chemicals business, Occidental focused on the chlorovinyls chain
where it takes ethylene and chlorine, which is co-produced with caustic soda,
and converts them through a series of intermediate products into PVC.
Additionally, to strengthen its position along the chlorovinyls chain,
Occidental entered into two major business alliances: in 1999, a vinyls
partnership with Geon (now known as "PolyOne") named Oxy Vinyls, LP
("OxyVinyls"); and in 1998 a petrochemicals investment in Equistar Chemicals, LP
("Equistar").

CORPORATE
     Occidental sold all the shares of MidCon Corp ("MidCon"), its natural gas
transmission and marketing business, and exchanged a related note for a total of
$3.5 billion in January 1998. Given the prospects for limited growth in its key
markets, Occidental concluded that MidCon was a non-strategic asset.
     In addition, Occidental redeemed 15 million preferred shares in March 1998,
which saved approximately $58 million annually in preferred stock dividend
costs.
     Occidental received $775 million from Chevron in a litigation settlement in
November 1999, which was used mainly to reduce high-cost debt.
     In April 2000, Occidental sold its interest in Canadian Occidental
Petroleum Ltd., now renamed Nexen Inc. ("CanadianOxy" or "Nexen"). After-tax
proceeds, together with tax benefits from the disposition of the Peru producing
properties, totaled $700 million and were used in its debt reduction program
following the Altura acquisition.

DEBT STRUCTURE
     Occidental's total debt comprises three components, as shown in the table
below (amounts in millions):



                           Occidental         Other   Altura Non-
                               Public      Recourse      Recourse
Date                             Debt          Debt          Debt    Total Debt (a)
=======================   ===========   ===========   ===========   ===========
                                                        
12/31/97                  $     4,965   $     1,361   $        --   $     6,326
12/31/98                  $     5,402   $       776   $        --   $     6,178
12/31/99                  $     4,401   $     1,047   $        --   $     5,448
April 2000*               $     5,766   $     1,009   $     2,400   $     9,175
12/31/00                  $     3,544   $       912   $     1,900   $     6,356
* Pro-forma Post Altura
    Acquisition
- -----------------------   -----------   -----------   -----------   -----------

(a)  Includes Trust Preferred Securities, natural gas delivery commitment,
     preferred stock and capital lease obligations, but excludes unamortized
     discount.

     The table above reflects, on a pro-forma basis, the effect of the $1.2
billion Altura acquisition debt on Occidental's public debt as of April 2000.
     Occidental's public debt at year-end 2000 is more than $1.4 billion below
the year-end 1997 level, and more than $850 million below 1999.
     Occidental's other recourse debt, which includes preferred stock and Trust
Preferred Securities in the

                                       15


above table, decreased from $1.4 billion in 1997 to $912 million in 2000.
     Compared to the pro-forma debt level in April, after the addition of both
the Altura recourse and non-recourse debt, year-end 2000 total debt is
approximately $900 million higher than at the end of 1999. For that $900 million
increase, net proved reserves increased 60 percent from 1.35 billion BOE at the
end of 1999 to 2.17 billion BOE at the end of 2000.

                       Total Debt/Capitalization Ratio (%)
                       -----------------------------------


Date                                    Total Debt/Capitalization Ratio
=====================================   ===============================
                                     
12/31/97                                               67
12/31/98                                               66
12/31/99                                               61
April 2000*                                            71
12/31/00                                               57
* Pro-forma Post Altura Acquisition
- -------------------------------------   -------------------------------


     Despite reflecting the Altura acquisition during the year, Occidental's
year-end 2000 total debt-to-capitalization ratio has declined to approximately
57 percent from the 67 percent level that existed at the end of 1997. The
debt-to-capitalization ratio is computed by dividing total debt by total
capitalization, excluding minority interest. Occidental intends to achieve
additional debt reduction from free cash flow in 2001.

RETURN ON EQUITY



                               Average Years (a)                    Annual(b)
==============   =============================================   =========
                  10 Years     7 Years     5 Years     3 Years        2000
                 ---------   ---------   ---------   ---------   ---------
                                                  
Return on
  Equity (%)           7.7        10.6        12.9        20.8        37.9
- --------------   ---------   ---------   ---------   ---------   ---------

(a)  The return on equity for the multi-year periods was calculated by computing
     the return on equity for each year, using earnings applicable to common
     stock and the average equity balance, and then averaging the return over
     the respective periods.
(b)  The return in 2000 was calculated by dividing Occidental's 2000 earnings
     applicable to common stock by the average equity balance in 2000.

     The table above shows Occidental's return on equity for the most recent 10,
7, 5 and 3-year periods, as well as the return for the year 2000. These results
include non-recurring items such as asset sales and asset write-downs.
     This table shows significant and steady progress in improving Occidental's
returns on equity. The improvement over the last three years reflects the growth
of the oil and gas business, higher oil and gas prices and the effect of the
special items. These improvements also include an increase in Occidental's
equity of over $1.2 billion during 2000.

BUSINESS REVIEW - OIL AND GAS
ALTURA ACQUISITION
     Occidental completed the acquisition of the Altura properties, valued at
$3.6 billion, on April 19, 2000. Since the acquisition, the Altura properties
have generated approximately $674 million in operating cash flow after capital
expenditures.
     Net production averaged 142,000 BOE per day - 7,000 barrels per day more
than Occidental initially projected.
     The Altura properties have been successfully integrated with Occidental's
existing Permian operations making Occidental the largest oil producer in Texas.

OCCIDENTAL'S PERMIAN BASIN
     Occidental's portfolio of assets in the Permian Basin includes interests in
10 of the 50 largest fields ever discovered in the U.S. and 8 of the 10 largest
fields in the Permian Basin. These fields are expected to provide a steady base
of long-lived production, as well as an opportunity for expansion through
additional enhanced recovery operations.
     With the Altura acquisition, Occidental has become a world leader in CO2
flood technology, an enhanced oil recovery technique. Currently, Occidental has
more than 50 active CO2 floods which provide about half of Occidental's
production in the Permian Basin.

MILNE POINT - BRAVO DOME SWAP
     Occidental recently swapped its 9 percent interest in the Milne Point field
in Alaska operated by British Petroleum ("BP") for BP's 75 percent working
interest in the Bravo Dome CO2 unit in northern New Mexico.
     Production of CO2 at Bravo Dome is roughly equal to Occidental's total CO2
requirements in the Permian Basin. Because of third-party sales commitments,
Bravo Dome currently meets approximately 50 percent of Occidental Permian's CO2
demand.
     This transaction assures Occidental of a long-term, secure supply of CO2 to
support the exploitation of its Permian assets and enhances the value of its
Altura investment.

THUMS
     The purchase of the THUMS oil properties in Long Beach, California
essentially offset production from the property Occidental sold in Peru. THUMS
production generates significantly higher price realizations than the Peru
operation and it has a much longer life. At year end, net production was
averaging 25,000 barrels per day.

GULF OF MEXICO
     Occidental monetized its interests on the Continental Shelf in the Gulf of
Mexico ("GOM"), which would have required significant capital expenditures for
future development.

ELK HILLS ACQUISITION
     Elk Hills has generated total free cash flow, after capital expenditures,
of approximately $1.27 billion since the acquisition. Beginning in 1999, the
first full year that Occidental owned the field, production has held steady at
approximately 96,000 BOE per day.
     Since the date of acquisition, Occidental has replaced 114 percent of its
total oil and gas production at Elk Hills.
     Additionally, Occidental has succeeded at driving down its costs at Elk
Hills. Since gas production in Southern California has been selling at premium
prices compared to almost all other domestic markets, the combination of high
prices and low costs has resulted in very strong earnings from Elk Hills.

                                       16


     By the end of 2000, Occidental produced a total of 100 million BOE at Elk
Hills since its acquisition in 1998, and the property still has an estimated 438
million BOE of proved reserves.
     Occidental is currently in the early stages of a three-year exploration
program that has already achieved positive results. The first test well was
successful - yielding 2.5 million gross proved barrels. Production from this
discovery has already begun.

MIDDLE EAST
OMAN
     Occidental is the operator on Block 9 in Oman where it is actively
developing six fields. Occidental holds a 65 percent interest under a
production-sharing agreement and it operates the Safah field in the northwest
part of the block and the Wadi Latham/Al Barakah fields in the south-central
part. Current gross production is 39,000 barrels of oil per day with more than
9,000 net to Occidental.
     The Safah waterflood is now in its second year. The field remains
Occidental's most important development project in Oman and it expects to
increase ultimate recovery from the Safah field from 20 percent to 30 percent of
the oil in place. Occidental's contract, which runs through 2015, can be
extended to 2025 upon completion of the waterflood.
     Occidental is also the operator and owner of a 100 percent oil interest and
a 65 percent gas interest in Block 27, where it began to drill the first
exploration wells in the fourth quarter of 2000.

PAKISTAN
     Occidental holds interests in the Badin Blocks in Pakistan, which are
operated by BP. Current gross production is 58,000 BOE per day. Occidental's net
share is approximately 14,000 BOE per day.
     Data obtained from a three-dimensional seismic survey on the Badin Blocks
in 1996 and 1997 has significantly increased the success rate for both
exploration and development while, at the same time, reducing dry hole costs.
     Current plans call for drilling 13 to 15 wells per year to develop existing
and newly developed fields by the end of 2002, and it is also continuing to
evaluate additional exploration opportunities.

YEMEN
     In 1998, Occidental swapped its holdings in Malaysia and the Philippines,
which had long lead times and intensive capital requirements, for Shell's
production interests in Colombia and Yemen. In Yemen, the asset swap allowed
Occidental to more than double its interest in the Masila Block, which is
operated by Nexen, to a 38 percent working interest. Gross production has
increased from 120,000 barrels per day early in 1994, when operations began, to
217,000 barrels per day in 2000. Occidental's net share was approximately 27,000
barrels per day in 2000.
     The current plan is to continue to exploit identified reserves through a
focused drilling program over the next five years. Occidental believes this
program will maintain gross production at approximately 230,000 barrels per day
through 2002.
     In adjacent East Shabwa, production has risen substantially since
Occidental acquired its 29 percent interest in 1999 in a swap with Unocal.
Current gross production is averaging 28,000 barrels of oil per day from three
fields, approximately 6,000 barrels of oil per day net to Occidental, up from
16,000 at the time of the swap. Three-dimensional seismic surveys planned for
2001 will help identify additional exploration objectives in East Shabwa.
Occidental is also evaluating exploration acreage.

QATAR
     In Qatar, Occidental's strategy is to continue development of the offshore
North Dome and South Dome fields. Since 1994, it has produced about 190 million
gross barrels of oil in Qatar. Total year-end 2000 proved oil reserves net to
Occidental for both fields are estimated to be approximately 153 million
barrels. Combined production for the two fields in 2000 was approximately
105,000 barrels per day gross and approximately 49,000 barrels per day net to
Occidental.
     At the North Dome field, Occidental is implementing a waterflood project to
develop the Shuaiba reservoir. Occidental expects to complete a water injection
plant by the end of the first quarter of 2001 with injection capacity of 160,000
barrels of water per day and it plans to drill 15 wells - 8 producers and 7
injectors - in 2001.
     In 2002, Occidental expects to begin further development of non-Shuaiba
reserves.
     Occidental is also evaluating second-generation enhanced-recovery projects
at the North Dome field.
     Occidental has completed its evaluation of the South Dome field and has
submitted a full field development plan to the government.

SAUDI ARABIA
     The government of Saudi Arabia has decided to open its natural gas sector
to foreign investment to help meet the Kingdom's needs for fuel, electric power
and water. Occidental was one of the firms invited by Saudi authorities to
submit letters of intent to participate in two of the three core natural gas and
infrastructure ventures approved for development. Occidental, jointly with
Enron, has submitted proposals that include (1) upstream exploration,
development and production, (2) midstream gathering, processing and transmission
and (3) downstream distribution.

LIBYA
     Occidental is also evaluating a series of opportunities in Libya that focus
on returning to operate the assets that it operated before the U.S. government
imposed sanctions in 1986. Occidental sees significant potential for enhancing
production from these older fields as well as applying state-of-the-art
technology to its existing exploration prospects. Occidental has a long track
record of success in Libya, but its return is contingent upon a shift in U.S.
policy permitting U.S. companies to resume operation of their existing Libyan
assets.

                                       17


LATIN AMERICA
COLOMBIA

     In Colombia, Occidental is pursuing an aggressive drilling program to
optimize the recovery of reserves from Cano Limon. Occidental completed 16
development wells in 2000, and expects to complete another 20 wells in 2001 and
11 wells in 2002. Production in 2000 was 93,000 gross barrels of oil per day,
32,000 barrels per day net to Occidental.
     Although liftings have been significantly reduced since June 2000 due to
disruptions of the Cano Limon pipeline, Occidental presently anticipates that it
will recover the proved reserves attributable to its contract, which amount to
less than 3 percent of its worldwide proved oil and gas reserves.
     Occidental began drilling the Gibraltar exploration well in November 2000.
The well location is approximately 100 miles west of Cano Limon and less than
two miles from a major pipeline that is connected to the export market. The
pipeline has a capacity of 250,000 barrels per day and is currently 40 percent
full. Occidental expects to complete the well in mid year.

ECUADOR
     Gross production from Occidental's Block 15 interests in Ecuador is
currently averaging approximately 30,000 barrels of oil per day, net to
Occidental of 17,000 barrels per day.
     Occidental recently farmed out a 40 percent economic interest in Block 15
to Alberta Energy Company Ltd. ("AEC"). This transaction reduces Occidental's
business and political risk in Ecuador and is expected to largely fund its
capital program in-country for the next four years.
     Both Occidental and AEC are members of a consortium of producers that have
formed an independent pipeline company to build a new heavy oil pipeline in
Ecuador. Ecuador is currently pipeline-capacity constrained, so the new pipeline
is expected to foster oil development. The independent pipeline company has
signed an agreement with the government to build a 500-kilometer pipeline from
the interior Oriente Basin to the coast of Ecuador over a two-year period. The
pipeline is expected to make it feasible for Occidental to develop the
potentially significant Eden Yuturi field it discovered several years ago in the
southeastern edge of Block 15.

BUSINESS REVIEW - CHEMICALS
     The performance of the chemical business is difficult to forecast from year
to year, but when the market is strong, these businesses are capable of
contributing strong earnings and cash flow.
     After a strong first half of 2000 in the PVC business, sales declined in
the second half as customers began to draw down inventories that had grown with
the expectation of higher prices.
     In Occidental's chlor-alkali business, the reduced demand for vinyls in the
second half of 2000 has adversely impacted the chlorine market. Chlorine sales
and operating rates have declined. Operating rates dropped to 85 percent in the
second half - down from 99 percent in the first half of the year.
     Feedstock and energy cost increases adversely affected earnings in the
third and fourth quarter.
     The upside to the reduced demand for chlorine is supply shortages in the
caustic soda markets where demand has remained stable and prices are increasing.
     Petrochemical prices are expected to remain under increasing pressure with
the startup of significant new capacity this year and next from BASF/Fina,
Formosa Plastics and Union Carbide/Nova Chemicals. Margins are expected to
remain compressed under the pressure of sustained high feedstock costs.
     The primary goal of Occidental's chemicals business is to harvest cash that
can be used to reduce debt and to fund new opportunities. As shown below, from
1995 through 2000, total cash flow from the chemicals business was $3.6 billion
- - with $2.5 billion in cash after capital expenditures coming from Occidental's
core chemical businesses. Asset sales, net of acquisitions, accounted for $1.1
billion.

                        Chemicals Cash Flow - 1995 - 2000
                        ---------------------------------
                                                     
Operating Cash Flow After Capital Expenditures          $2.5 Billion
Asset Sales, Net of Acquisitions                        $1.1 Billion
                                                        ------------
    Total                                               $3.6 Billion
                                                        ============



SUMMARY OF RESULTS AND PLANS FOR FUTURE GROWTH
     In summary, the strategic moves made in the past three years have resulted
in significant growth for Occidental.
     In oil and gas, Occidental's profitability per barrel has grown
significantly. Occidental has increased production by a compound annual growth
rate of 6 percent and it has increased its reserves-to-production ratio by 40
percent. Upgrading its portfolio of assets has enabled Occidental to improve
both oil and gas price realizations. Operating and administrative costs have
been reduced significantly since 1997. These actions contributed to substantial
improvements in recurring earnings from Occidental's oil and gas business.
     In chemicals, Occidental has delivered the synergies expected from its
alliances. When the chemical cycle turns upward, the chemical business will
generate more cash flow.
     From its pro-forma high debt level in April, Occidental exceeded its $2
billion debt reduction target for 2000 by an additional $800 million. It has
also improved its return on equity. The growth in Occidental's return on equity
over the past three years demonstrates that its strategy for creating value is
sound.
     Occidental has ongoing growth initiatives within its base assets to achieve
the kind of growth necessary to exceed its financial targets. In oil and gas, it
will rely on a three-pronged strategy that encompasses enhanced oil recovery,
exploration and acquisitions. In enhanced oil recovery, Occidental has focused
on two core areas - the Middle East and Latin America - where it has a long
history of success. In exploration, Occidental has a focused program targeting
opportunities in its core areas in the U.S., the Middle East and Latin America.
     The commodity chemicals industry is currently under the pressure of high
energy prices and soft

                                       18


demand. When the industry begins to recover, Occidental expects its core
operations to generate strong cash flow.
     Overall, however, higher energy prices are a significant net benefit to
Occidental's earnings and cash flow.

2001 OUTLOOK
OIL AND NATURAL GAS
     The petroleum industry is a highly competitive business subject to
significant volatility due to numerous external market forces. Crude oil and
natural gas prices are affected by market fundamentals such as weather,
inventory levels, competing fuel prices, overall demand and the availability of
supply.
     While fundamentals are a decisive factor affecting crude oil prices over
the long term, day-to-day prices may be more volatile in the futures markets,
such as on the NYMEX and other exchanges, which make it difficult to accurately
predict oil and natural gas prices. However, weather patterns do have a more
immediate effect, particularly on natural gas prices. In the United States, the
initially severe 2000-2001 winter season increased demand for natural gas, and
tight supply led to very low inventory levels. Inventories at the end of 2000
were at their lowest levels for that time of year since 1993.
     Gas production in California of approximately 300 million cubic feet per
day accounts for about 45 percent of Occidental's total U.S. gas production. The
California border and the Henry Hub prices are usually close in value. In the
late fall of 2000, the price differential between Henry Hub and the California
border began to increase driving California prices higher than the NYMEX index.
The reasons behind the increased differential are complex, but the change is due
partially to supply disruptions caused when a major pipeline transporting gas
from the southwestern states to California was temporarily out of commission.
Subsequently, a myriad of other factors contributed to a further widening in the
differential that exceeded $3.00 in December and remains volatile on a
day-to-day basis.
     Since there is a time lag of one month between Occidental's gas production
and recorded sales, the results from high gas prices in December 2000 will have
a significant impact on the company's financial performance in the first quarter
of 2001. The combination of high gas prices and low inventory levels, which
continue in the first quarter of 2001, and the unique characteristics of the
California gas market, is expected to result in higher average gas price
realizations for Occidental in 2001 than in 2000.

CHEMICAL
     The widely reported slowdown in the U.S. economy reduced operating rates in
petrochemicals and Occidental's chlor-alkali/vinyls business to the low 80
percent level. These low operating rates are continuing in the first quarter.
Normally, the chemical industry is profitable when operating rates range from
the high 80 to low 90 percent levels. Under current conditions, Occidental is
unable to pass through to its customers the full cost of higher electricity and
natural gas prices.
     Although overall pricing may improve in the chemical segment in the second
half of 2001, from the decline experienced in the second half of 2000, higher
energy and feedstock costs and lower demand would continue to have a negative
effect on chemical margins. Specific comments by sub-segment are given below.

CHLOR-ALKALI
     Domestic demand for chlorine is expected to grow approximately 2 percent in
2001, but industry capacity additions are expected to limit operating rates.
Caustic soda markets should remain tight until the vinyls demand for chlorine
strengthens.
     Chlorine prices peaked early in the third quarter of 2000 due to strong
global demand for ethylene dichloride ("EDC") and strong domestic demand for PVC
in the first half of the year. Later in the third quarter, reduced demand for
chlorine resulted in falling prices and reduced operating rates. Liquid caustic
soda demand remained steady and prices increased due to the reduced supply. This
trend of increasing prices for liquid caustic and declining prices for chlorine
is expected to continue in 2001. Occidental announced February 21, 2001 that it
will temporarily suspend production at its Convent, Louisiana, chlor-alkali and
EDC plant, effective February 28, 2001. The decision was made in response to
sharply higher costs for raw materials, particularly ethylene feedstock and
electricity. The facility will remain idle until economic conditions improve.

VINYLS
     For 2001, demand is expected to increase from second half 2000 levels.
However, overall growth will remain modest, tempered by higher energy costs and
lower consumer confidence. Excess PVC resin is expected to be available, and
operating rates constrained, as the marketplace begins to absorb new capacity
from the staged startup of the industry's major new PVC plant addition in
Louisiana. Overall, vinyls margins are expected to decline.

PETROCHEMICALS (EQUISTAR)
     Industry forecasts project continued pressure on margins due to continued
high feedstock costs combined with weak demand and capacity additions in the
industry.

INCOME SUMMARY
     Occidental reported net income of $1.6 billion ($4.26 per share) in 2000,
on net sales of $13.6 billion, compared with net income of $448 million ($1.24
per share) in 1999, on net sales of $7.8 billion. Earnings before special items
were $1.3 billion in 2000 and $253 million in 1999.

SEGMENT OPERATIONS
     The following discussion of Occidental's two operating segments and
corporate items should be read in conjunction with Note 16 to the Consolidated
Financial Statements.

                                       19


     Segment earnings exclude interest income, interest expense, unallocated
corporate expenses and extraordinary items, but include gains and losses from
dispositions of segment assets and results from equity investments.
     Foreign income and other taxes and certain state taxes are included in
segment earnings on the basis of operating results. U.S. federal income taxes
are not allocated to segments except for amounts in lieu thereof that represent
the tax effect of operating charges resulting from purchase accounting
adjustments, and the tax effects resulting from major, infrequently occurring
transactions such as asset dispositions and legal settlements that relate to
segment results. Segment earnings in 2000 were affected by $25 million from net
charges allocated comprising $32 million of charges and $7 million in credits in
oil and gas and chemical, respectively. Segment earnings in 1999 were affected
by $212 million from net charges allocated comprising $228 million of charges
and $16 million of credits in oil and gas and chemical, respectively. The oil
and gas amount included a charge related to the income on the Chevron litigation
settlement and a credit for losses on sales of assets. Segment earnings in 1998
were affected by $176 million from net charges comprising $202 million of
charges and $26 million in credits in oil and gas and chemical, respectively.
     The following table sets forth the sales and earnings of each operating
segment and corporate items:

SEGMENT OPERATIONS
In millions


For the years ended December 31,          2000       1999       1998
===================================   ========   ========   ========
                                                   
SALES
Oil and Gas                           $  9,779   $  4,599   $  3,650
Chemical                                 3,795      3,221      3,155
                                      --------   --------   --------
                                      $ 13,574   $  7,820   $  6,805
===================================   ========   ========   ========

EARNINGS(LOSS)
Oil and Gas                           $  2,417   $  1,267   $    592
Chemical                                   169        (37)       287
                                      --------   --------   --------
                                         2,586      1,230        879

Unallocated corporate items
    Interest expense, net (a)             (380)      (468)       (451)
    Income taxes                          (861)       (68)        (14)
    Trust preferred distributions          (67)       (62)        (20)
      and other
    Other (b)                              291        (64)        (69)
                                      --------   --------   ---------

Income from continuing
  operations                             1,569        568         325
Discontinued operations, net                --         --          38
Extraordinary gain(loss), net                1       (107)         --
Cumulative effect of changes in
  accounting principles, net                --        (13)         --
                                      --------   --------   ---------

Net Income                            $  1,570   $    448   $     363
===================================   ========   ========   =========

(a)  The 2000 amount is net of $106 million interest income on notes receivable
     from Altura partners.
(b)  The 2000 amount includes the pre-tax gain on the sale of the CanadianOxy
     investment of $493 million, partially offset by preferred distributions to
     the Altura partners of $107 million. These preferred distributions are
     essentially offset by the interest income discussed in (a) above.

OIL AND GAS


In millions, except as indicated              2000       1999       1998
=======================================   ========   ========   ========
                                                       
SEGMENT SALES                             $  9,779   $  4,599   $  3,650
SEGMENT EARNINGS                          $  2,417   $  1,267   $    592
EARNINGS BEFORE SPECIAL ITEMS(a)          $  2,404   $    841   $    316
AVERAGE SALES PRICES
   CRUDE OIL PRICES (per barrel)
     U.S.                                 $  26.66   $  15.81   $  12.06
     Latin America                        $  26.01   $  13.20   $   8.78
     Eastern Hemisphere                   $  25.14   $  15.86   $  11.12
   GAS PRICES (per thousand cubic feet)
     U.S.                                 $   3.66   $   2.09   $   2.05
     Eastern Hemisphere                   $   1.99   $   1.17   $   2.03
EXPENSED EXPLORATION(b)                   $     94   $     75   $    128
CAPITAL EXPENDITURES
   Development                            $    582   $    302   $    545
   Exploration                            $    132   $    103   $    140
   Acquisitions and other(c, d)           $     77   $     69   $     66
- ---------------------------------------   --------   --------   --------

(a)  Earnings before special items represents segment earnings adjusted for the
     effect of certain infrequent transactions that may affect comparability
     between years. Earnings before special items is not considered to be an
     alternative to operating income in accordance with generally accepted
     accounting principles. See "Special Items" table for a list of special
     items affecting earnings.
(b)  Includes certain amounts previously shown in exploration capital
     expenditures.
(c)  Includes mineral acquisitions only but excludes significant acquisitions
     individually discussed in this report.
(d)  Includes capitalized CO2 of $44 million in 2000.

     Occidental explores for and produces oil and natural gas, domestically and
internationally. Occidental seeks long-term growth and improvement in
profitability and cash flow through a combination of improved operations in
existing fields, enhanced oil recovery projects, selected exploration
opportunities and complementary property acquisitions.
     Earnings before special items in 2000 were $2.4 billion, compared with
earnings before special items of $841 million in 1999. The increase in earnings
before special items reflected primarily the impact of higher worldwide crude
oil and natural gas prices, higher domestic production volumes and lower
overhead costs, partially offset by lower international production.
     Earnings before special items in 1999 were $841 million, compared with
earnings before special items of $316 million in 1998. The increase in earnings
before special items reflected the impact of higher worldwide crude oil prices,
lower operating and exploration costs, and higher natural gas volumes, partially
offset by lower crude oil volumes.
     Approximately 50 percent of oil and gas sales revenues for 2000 were
attributable to oil and gas trading activity, compared with approximately 43
percent in 1999 and 44 percent in 1998. Occidental participates in oil and gas
trading to optimize its long-term global marketing efforts. The results were not
significant.

                                       20


CHEMICAL


In millions, except as indicated                 2000       1999       1998
==========================================   ========   ========   ========
                                                          
SEGMENT SALES                                $  3,795   $  3,221   $  3,155
SEGMENT EARNINGS (LOSS)                      $    169   $    (37)  $    287
EARNINGS BEFORE SPECIAL ITEMS(a)             $    293   $    147   $    317
KEY PRODUCT INDEXES (1987 through
     1990 average price = 1.0)
   Chlorine                                      1.58       0.79       1.13
   Caustic soda                                  0.69       0.66       1.02
   Ethylene Dichloride                           1.37       0.97       0.46
   PVC commodity resins (c)                      0.95       0.70        .60
KEY PRODUCT VOLUMES
   Chlorine (thousands of tons)                 2,977      3,230      2,983
   Caustic soda (thousands of tons)             3,165      3,223      3,208
   Ethylene Dichloride (thousands of tons)        979      1,080        843
   PVC commodity resins
      (millions of pounds)                      4,484      3,454      1,755
CAPITAL EXPENDITURES(b)
   Basic chemicals                           $     49   $     35   $    126
   Vinyls                                    $     61   $     25   $     34
   Specialty businesses                      $     41   $     50   $    148
   Other                                     $      4   $      6   $     13
- ------------------------------------------   --------   --------   --------

(a)  Earnings before special items represents segment earnings adjusted for the
     effect of certain infrequent transactions that may affect comparability
     between years. Earnings before special items is not considered to be an
     alternative to operating income in accordance with generally accepted
     accounting principles. See "Special Items" table for a list of special
     items affecting earnings.
(b)  Excludes the formation of OxyVinyls and the acquisition of the balance of
     INDSPEC.
(c)  Product volumes produced at PolyOne facilities contributed to OxyVinyls are
     excluded from the product indexes.

     Earnings before special items were $293 million in 2000, compared with $147
million in 1999. The increase in earnings before special items reflected the
impact of higher average prices for chlorine, EDC and PVC resins, partially
offset by higher raw material and feedstock costs.
     Earnings before special items were $147 million in 1999, compared with $317
million in 1998. The decrease in earnings before special items primarily
reflected the impact of lower prices for chlorine and caustic soda, as well as
higher costs for ethylene and natural gas.

SPECIAL ITEMS
     Special items are significant, infrequent items reflected in the
Consolidated Statements of Operations that may affect comparability between
years. The special items included in the 2000, 1999 and 1998 results are
detailed below. For further information, see Note 16 to the Consolidated
Financial Statements and the discussion above.

SPECIAL ITEMS


Benefit (Charge) In millions                 2000       1999       1998
======================================   ========   ========   ========
                                                      
OIL AND GAS
   Gain on partial sale of Gulf of
      Mexico assets (a)                  $     39   $     --   $     --
   Write-down of various assets, real
      estate and investments                  (53)        (9)       (30)
   Loss on sale of office building (a)        (14)        --         --
   Chevron litigation settlement (a)           --        488         --
   Write-down of Peru
      producing operations (a)                 --        (29)        --
   Claims, settlements,
      reorganization and other                 --        (35)       (12)
   Gain on buyout of contingency
      payment (a)                              41         --         --
   Gain on receipt of contingency
      payment                                  --         11         --
   Gains on sales of major
      nonstrategic assets (a)                  --         --        317
- --------------------------------------   --------   --------   --------

CHEMICAL
   Write-down of chemical
      intermediate businesses and
      various assets                     $   (135)  $   (159)  $     --
   Gain on sale of Durez business (a)          13         --         --
   Loss on foreign investment
      abandonment (a)                          (2)        --         --
   Write-downs by Equistar                     --        (28)        --
   Gain on sale of chemical plant by
      Equistar                                 --         12         --
   Claims and settlements                      --         (9)        --
   Reorganization and other                    --         --        (30)
- --------------------------------------   --------   --------   --------

CORPORATE
   Gain on sale of CanadianOxy
      investment                         $    493   $     --   $     --
   Claims and settlements                     (17)        --         --
   Extraordinary gain(loss) on debt
     redemption (a)                             1       (107)        --
   Insurance dividend                          11         18          9
   Changes in accounting
      principles (a)                           --        (13)        --
   Discontinued operations (a)                 --         --         38
- --------------------------------------   --------   --------   --------

(a)  These amounts are shown after-tax.

CONSOLIDATED OPERATIONS--REVENUES

SELECTED REVENUE ITEMS


In millions                                        2000       1999       1998
============================================   ========   ========   ========
                                                            
Net sales                                      $ 13,574   $  7,820   $  6,805
Interest, dividends and other income           $    263   $    913   $    261
Gains(losses) on disposition of assets, net    $    639   $    (13)  $    546
Income(loss) from equity investments           $     67   $     41   $    (22)
- --------------------------------------------   --------   --------   --------


     The increase in sales in 2000, compared with 1999, primarily reflected
higher worldwide crude oil and natural gas prices, higher domestic oil
production, mainly from the Altura and THUMS acquisitions, higher oil and gas
trading activity and the inclusion of the full year revenues from OxyVinyls,
partially offset by lower international oil production.

                                       21


     The increase in sales in 1999, compared with 1998, primarily reflected
higher worldwide crude oil prices in the oil and gas segment, and the inclusion
of eight months of revenues from OxyVinyls, partially offset by lower prices for
chlorine and caustic soda and the absence of revenues related to the
petrochemical assets contributed to Equistar in May 1998 in the chemical
segment.
     Interest, dividends and other income in 2000 included interest income on
the notes receivable from the Altura partners of $106 million. Interest,
dividends and other income in 1999 included the favorable litigation settlement
of $775 million. Interest, dividends and other income in 1998 included interest
earned on a $1.4 billion note (the $1.4 billion note receivable) received in
exchange for a note previously issued to Occidental by the MidCon Corp. Employee
Stock Ownership Plan ("ESOP") Trust.
     Gains on disposition of assets in 2000 included the pre-tax gain of $493
million on the sale of the CanadianOxy investment, the pre-tax gain of $61
million on the partial sale of the Gulf of Mexico assets, the pre-tax gain of
$63 million on the receipt of contingency payments related to a prior year sale
of a Dutch North Sea subsidiary and the pre-tax gain of $34 million on the sale
of the Durez business. Gains on disposition of assets in 1998 included net
pre-tax gains of $532 million on major nonstrategic assets sold as part of an
asset redeployment program.
     The increase in income from equity investments in 2000, compared with 1999,
was due to higher earnings at Equistar.
     The increase in income from equity investments in 1999, compared with 1998,
primarily reflected the impact of higher worldwide crude oil prices and improved
export prices for vinyl chloride monomer ("VCM").

CONSOLIDATED OPERATIONS--EXPENSES

SELECTED EXPENSE ITEMS


In millions                                 2000       1999       1998
=====================================   ========   ========   ========
                                                     
Cost of sales                           $  8,963   $  5,269   $  4,671
Selling, general and administrative
   and other operating expenses         $    691   $    645   $    678
Write-downs of assets                   $    180   $    212   $     30
Minority interest                       $    185   $     58   $      1
Interest and debt expense, net          $    518   $    498   $    559
- -------------------------------------   --------   --------   --------


     The increase in cost of sales in 2000, compared with 1999, primarily
reflected the higher costs related to oil and gas trading, higher domestic oil
production volumes and higher raw material and energy costs in the chemical
segment.
     The increase in cost of sales in 1999, compared with 1998, primarily
reflected higher costs related to oil and gas trading, the inclusion of cost of
sales related to the acquired PolyOne facilities and higher raw material and
energy costs in the chemical segment. These were partially offset by the absence
of costs related to the petrochemical assets contributed to Equistar in May 1998
and cost reductions.
     Selling, general and administrative and other operating expenses increased
in 2000, compared to 1999, due to the increase in oil and gas production taxes
resulting from higher oil and gas prices and the acquisition-related higher
production, partially offset by lower other costs.
     Selling, general and administrative and other operating expenses decreased
in 1999, compared with 1998, due to ongoing cost reduction programs.
     The increase in minority interest in 2000, compared with 1999, was due to
the preferred distributions to the Altura partners of $107 million.
     The increase in interest and debt expense, net in 2000, compared to 1999,
reflected the interest on the Altura non-recourse debt, partially offset by
lower outstanding corporate debt levels.
     The decrease in interest and debt expense in 1999, compared with 1998,
reflected lower outstanding debt levels, partially offset by higher rates.

LIQUIDITY AND CAPITAL RESOURCES

OPERATING ACTIVITIES


In millions                         2000       1999       1998
                                ========   ========   ========
                                             
NET CASH PROVIDED               $  2,401   $  1,044   $     80


     The higher operating cash flow in 2000, compared with 1999, resulted from
higher earnings before special items. Depreciation, depletion and amortization
of assets increased due to the increase in property, plant and equipment from
the Altura acquisition.
     The higher operating cash flow in 1999, compared with 1998, resulted from
higher earnings before special items. Other non-cash charges to income were
higher in 1999 compared with 1998, which reflected the non-cash write-downs in
the chemical and oil and gas segments. See the "Special Items" table on page 21.
Changes in operating assets and liabilities reflected lower net working capital
usage in 1999, compared with 1998. Other operating expenses in 1999 reflected
lower payments for other operating uses such as litigation and environmental
costs. Included in total cash flow from operating activities in 1998 was cash
used by discontinued operations of $244 million, which included the negative
effect of $250 million of receivables repurchased in connection with the sale of
MidCon.
     Other non-cash charges in 2000 included the write-down of the chemical
intermediate businesses and other miscellaneous items. Other non-cash charges in
1999 included the write-down of chemical assets and other miscellaneous items.
Other noncash charges in 1998 included a charge for the write off of an
investment in certain exploration properties, previously announced
reorganization expense accruals and other miscellaneous items. See the "Special
Items" table on page 21. Each of the three years also included charges for
employee benefit plans and other items.

INVESTING ACTIVITIES


In millions                         2000       1999       1998
                                ========   ========   ========
                                             
NET CASH(USED) PROVIDED         $ (3,097)  $  1,591   $ (1,216)


     The 2000 amount includes the gross proceeds of approximately $800 million
from the sale of the CanadianOxy investment, gross proceeds of $150 million from
the sale of the Durez business and

                                       22


approximately $342 million from the monetization of the GOM assets. The 2000
amount also includes the purchases of Altura and THUMS.
     The 1999 amount included the proceeds from the $1.4 billion note receivable
and the $775 million proceeds from the Chevron litigation settlement. The 1999
amount reflected lower capital expenditures and also reflected net cash used of
$113 million in connection with the formation of OxyVinyls. The 1998 amount
reflected cash used of $3.5 billion for the purchase of the Elk Hills field. The
1998 amount also included the proceeds of $3.4 billion, primarily from the sale
of MidCon and nonstrategic oil and gas properties. Cash used in investing
activities included Occidental's capital expenditure program as discussed below.
     Included in investing activities was net cash used by investing activities
of discontinued operations of $6 million in 1998.

CAPITAL EXPENDITURES


IN MILLIONS                         2000        1999       1998
=============================   ========   =========   ========
                                              
Oil and Gas                     $    791   $     474   $    751
Chemical                             155         116        321
Corporate and other                    6          11          2
                                --------   ---------   --------
                                $    952   $     601   $  1,074
=============================   ========   =========   ========


     Oil and gas capital expenditures were higher in 2000 reflecting higher
development spending resulting, in part, from a larger asset base. Amounts from
all three years exclude significant acquisitions.
     Occidental's capital spending budget for 2001 is $1.1 billion. Of the
total, approximately $1 billion will be allocated to oil and gas, with the
Permian Basin, Elk Hills and Qatar again receiving the highest priority. The
remainder will be allocated to chemicals.
     As part of the asset redeployment program, Occidental completed the sale in
1998 of various international and domestic nonstrategic oil and gas properties.
Net proceeds from all major nonstrategic oil and gas asset sales were $1.1
billion, and the total net pre-tax gain was $532 million, which is included in
the total gain from disposition of assets of $546 million. Additionally,
Occidental made a cash payment of $89 million to Shell in connection with the
exchange of certain oil and gas interests.

FINANCING ACTIVITIES


In millions                         2000       1999       1998
                                ========   ========   ========
                                             
NET CASH PROVIDED(USED)         $    579   $ (2,517)  $  1,119


     The 2000 amount reflected the proceeds from the $2.4 billion non-recourse
debt offset by repayments of $1.4 billion on the long-term and non-recourse
debt. The 2000 amount also includes the first year of purchases made to satisfy
delivery commitments under the gas pre-sale commitment that was signed in 1998.
     The 1999 amount reflected the repayment of commercial paper and long-term
debt.
     The 1998 amount reflected net cash provided of $1.9 billion, primarily from
proceeds from borrowings, to fund a portion of the acquisition of the Elk Hills
field in February 1998. Cash used for financing activities in 1998 included $937
million for the common stock repurchase program announced in October 1997. Under
the program, Occidental repurchased a total of 39.3 million shares, of which,
35.1 million shares were repurchased in 1998.
     Occidental paid common stock dividends of $369 million in 2000 and paid
preferred and common stock dividends of $363 million in 1999 and $387 million in
1998. In 1999, a total of 4,847,130 shares of CXY-indexed convertible preferred
stock were converted by the holders into 15,708,176 shares of Occidental's
common stock. The holders of the $3.875 preferred stock converted all of the
15.1 million shares into 33.2 million shares of Occidental common stock in March
1998. At the end of 2000 and 1999, Occidental had no preferred stock
outstanding. However, the Trust Preferred Securities issued in January 1999 by
Oxy Capital Trust I, a wholly-owned subsidiary of Occidental, remain outstanding
at December 31, 2000.
     Occidental has a centralized cash-management system that funds the working
capital and capital expenditure requirements of its various subsidiaries. There
are no provisions under existing debt agreements that significantly restrict the
ability to move funds among operating entities.

ANALYSIS OF FINANCIAL POSITION
     The changes in the following components of Occidental's balance sheet are
discussed below:

SELECTED BALANCE SHEET COMPONENTS


In millions                                              2000       1999
==================================================   ========   ========
                                                          
Trade receivables, net                               $    809   $    559
Receivables from joint ventures, partnerships
   and other                                         $    517   $    215
Long-term receivables, net                           $  2,119   $    168
Equity investments                                   $  1,327   $  1,754
Property, plant and equipment, net                   $ 13,471   $ 10,029
Current maturities of long-term debt and capital
   lease liabilities                                 $    258   $      5
Accounts payable                                     $  1,091   $    812
Current obligation under natural gas delivery
   commitment                                        $    129   $    122
Long-term debt, net                                  $  3,285   $  4,368
Non-recourse debt                                    $  1,900   $     --
Long-term obligation under natural gas delivery
   commitment                                        $    282   $    411
Other deferred credits and liabilities               $  2,415   $  2,123
Minority interest                                    $  2,265   $    252
Trust Preferred Securities                           $    473   $    486
Stockholders' equity                                 $  4,774   $  3,523
- --------------------------------------------------   --------   --------


     The higher balance in trade receivables at December 31, 2000, compared with
December 31, 1999 reflected additional receivables resulting from higher sales
prices and an increase in production during the year. The increase in
receivables from joint ventures, partnerships and other was due to higher
mark-to-market adjustments in the oil and gas trading group, which are almost
entirely offset by higher mark-to-market adjustments included in accounts
payable. The increase in long-term receivables was due to the addition of notes
receivable from the Altura partners related to the acquisition of Altura. The
lower balance in equity investments primarily reflected the sale of the equity
investment in CanadianOxy in April 2000. The increase in the net

                                       23


balance in property, plant and equipment reflected the impact of capital
spending and the Altura and THUMS acquisitions, offset in part by depreciation,
depletion and amortization.
     The increase in accounts payable was due to higher mark-to-market
adjustments in the oil and gas trading group that are almost entirely offset by
mark-to-market adjustments in accounts receivable. The increase in current
maturities of long-term debt reflects debt maturities due in 2001. The decrease
in long-term debt primarily reflected debt repaid from the proceeds of the
CanadianOxy disposition, the monetization of the GOM assets and free cash flow,
as well as the reclassification of debt that matures in 2001 to current
maturities. The non-recourse debt was incurred as a result of the Altura
acquisition. The original balance of the non-recourse debt was approximately
$2.4 billion but Occidental paid down the debt by approximately $500 million
during the year from Altura's free cash flow. The long-term balance of the
obligations under the natural gas delivery commitment decreased from December
31, 1999, which reflected a portion of the obligation that is due within one
year and is shown as a current liability. Other deferred credits and liabilities
includes deferred compensation, primarily other post-employment benefits related
to the adoption of Statement of Financial Accounting Standards ("SFAS") No. 106,
environmental reserves, contract advances, deferred revenue and other deferred
items. The increase in this account was primarily the result of the increase in
deferred revenue from the GOM monetization. The increase in minority interest
was the result of the preferred limited interest retained by the Altura
partners. The increase in stockholders' equity primarily reflected net income,
partially offset by dividends on common stock.
     The table below presents principal amounts by currency by year of maturity
for Occidental's long-term debt obligations, excluding $16 million in
unamortized discount, at December 31, 2000:

DEBT CURRENCY DENOMINATIONS AND INTEREST RATES
In millions of U.S. dollars, except rates



                             U.S. Dollar     U.S. Dollar
Year of Maturity              Fixed Rate   Variable Rate     Grand Total(a)
========================   =============   =============   =============
                                                  
2002                       $         201   $          60   $         261
2003                                 514             300             814
2004                                 325             300             625
2005                                 177           1,268           1,445
2006                                   2               0               2
Thereafter                         1,939             115           2,054
                           -------------   -------------   -------------
Total                      $       3,158   $       2,043   $       5,201
                           =============   =============   =============
Average interest rate              7.90%           7.48%           7.74%
========================   =============   =============   =============

(a)  Excludes $16 million of unamortized discounts.

     The estimated fair value of Occidental's long-term debt at December 31,
2000 was $6.1 billion. Occidental has the option to call certain issues of
long-term debt prior to their maturity dates.
     On December 20, 2000, Occidental redeemed all $270 million of its
outstanding floating rate extendible notes due 2008 at par.
     During the third and fourth quarters of 2000, Occidental repurchased some
of its outstanding public debt securities in open market transactions, with
principal balances totaling $154 million, at current market prices. Occidental
recorded an after-tax extraordinary gain of $1 million that resulted from these
purchases.
     On June 1, 2000, Occidental redeemed all of its outstanding 11-1/8 percent
senior debentures due June 1, 2019, at a redemption price of 100 percent of the
principal amount thereof. The outstanding aggregate principal amount of the
debentures, which were issued on May 15, 1989, was $75 million.
     In December 1999, Occidental repurchased for cash, $240 million principal
amount of its 10.125 percent Senior Notes due November 15, 2001, and $138
million principal amount of its 11.125 percent Senior Notes due August 1, 2010
and redeemed all of OXY USA's $274 million principal amount of 7 percent
debentures due 2011, for a total of $722 million, including premium, expenses
and accrued interest. Occidental recorded an after-tax extraordinary loss of
$104 million in the fourth quarter of 1999 related to these transactions.
     In September 1999, Occidental redeemed $250 million of its 8.5 percent
medium-term notes due 2004 at par.
     In August 1999, Occidental called for redemption all of the outstanding
shares of its $3.00 cumulative CXY-indexed convertible preferred stock. Holders
of 3,125,837 shares of such preferred stock converted their shares into
approximately 9.9 million shares of Occidental common stock. Occidental redeemed
the remaining outstanding shares in September 1999.
     In June 1999, Occidental registered a shelf registration statement for up
to $1 billion of its senior debt securities, subordinated debt securities,
preferred stock, depositary shares, preferred securities of two subsidiary
trusts and Occidental's guarantees of such preferred securities. Occidental may
issue, at its option, the entire $1 billion under its medium-term notes program,
which includes its Medium-Term Senior Notes, Series C and its Medium-Term
Subordinated Notes, Series A. At December 31, 2000, no notes were issued and
outstanding under the program.
     Also in June 1999, Occidental redeemed $68.7 million of its 11.125 percent
senior debentures due June 1, 2019, at a redemption price of 105.563 percent of
the principal amount thereof. Occidental recorded an after-tax extraordinary
loss of $3 million in the second quarter of 1999 related to the redemption.
     In February 1999, Occidental issued $450 million of 7.65 percent senior
notes due 2006 and $350 million of 8.45 percent senior notes due 2029 for net
proceeds of approximately $792 million. The net proceeds were used for general
corporate purposes, which included the repayment of commercial paper and the
redemption of other debt.
     In January 1999, Occidental issued $525 million of 8.16 percent Trust
Preferred Securities due in 2039, and callable in 2004, for net proceeds of $508
million. The net proceeds were used to repay commercial paper. The Trust
Preferred Securities balance reflects the issuance

                                       24


of preferred securities, net of unamortized issue costs and repurchases.
     At December 31, 2000, Occidental had available approximately $2.1 billion
of committed credit lines, which are utilized, as needed, for daily operating
and other purposes. These lines of credit are primarily used to back up the
issuance of commercial paper.
     Occidental expects to have sufficient cash in 2001 for its operating needs,
capital expenditure requirements, dividend payments and mandatory debt
repayments.

ACQUISITIONS, DISPOSITIONS AND COMMITMENTS

2000
MILNE POINT ASSET SWAP
     On December 4, 2000, Occidental completed an agreement with BP to obtain
BP's interest in a carbon dioxide field in New Mexico and related pipelines in
exchange for Occidental's interest in the Milne Point oil field in Alaska,
together with additional cash consideration. The gain on this transaction was
not significant.

OXYMAR PURCHASE
     On November 29, 2000, an OxyChem subsidiary purchased a 28.6 percent
interest in OxyMar, a Texas general partnership that owns the Ingleside, Texas
VCM facility operated by OxyChem. The interest was purchased from U.S. VCM
Corporation, an affiliate of Marubeni Corporation, which continues to own a 21.4
percent interest and remains a 50 percent partner for corporate governance
purposes. OxyVinyls owns the remaining 50 percent interest.

ECUADOR FARM OUT TO AEC
     On November 1, 2000, Occidental agreed to farm out a partial economic
interest in its Block 15 operations in Ecuador to AEC. AEC will earn a 40
percent interest in the block and will assume certain capital costs through
2004. Occidental will remain the operator of Block 15. The gain on this
transaction was not significant.

SALE OF DUREZ
     On November 1, 2000, Occidental completed the sale of its Durez phenolic
resins and compounding businesses and assets to Sumitomo Bakelite Co., Ltd. for
net after-tax proceeds of approximately $120 million. There was a $13 million
after-tax gain on this transaction.

GULF OF MEXICO ASSETS MONETIZED
     On August 15, 2000, Occidental completed agreements with respect to two
transactions with Apache Corporation ("Apache") involving Occidental's interests
in the Continental Shelf of the GOM. Occidental entered into a transaction to
deliver, over four years, substantially all of its share of future gas
production from these GOM interests to Apache for approximately $280 million.
Occidental also agreed to sell an interest in the subsidiary that holds the GOM
assets for approximately $62 million, with an option for Apache to purchase
additional interests for $44 million over the next four years. As a result of
these transactions, and the consequent elimination of a portion of Occidental's
responsibility for abandonment liabilities, Occidental recorded an after-tax
gain of $39 million.

SALE OF PERU PROPERTIES
     On May 8, 2000, Occidental completed an agreement to sell its producing
properties in Peru to Pluspetrol. In connection with this transaction,
Occidental recorded an after-tax charge of approximately $29 million in December
1999 to write-down the properties to their fair values.

THUMS ACQUISITION
     On April 24, 2000, Occidental completed the acquisition of THUMS, an oil
producing entity, for approximately $68 million. The acquisition added
approximately 95 million barrels of net oil reserves and approximately 25,000
barrels per day of net oil production to Occidental's growing California
operations.

ALTURA ACQUISITION
     On April 19, 2000, Occidental completed its acquisition of all of the
common interest in Altura, the largest oil producer in Texas. Occidental,
through its subsidiaries, paid approximately $1.2 billion to the sellers,
affiliates of BP Amoco plc and Shell Oil Company, to acquire the common limited
partnership interest and control of the general partner which manages, operates
and controls 100 percent of the Altura assets. The partnership borrowed
approximately $2.4 billion, which has recourse only to the Altura assets. The
partnership also loaned approximately $2.0 billion to affiliates of the sellers,
evidenced by two notes, which provide credit support to the partnership. The
sellers retained a preferred limited partnership interest of approximately $2.0
billion and are entitled to certain distributions from the partnership. The
acquisition is valued at approximately $3.6 billion. Proved reserves at Altura
were 882 million barrels of oil equivalent at December 31, 2000.

SALE OF CANADIANOXY INVESTMENT
     On April 18, 2000, Occidental completed the sale of its 29.2 percent stake
in CanadianOxy for gross proceeds of approximately $1.2 billion Canadian. Of
Occidental's 40.2 million shares of CanadianOxy, 20.2 million were sold to the
Ontario Teachers Pension Plan Board and 20 million to CanadianOxy. In addition,
Occidental and CanadianOxy exchanged their respective 15 percent interests in
joint businesses of approximately equal value, resulting in Occidental owning
100 percent of an oil and gas operation in Ecuador and CanadianOxy owning 100
percent of sodium chlorate operations in Canada and Louisiana. After-tax
proceeds from the CanadianOxy disposition together with tax benefits from the
disposition of the Peru producing properties totaled approximately $700 million.

                                       25


1999
ASSET SWAP WITH EOG
     In December 1999, Occidental and EOG Resources, Inc. ("EOG") exchanged
certain oil and gas assets. Occidental received producing properties and
exploration acreage in its expanding California asset base, as well as producing
properties in the western Gulf of Mexico near existing operations, in exchange
for oil and gas production and reserves in east Texas. The exchange increased
Occidental's exploration acreage in California from approximately 89,000 acres
to approximately 850,000 acres.
     Occidental also farmed out Oklahoma panhandle properties to EOG, retaining
a carried interest, and expects to benefit from EOG's drilling program.
Occidental was not planning on drilling this acreage and, under this program,
EOG will fund all the capital and Occidental will share in the results.

INDSPEC ACQUISITION
     In the third quarter of 1999, Occidental acquired the remaining ownership
of INDSPEC through the issuance of approximately 3.2 million shares of
Occidental common stock at an estimated value of approximately $68 million and
the assumption of approximately $80 million of bank debt. As a result of the
transactions, Occidental owns 100 percent of the stock of INDSPEC.

YEMEN ASSET SWAP WITH UNOCAL
     In the third quarter of 1999, Occidental acquired oil and gas interests in
Yemen from Unocal International Corporation ("UNOCAL") and UNOCAL acquired
Occidental's properties in Bangladesh. The results, after tax benefits, did not
have a significant impact on earnings.

OXYVINYLS PARTNERSHIP
     Effective April 30, 1999, Occidental and PolyOne formed two partnerships.
Occidental has a 76 percent interest in OxyVinyls, the PVC commodity resin
partnership, which is the larger of the partnerships, and a 10 percent interest
in a PVC powder compounding partnership. OxyVinyls also has entered into
long-term agreements to supply PVC resin to PolyOne and VCM to Occidental and
PolyOne. In addition, Occidental sold its pellet compounding plant in Pasadena,
Texas and its vinyl film assets in Burlington, New Jersey to PolyOne. As part of
the transaction, PolyOne received $104 million through the retention of working
capital and the distribution of cash from OxyVinyls, and OxyVinyls undertook
approximately $180 million in obligations, for certain PolyOne plant facilities,
which are treated as operating leases for accounting purposes. Occidental did
not record a significant gain or loss on the transaction.

1998
GAS PRESALE
     In November 1998, Occidental entered into a natural gas delivery commitment
for proceeds of $500 million, which obligates Occidental to deliver 263 billion
cubic feet of natural gas over a four-year period beginning in 2000. The imputed
interest rate in the transaction is approximately 6 percent. In connection with
this transaction, Occidental simultaneously entered into a natural gas price
swap with a third party based on identical volumes of natural gas and a delivery
schedule that corresponds to the natural gas delivery commitment.

EQUISTAR
     In May 1998, Occidental contributed its ethylene, propylene, ethylene oxide
("EO"), ethylene glycol and EO derivatives businesses to Equistar, in return for
a 29.5 percent interest in the partnership, receipt of approximately $420
million in cash and the assumption by Equistar of approximately $205 million of
Occidental capital lease liabilities. Occidental guaranteed $625 million of
Equistar's debt related to these amounts. Lyondell Petrochemical Company
("Lyondell") and Millennium Chemicals, Inc. ("Millennium"), through their
respective subsidiaries, were the original partners of Equistar. Lyondell owns
41 percent of Equistar, and Occidental and Millennium each own 29.5 percent.

ELK HILLS ACQUISITION
     In February 1998, Occidental acquired the U.S. government's approximate 78
percent interest in the Elk Hills field for approximately $3.5 billion.

ASSET SALES PROGRAM
     In 1998, Occidental completed a number of international and domestic asset
sales as part of an asset redeployment program. Net proceeds from all major
nonstrategic oil and gas asset sales were $1.1 billion, and the total net
pre-tax gain was $532 million, which is included in the total gains from
disposition of assets of $546 million.

ROYAL DUTCH/SHELL ASSET SWAP
     Additionally in 1998, Occidental and the Royal Dutch/Shell Group ("Shell")
exchanged Occidental's oil and gas interests in the Philippines and Malaysia for
Shell's oil and gas interests in Yemen and Colombia. Shell also received a cash
payment of approximately $89 million. No gain or loss was recorded on the
transaction.

SALE OF MIDCON
     Occidental completed the sale of all of the issued and outstanding shares
of common stock and a related note of MidCon, its natural gas transmission and
marketing business, to KN Energy, Inc. ("KN Energy"), on January 31, 1998 for a
cash payment of $2.1 billion. The estimated net cash proceeds from the
transaction were approximately $1.7 billion. Additionally, KN Energy issued a
fixed-rate interest bearing note, which was repaid on January 4, 1999, to
Occidental in the amount of $1.4 billion, in exchange for a note previously
issued to Occidental by the MidCon Corp. ESOP Trust. MidCon retained
responsibility for certain Texas intrastate gas pipeline lease obligations to an
Occidental entity. In connection with the sale, the Cumulative MidCon-Indexed
Convertible Preferred Stock was redeemed.

                                       26


CAPITAL EXPENDITURES
     Commitments at December 31, 2000 for major capital expenditures during 2001
and thereafter were approximately $73 million. Total capital expenditures for
2001 are estimated to be approximately $1.1 billion. Occidental will fund these
commitments and capital expenditures with cash from operations and proceeds from
existing credit facilities as necessary.

DERIVATIVE ACTIVITIES
     Occidental's market risk exposures relate primarily to commodity prices,
interest rates and foreign currency. Therefore, Occidental periodically uses
commodity futures contracts, options and swaps to hedge the impact of oil and
natural gas price fluctuations; uses interest rate swaps and futures contracts
to hedge interest rates on debt; and uses forward exchange contracts to hedge
the risk associated with fluctuations in foreign currency exchange rates.
Emerging Issues Task Force ("EITF") Issue No. 98-10, Accounting for Contracts
Involved in Energy Trading and Risk Management Activities, was adopted in the
first quarter of 1999. Oil and gas trading contracts are measured at fair value
on the balance sheet date. Gains and losses on such contracts are recognized in
periodic income. Gains and losses on commodity futures contracts that qualify
for hedge accounting, essentially those associated with equity production or
purchases, are deferred until recognized as an adjustment to sales revenue or
purchase costs when the related transaction being hedged is finalized. Gains and
losses on foreign currency forward exchange contracts that hedge identifiable
future commitments are deferred until recognized when the related item being
hedged is settled. All other contracts are recognized in periodic income.
     At December 31, 2000, Occidental was a party to commodity exchange and
over-the-counter forward obligations. The financial instruments held for
purposes other than trading expire during the period from January 2001 to
December 2003, and relate to the hedging of natural gas and crude oil prices.
The fair value of these instruments at December 31, 2000 was $511 million.
Offsetting the value of these instruments are related physical positions with a
$528 million loss. The principal components of these instruments and related
physical positions are the related natural gas price swap and the natural gas
delivery commitment, which is discussed in Note 7 of the accompanying financial
statements. At December 31, 2000, the difference between the carrying value and
the fair value of these obligations was an unrealized loss of approximately $17
million, which is currently deferred. Any gain or loss will be recognized when
the related transactions are finalized. The financial instruments held or issued
for trading purposes mostly expire in 2001, with the exception of a long-term
sales contract that expires in 2010. The fair value of these instruments at
December 31, 2000 was $31 million. Offsetting the value of these instruments are
related physical positions with a $12 million loss. The approximate $19 million
net gain was reflected in the "Consolidated Statements of Operations." The
majority of the gain was from the mark-to-market adjustment of a long-term sales
contract under EITF Issue No. 98-10. The results of oil and gas trading
activities, excluding the long-term sales contract, were not significant.
     Interest rate swaps are entered into as part of Occidental's overall
strategy to maintain part of its debt on a floating-rate basis. All of
Occidental's remaining interest rate swaps converting fixed-rate debt to
floating-rate debt matured during November 2000. The swap rate difference
resulted in approximately $1 million of expense in 2000, less than $1 million of
income in 1999 and approximately $2 million of expense in 1998, compared to what
interest expense would have been had the debt remained at fixed rates. The
impact of the swaps on the weighted average interest rates for all debt in 2000,
1999 and 1998 was not significant. Occidental will continue its strategy of
maintaining part of its debt on a floating-rate basis.
     At December 31, 2000, Occidental was a party to a series of forward
interest rate locks that are required to be settled on or prior to December 31,
2002. These financial instruments relate to debt raised by a third party to
construct a co-generation plant that will be subject to a long-term operating
lease to an OxyChem affiliate. As the lease payments will be directly related to
the amount of interest paid on the underlying debt, the forward rate locks were
put in place to hedge the future lease payments. The lease payments are expected
to commence on or before December 31, 2002. The fair value of these financial
instruments at December 31, 2000 was an unrealized loss of $29 million.
     Occidental is exposed to interest rate risk with respect to its variable
rate $2.1 billion credit facilities. At December 31, 2000, there were no
outstanding aggregate balances under these credit facilities. Therefore, a
change in interest rates would have had no effect on Occidental's results of
operations.
     Many of Occidental's foreign oil and gas operations and foreign chemical
operations are located in countries whose currencies generally depreciate
against the U.S. dollar on a continuing basis. Generally, an effective currency
forward market does not exist for these countries; therefore, Occidental
attempts to manage its exposure primarily by balancing monetary assets and
liabilities and maintaining cash positions only at levels necessary for
operating purposes. Additionally, all of Occidental's oil and gas foreign
entities have the U.S. dollar as the functional currency since the cash flows
are mainly denominated in U.S. dollars. The effect of exchange rate transactions
in foreign currencies is included in periodic income. Foreign currencies that
are in a net liability position are thus protected from the unfavorable effects
of devaluation. However, in certain foreign chemical subsidiaries and equity
basis joint ventures where the local currency is the functional currency,
Occidental has exposure on joint-venture debt that is denominated in U.S.
dollars. For entities that have a net foreign currency asset position,
Occidental strives to maintain those positions at low levels to mitigate
exposure to currency devaluation.

                                       27


TAXES
     Deferred tax liabilities were $1.2 billion at December 31, 2000, net of
deferred tax assets of $845 million. The current portion of the deferred tax
assets of $117 million is included in prepaid expenses and other. The net
deferred tax assets are expected to be realized through future operating income
and reversal of taxable temporary differences.

LAWSUITS, CLAIMS, COMMITMENTS, CONTINGENCIES AND RELATED MATTERS
     Occidental and certain of its subsidiaries have been named as defendants or
as potentially responsible parties ("PRP's") in a substantial number of
lawsuits, claims and proceedings, including governmental proceedings under the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA")
and corresponding state acts. These governmental proceedings seek funding,
remediation and, in some cases, compensation for alleged property damage,
punitive damages and civil penalties, aggregating substantial amounts.
Occidental is usually one of many companies in these proceedings, and has to
date been successful in sharing response costs with other financially sound
companies. Occidental has accrued reserves at the most likely cost to be
incurred in those proceedings where it is probable that Occidental will incur
remediation costs which can be reasonably estimated. In December 1998, David
Croucher and others filed suit in the Federal District Court in Houston, Texas
on behalf of persons claiming to have been beneficiaries of the MidCon ESOP. The
suit has been certified as a class action. The plaintiffs allege that each of
the U.S. Trust Company of California (the "ESOP Trustee") and the MidCon ESOP
Administrative Committee breached its fiduciary duty to the plaintiffs by
failing to properly value the securities held by the ESOP, and allege that
Occidental actively participated in such conduct. The plaintiffs claim that, as
a result of this alleged breach, the ESOP participants are entitled to an
additional aggregate distribution of at least $200 million and that Occidental
has been unjustly enriched and is liable for failing to make that distribution.
In December 2000, the named plaintiffs and defendants reached a proposed
settlement of the action. This settlement provides for Occidental to pay the
class $25 million and fees and expenses of plaintiffs' counsel as awarded by the
Court. The Court has scheduled a hearing on March 15, 2001 to consider approving
the settlement. Occidental has adequate reserves.
     During the course of its operations, Occidental is subject to audit by
taxing authorities for varying periods in various tax jurisdictions.
     It is impossible at this time to determine the ultimate liabilities that
Occidental and its subsidiaries may incur resulting from the foregoing lawsuits,
claims and proceedings, audits, commitments, contingencies and related matters.
Several of these matters may involve substantial amounts, and if these were to
be ultimately resolved unfavorably to the full amount of their maximum potential
exposure, an event not currently anticipated, it is possible that such event
could have a material adverse effect upon Occidental's consolidated financial
position or results of operations. However, in management's opinion, after
taking into account reserves, it is unlikely that any of the foregoing matters
will have a material adverse effect upon Occidental's consolidated financial
position or results of operations.

ENVIRONMENTAL EXPENDITURES
     Occidental's operations in the United States are subject to stringent
federal, state and local laws and regulations relating to improving or
maintaining the quality of the environment. Foreign operations also are subject
to environmental protection laws. Costs associated with environmental compliance
have increased over time and may continue to rise in the future. Environmental
expenditures, related to current operations, are factored into the overall
business planning process. These expenditures are mainly considered an integral
part of production in manufacturing quality products responsive to market
demand.

ENVIRONMENTAL REMEDIATION
     The laws which require or address environmental remediation may apply
retroactively to previous waste disposal practices. And, in many cases, the laws
apply regardless of fault, legality of the original activities or ownership or
control of sites. Occidental is currently participating in environmental
assessments and cleanups under these laws at federal Superfund sites, comparable
state sites and other remediation sites, including Occidental facilities and
previously owned sites. Also, Occidental and certain of its subsidiaries have
been involved in a substantial number of governmental and private proceedings
involving historical practices at various sites including, in some instances,
having been named as defendants and/or as PRP's under the federal Superfund law.
These proceedings seek funding and/or remediation and, in some cases,
compensation for alleged personal injury or property damage, punitive damages
and civil penalties, aggregating substantial amounts.
     Occidental does not consider the number of Superfund and comparable state
sites at which it has been notified that it has been identified as being
involved to be a relevant measure of exposure. Although the liability of a PRP,
and in many cases its equivalent under state law, may be joint and several,
Occidental is usually one of many companies cited as a PRP at these sites and
has, to date, been successful in sharing cleanup costs with other financially
sound companies. Also, many of these sites are still under investigation by the
Environmental Protection Agency ("EPA") or the equivalent state agencies. Prior
to actual cleanup, the parties involved assess site conditions and
responsibility and determine the appropriate remedy. The majority of remediation
costs are incurred after the parties obtain EPA or equivalent state agency
approval to proceed. The ultimate future cost of remediation of certain of the
sites for which Occidental has been notified that it has been identified as
being involved cannot be reasonably determined at this time.

                                       28


     As of December 31, 2000, Occidental had been notified by the EPA or
equivalent state agencies or otherwise had become aware that it had been
identified as being involved at 125 Superfund or comparable state sites. (This
number does not include those sites where Occidental has been successful in
resolving its involvement.) The 125 sites include 34 former Diamond Shamrock
Chemical sites as to which Maxus Energy Corporation has retained all liability.
Of the remaining 91 sites, Occidental has denied involvement at 9 sites and has
yet to determine involvement in 20 sites. With respect to the remaining 62 of
these sites, Occidental is in various stages of evaluation, and the extent of
liability retained by Maxus Energy Corporation is disputed at 2 of these sites.
For 54 of these sites, where environmental remediation efforts are probable and
the costs can be reasonably estimated, Occidental has accrued reserves at the
most likely cost to be incurred. The 54 sites include 11 sites as to which
present information indicates that it is probable that Occidental's aggregate
exposure is insignificant. In determining the reserves, Occidental uses the most
current information available, including similar past experiences, available
technology, regulations in effect, the timing of remediation and cost-sharing
arrangements. For the remaining 8 of the 62 sites being evaluated, Occidental
does not have sufficient information to determine a range of liability, but
Occidental does have sufficient information on which to base the opinion
expressed above in the "Lawsuits, Claims, Commitments, Contingencies and Related
Matters" section of this "Management's Discussion and Analysis of Financial
Condition and Results of Operations." For management's opinion on lawsuits and
proceedings and on other environmental loss contingencies, see the above noted
section.

ENVIRONMENTAL COSTS
     Occidental's costs, some of which may include estimates, relating to
compliance with environmental laws and regulations are shown below for each
segment:



In millions                          2000       1999       1998
=============================    ========   ========   ========
                                              
OPERATING EXPENSES
   Oil and Gas                   $     23   $     13   $     15
   Chemical                            51         51         55
                                 --------   --------   --------
                                 $     74   $     64   $     70
                                 ========   ========   ========
CAPITAL EXPENDITURES
   Oil and Gas                   $     20   $     19   $     31
   Chemical                            18         17         25
                                 --------   --------   --------
                                 $     38   $     36   $     56
                                 ========   ========   ========
ENVIRONMENTAL RESERVES
   Corporate                     $    402   $    454   $    578
=============================    ========   ========   ========


     Operating expenses are incurred on a continual basis. Remediation expenses
relate to existing conditions caused by past operations and do not contribute to
current or future revenue generation. Occidental did not incur any additional
remediation expenses in 2000, 1999 and 1998. Capital expenditures relate to
longer lived improvements in facilities. Although total costs may vary in any
one year, over the long term, segment operating and capital expenditures for
environmental compliance generally are expected to increase. The environmental
reserves, as shown in the table above, have been provided for environmental
remediation liabilities at the Superfund and comparable state sites discussed
above, and for Resource Conservation and Recovery Act and other sites where
Occidental has environmental remediation responsibility. The net decrease in
environmental reserves reflects payments for remediation programs and settlement
agreements.
     Occidental manages its environmental remediation efforts through a wholly
owned subsidiary, Glenn Springs Holdings, Inc. ("GSH"). In 1998, GSH was given
full management authority over all remediation sites and reports directly to
Occidental's corporate management.

FOREIGN INVESTMENTS
     Portions of Occidental's assets outside North America are exposed to
political and economic risks. Occidental conducts its financial affairs so as to
mitigate its exposure against such risks. At December 31, 2000, the carrying
value of Occidental's assets in countries outside North America aggregated
approximately $1.8 billion, or approximately 10 percent of Occidental's total
assets at that date. Of such assets, approximately $1.2 billion was located in
the Middle East, approximately $428 million was located in Latin America, and
substantially all of the remainder were located in Russia and Pakistan.

ACCOUNTING CHANGES
EITF ISSUE NO. 00-10
     In the fourth quarter of 2000, Occidental adopted the provisions of EITF
Issue No. 00-10, Accounting for Shipping and Handling Fees and Costs, which
establishes accounting and reporting standards for the treatment of shipping and
handling costs. Among its provisions, EITF Issue No. 00-10 requires that
transportation costs that had been accounted for as deductions from revenues
should now be recorded as an expense. The implementation of EITF Issue No. 00-10
had no effect on net income. All prior year balances have been adjusted to
reflect this accounting change. The transportation costs that have been removed
as deductions from revenues and included in cost of sales on Occidental's
Statements of Operations totaled $245 million in 2000, $210 million in 1999 and
$209 million in 1998.

SFAS NO. 140
     In the fourth quarter of 2000, Occidental adopted the disclosure provisions
of SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities - a Replacement of FASB Statement No. 125, which
revises disclosure standards for asset securitizations and other financial asset
transfers. SFAS No. 140 also contains provisions which revise certain criteria
for accounting for securitizations, financial-asset transfers and collateral.
These accounting provisions will be adopted by Occidental on April 1, 2001. The
implementation of all of the

                                       29


provisions of SFAS No. 140 will not have an impact on Occidental's consolidated
financial positions or results of operations.

SFAS NOS. 138, 137 AND 133
     SFAS No. 133, Accounting for Derivative Instruments and Hedging, as amended
by SFAS 137, Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133, and SFAS 138,
Accounting for Certain Derivative Instruments and Certain Hedging Activities, is
effective for Occidental as of January 1, 2001. These statements establish
accounting and reporting standards for derivative instruments and hedging
activities and require an entity to recognize all derivatives in the statement
of financial position and measure those instruments at fair value. Changes in
the derivative instrument's fair value must be recognized in earnings unless
specific hedge accounting criteria are met. Adoption of these new accounting
standards will result in cumulative after-tax reductions in net income of
approximately $24 million and other comprehensive income of approximately $27
million in the first quarter of 2001. The adoption will also increase total
assets by $588 million and total liabilities by $639 million on the balance
sheet.

SAB NO. 101
     In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial
Statements. SAB No. 101 summarizes the Staff's views in applying generally
accepted accounting principles to revenue recognition in the financial
statements. The bulletin was effective in the fourth quarter of 2000. Occidental
was in compliance with these standards; accordingly, the adoption of SAB No. 101
did not have an impact on its consolidated financial statements.

EITF ISSUE NO. 98-10
     Effective January 1, 1999, Occidental adopted the provisions of EITF Issue
No. 98-10, Accounting for Contracts Involved in Energy Trading and Risk
Management Activities, which establishes accounting and reporting standards for
certain energy trading contracts. EITF Issue No. 98-10 requires that energy
trading contracts must be marked-to-market with gains and losses included in
earnings and separately disclosed in the financial statements or footnotes
thereto. The initial adoption of EITF Issue No. 98-10 resulted in a first
quarter noncash after-tax benefit of $2 million, recorded as a cumulative effect
of a change in accounting principle in 1999.

SOP NO. 98-5
     Effective January 1, 1999, Occidental adopted the provisions of American
Institute of Certified Public Accountants Statement of Position ("SOP") 98-5,
Reporting on the Costs of Start-Up Activities, which requires that costs of
start-up activities, including organizational costs, be expensed as incurred.
The initial application of the statement resulted in a charge to income for
costs of previously capitalized start-up activities that have not yet been fully
amortized. The initial adoption of SOP 98-5 resulted in a first quarter noncash
after-tax charge of $15 million, net of $8 million in taxes, which has been
recorded as a cumulative effect of a change in accounting principle.

SAFE HARBOR STATEMENT REGARDING OUTLOOK AND OTHER FORWARD-LOOKING DATA
     Portions of this report, including Items 1 and 2 and the information
appearing under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations," including the information under the
sub-caption "2001 Outlook," contain forward-looking statements and involve risks
and uncertainties that could significantly 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; competitive pricing pressures; higher than
expected costs including feedstocks; crude oil and natural gas prices; chemical
prices; potential liability for remedial actions under existing or future
environmental regulations and litigation; potential liability resulting from
pending or future litigation; general domestic and international political
conditions; potential disruption or interruption of Occidental's production or
manufacturing facilities due to accidents or political events; potential failure
to achieve expected production from existing and future oil and gas development
projects; the supply/demand considerations for Occidental's products; any
general economic recession domestically or internationally; regulatory
uncertainties; and not successfully completing, or any material delay of, any
development of new fields, expansion, capital expenditure, efficiency
improvement, acquisition or disposition. Forward-looking statements are
generally accompanied by words such as "estimate", "project", "predict",
"believes" or "expect", that convey the uncertainty of future events or
outcomes. Occidental undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed might not occur.

REPORT OF MANAGEMENT
     The management of Occidental Petroleum Corporation is responsible for the
integrity of the financial data reported by Occidental and its subsidiaries.
Fulfilling this responsibility requires the preparation and presentation of
consolidated financial statements in accordance with generally accepted
accounting principles. Management uses internal accounting controls,
corporate-wide policies and procedures and judgment so that such statements
reflect fairly the consolidated financial position, results of operations and
cash flows of Occidental.

                                       30



ITEM 8    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors, Occidental Petroleum Corporation:

     We have audited the accompanying consolidated balance sheets of OCCIDENTAL
PETROLEUM CORPORATION (a Delaware corporation) and consolidated subsidiaries as
of December 31, 2000 and 1999, and the related consolidated statements of
operations, stockholders' equity, comprehensive income and cash flows for each
of the three years in the period ended December 31, 2000 (included on pages 32
through 60). These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Occidental Petroleum
Corporation and consolidated subsidiaries as of December 31, 2000 and 1999, and
the results of their operations and their cash flows for each of the three years
in the period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States.
     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the exhibit index
of financial statements is presented for purposes of complying with the
Securities and Exchange Commissions rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.


/s/ ARTHUR ANDERSEN LLP

ARTHUR ANDERSEN LLP
Los Angeles, California
February 7, 2001

                                       31




CONSOLIDATED STATEMENTS OF OPERATIONS                                     Occidental Petroleum Corporation
In millions, except per-share amounts                                                     and Subsidiaries

For the years ended December 31,                                              2000        1999        1998
======================================================================   =========   =========   =========
                                                                                        
REVENUES
    Net sales                                                            $  13,574   $   7,820   $   6,805
    Interest, dividends and other income                                       263         913         261
    Gains (losses) on disposition of assets, net                               639         (13)        546
    Income (loss) from equity investments                                       67          41         (22)
                                                                         ---------   ---------   ---------
                                                                            14,543       8,761       7,590
                                                                         ---------   ---------   ---------

COSTS AND OTHER DEDUCTIONS
    Cost of sales                                                            8,963       5,269       4,671
    Selling, general and administrative and other operating expenses           691         645         678
    Write-down of assets                                                       180         212          30
    Depreciation, depletion and amortization of assets                         901         805         835
    Minority interest                                                          185          58           1
    Exploration expense                                                         94          75         128
    Interest and debt expense, net                                             518         498         559
                                                                         ---------   ---------   ---------
                                                                            11,532       7,562       6,902
                                                                         ---------   ---------   ---------

INCOME FROM CONTINUING OPERATIONS BEFORE TAXES                               3,011       1,199         688
Provision for domestic and foreign income and other taxes                    1,442         631         363
                                                                         ---------   ---------   ---------

INCOME FROM CONTINUING OPERATIONS                                            1,569         568         325
Discontinued operations, net                                                    --          --          38
Extraordinary gain(loss), net                                                    1        (107)         --
Cumulative effect of changes in accounting principles, net                      --         (13)         --
                                                                         ---------   ---------   ---------

NET INCOME                                                                   1,570         448         363
Effect of repurchase of Trust Preferred Securities                               1           1          --
Preferred dividends                                                             --          (7)        (17)
                                                                         ---------   ---------   ---------
EARNINGS APPLICABLE TO COMMON STOCK                                      $   1,571   $     442   $     346
                                                                         =========   =========   =========

BASIC EARNINGS PER COMMON SHARE
    Income from continuing operations                                    $    4.26   $    1.58   $     .88
    Discontinued operations, net                                                --          --         .11
    Extraordinary loss, net                                                     --        (.30)         --
    Cumulative effect of changes in accounting principles, net                  --        (.04)         --
                                                                         ---------   ---------   ---------

BASIC EARNINGS PER COMMON SHARE                                          $    4.26   $    1.24   $     .99
                                                                         =========   =========   =========

DILUTED EARNINGS PER COMMON SHARE                                        $    4.26   $    1.24   $     .99
======================================================================   =========   =========   =========

The accompanying notes are an integral part of these financial statements.

                                       32




CONSOLIDATED BALANCE SHEETS                                                Occidental Petroleum Corporation
In millions, except share amounts                                                          and Subsidiaries

Assets at December 31,                                                                     2000        1999
===================================================================================   =========   =========
                                                                                            
CURRENT ASSETS
    Cash and cash equivalents                                                         $      97   $     214

    Trade receivables, net of reserves of $25 in 2000 and $24 in 1999                       809         559

    Receivables from joint ventures, partnerships and other                                 517         215

    Inventories                                                                             485         503

    Prepaid expenses and other                                                              159         197
                                                                                      ---------   ---------

      TOTAL CURRENT ASSETS                                                                2,067       1,688
                                                                                      ---------   ---------


LONG-TERM RECEIVABLES, NET                                                                2,119         168
                                                                                      ---------   ---------


EQUITY INVESTMENTS
                                                                                          1,327       1,754
                                                                                      ---------   ---------


PROPERTY, PLANT AND EQUIPMENT, AT COST

    Oil and gas segment                                                                  14,084      11,106

    Chemical segment                                                                      3,990       4,062

    Corporate and other                                                                   1,438       1,451
                                                                                      ---------   ---------
                                                                                         19,512      16,619

    Accumulated depreciation, depletion and amortization                                 (6,041)     (6,590)
                                                                                      ---------   ---------
                                                                                         13,471      10,029




OTHER ASSETS                                                                                430         486
                                                                                      ---------   ---------
                                                                                      $  19,414   $  14,125
===================================================================================   =========   =========

The accompanying notes are an integral part of these financial statements.

                                       33




CONSOLIDATED BALANCE SHEETS                                                Occidental Petroleum Corporation
In millions, except share amounts                                                          and Subsidiaries

Liabilities and Equity at December 31,                                                     2000        1999
===================================================================================   =========   =========
                                                                                            
CURRENT LIABILITIES
    Current maturities of long-term debt and capital lease liabilities                $     258   $       5
    Notes payable                                                                             2          29
    Accounts payable                                                                      1,091         812
    Accrued liabilities                                                                   1,089         738
    Dividends payable                                                                        93          93
    Obligation under natural gas delivery commitment                                        129         122
    Domestic and foreign income taxes                                                        78         168
                                                                                      ---------   ---------
      TOTAL CURRENT LIABILITIES                                                           2,740       1,967
                                                                                      ---------   ---------

LONG-TERM DEBT, NET OF CURRENT MATURITIES AND UNAMORTIZED DISCOUNT                        3,285       4,368
                                                                                      ---------   ---------

NON-RECOURSE DEBT                                                                         1,900          --
                                                                                      ---------   ---------

DEFERRED CREDITS AND OTHER LIABILITIES
    Deferred and other domestic and foreign income taxes                                  1,280         995
    Obligation under natural gas delivery commitment                                        282         411
    Other                                                                                 2,415       2,123
                                                                                      ---------   ---------
                                                                                          3,977       3,529
                                                                                      ---------   ---------

CONTINGENT LIABILITIES AND COMMITMENTS

MINORITY INTEREST                                                                         2,265         252
                                                                                      ---------   ---------

OCCIDENTAL OBLIGATED MANDATORILY REDEEMABLE
      TRUST PREFERRED SECURITIES OF A SUBSIDIARY
      TRUST HOLDING SOLELY SUBORDINATED NOTES OF
      OCCIDENTAL                                                                            473         486
                                                                                      ---------   ---------

STOCKHOLDERS' EQUITY
    Nonredeemable preferred stock; $1.00 par value, authorized 50 million shares;
        outstanding shares:  2000 and 1999--none                                             --          --
    Common stock, $.20 par value; authorized 500 million shares;
        outstanding shares:  2000--369,984,447 and 1999--367,916,297                         74          73
    Additional paid-in capital                                                            3,743       3,787
    Retained earnings(deficit)                                                            1,007        (286)
    Accumulated other comprehensive income                                                  (50)        (51)
                                                                                      ---------   ---------
                                                                                          4,774       3,523
                                                                                      ---------   ---------
                                                                                      $  19,414   $  14,125
===================================================================================   =========   =========

The accompanying notes are an integral part of these financial statements.

                                       34




CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                                                  Occidental Petroleum Corporation
In millions                                                                                                      and Subsidiaries

                                                                                                                           Accum-
                                                                                                                           ulated
                                                     Non-                                                                   Other
                                               Redeemable        ESOP    Unearned              Additional    Retained     Compre-
                                                Preferred   Preferred        ESOP      Common     Paid-in    Earnings     hensive
                                                    Stock       Stock      Shares       Stock     Capital   (Deficit)      Income
=============================================  ==========  ==========  ==========  ==========  ==========  ==========  ==========
                                                                                                  
BALANCE, DECEMBER 31, 1997                     $    1,125  $    1,400  $   (1,348) $       68  $    4,149  $   (1,097) $      (11)
    Net income                                         --          --          --          --          --         363          --
    Other comprehensive income, net of tax             --          --          --          --          --          --         (18)
    Dividends on common stock                          --          --          --          --        (354)         --          --
    Dividends on preferred stock                       --          --          --          --         (17)         --          --
    Issuance of common stock                           --          --          --          --          28          --          --
    Release/Retirement of ESOP shares                  --      (1,400)      1,348          --          52          --          --
    Repurchase and retirement of common stock          --          --          --          (7)       (930)         --          --
    Preferred stock conversions                      (882)         --          --           8         874          --          --
    Exercises of options and other, net                --          --          --          --          12          --          --
- ---------------------------------------------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
BALANCE, DECEMBER 31, 1998                     $      243  $       --  $       --  $       69  $    3,814  $     (734) $      (29)
    Net income                                         --          --          --          --          --         448          --
    Other comprehensive income, net of tax             --          --          --          --          --          --         (22)
    Dividends on common stock                          --          --          --          --        (358)         --          --
    Dividends on preferred stock                       --          --          --          --          (7)         --          --
    Issuance of common stock                           --          --          --           1          88          --          --
    Preferred stock conversions/redemptions          (243)         --          --           3         240          --          --
    Exercises of options and other, net                --          --          --          --          10          --          --
- ---------------------------------------------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
BALANCE, DECEMBER 31, 1999                     $       --  $       --  $       --  $       73  $    3,787  $     (286) $      (51)
    Net income                                         --          --          --          --          --       1,570          --
    Other comprehensive income, net of tax             --          --          --          --          --          --           1
    Dividends on common stock                          --          --          --          --         (92)       (277)         --
    Issuance of common stock                           --          --          --           1          40          --          --
    Exercises of options and other, net                --          --          --          --           8          --          --
- ---------------------------------------------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
BALANCE, DECEMBER 31, 2000                     $       --  $       --  $       --  $       74  $    3,743  $    1,007  $      (50)
=============================================  ==========  ==========  ==========  ==========  ==========  ==========  ==========


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
In millions



For the years ended December 31,                             2000        1999        1998
=====================================================   =========   =========   =========
                                                                       
Net income                                              $   1,570   $     448   $     363
    Other comprehensive income items:
      Foreign currency translation adjustments                  2         (23)        (14)
      Minimum pension liability adjustment                      2          --          --
      Other                                                    (3)          1          (4)
                                                        ---------   ---------   ---------
    Other comprehensive income, net of tax                      1         (22)        (18)
                                                        ---------   ---------   ---------
Comprehensive income                                    $   1,571   $     426   $     345
=====================================================   =========   =========   =========

The accompanying notes are an integral part of these financial statements.

                                       35




CONSOLIDATED STATEMENTS OF CASH FLOWS                                                      Occidental Petroleum Corporation
In millions                                                                                                and Subsidiaries

For the years ended December 31,                                                               2000        1999        1998
=======================================================================================   =========   =========   =========
                                                                                                         
CASH FLOW FROM OPERATING ACTIVITIES
    Income from continuing operations                                                     $   1,569   $     568   $     325
    Adjustments to reconcile income to net cash provided by operating activities:
        Depreciation, depletion and amortization of assets                                      901         805         835
        Amortization of debt discount and deferred financing costs                                7          12          22
        Deferred income tax provision                                                           413         183         275
        Other noncash charges to income                                                         170         275          10
        Gains on disposition of assets, net and litigation settlement                          (639)       (762)       (546)
        (Income)loss from equity investments                                                    (67)        (41)         22
        Exploration expense                                                                      94          75         128
    Changes in operating assets and liabilities:
        (Increase)decrease in accounts and notes receivable                                    (201)       (269)         54
        (Increase)decrease in inventories                                                       (39)         27         (43)
        Decrease(increase) in prepaid expenses and other assets                                  34          13         (65)
        Increase(decrease) in accounts payable and accrued liabilities                          367          90        (176)
        (Decrease)increase in current domestic and foreign income taxes                         (53)        263        (242)
    Other operating, net                                                                       (155)       (195)       (275)
                                                                                          ---------   ---------   ---------
                                                                                              2,401       1,044         324
    Operating cash flow from discontinued operations                                             --          --        (244)
                                                                                          ---------   ---------   ---------
        NET CASH PROVIDED BY OPERATING ACTIVITIES                                             2,401       1,044          80
                                                                                          ---------   ---------   ---------

CASH FLOW FROM INVESTING ACTIVITIES
    Capital expenditures                                                                       (952)       (601)     (1,074)
    Sale of businesses and disposal of property, plant and equipment, net                     1,488          52       3,378
    Proceeds from litigation settlement                                                          --         775          --
    Collection of note receivable                                                                --       1,395          --
    Buyout of operating leases                                                                   --         (17)        (41)
    Purchase of businesses, net                                                              (3,715)       (127)     (3,528)
    Dividends from equity investments and other, net                                             82         114          55
                                                                                          ---------   ---------   ---------
                                                                                             (3,097)      1,591      (1,210)
    Investing cash flow from discontinued operations                                             --          --          (6)
                                                                                          ---------   ---------   ---------
        NET CASH(USED)PROVIDED BY INVESTING ACTIVITIES                                       (3,097)      1,591      (1,216)
                                                                                          ---------   ---------   ---------

CASH FLOW FROM FINANCING ACTIVITIES
    Proceeds from long-term debt and non-recourse debt                                        2,447         835       1,775
    (Repayments of)proceeds from commercial paper and revolving credit agreements, net           --      (2,201)        811
    Payments of long-term debt, non-recourse debt and capital lease liabilities              (1,389)     (1,305)       (679)
    Proceeds from issuance of common stock                                                       41          21          29
    Proceeds from issuance of Trust Preferred Securities                                         --         508          --
    Repurchase of Trust Preferred Securities                                                    (12)        (21)         --
    Proceeds from natural gas delivery commitment                                                --          --         500
    Purchases for natural gas delivery commitment                                              (115)         --          --
    (Payments)proceeds of notes payable, net                                                    (25)          9          (4)
    Repurchase of common stock                                                                   --          --        (937)
    Cash dividends paid                                                                        (369)       (363)       (387)
    Other financing, net                                                                          1          --          11
                                                                                          ---------   ---------   ---------
        NET CASH PROVIDED(USED) BY FINANCING ACTIVITIES                                         579      (2,517)      1,119
                                                                                          ---------   ---------   ---------
(DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS                                                (117)        118         (17)
CASH AND CASH EQUIVALENTS--BEGINNING OF YEAR                                                    214          96         113
                                                                                          ---------   ---------   ---------
CASH AND CASH EQUIVALENTS--END OF YEAR                                                    $      97   $     214   $      96
=======================================================================================   =========   =========   =========

The accompanying notes are an integral part of these financial statements.

                                       36


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS      Occidental Petroleum Corporation
                                                                and Subsidiaries

NOTE 1    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
PRINCIPLES OF CONSOLIDATION
     The consolidated financial statements include the accounts of Occidental
Petroleum Corporation, all entities where Occidental has majority ownership of
voting interests and Occidental's proportionate interests in oil and gas
exploration and production ventures. All material intercompany accounts and
transactions have been eliminated. Investments in less than majority-owned
enterprises, except for oil and gas exploration and production ventures, are
accounted for on the equity method (see Note 15).
     In addition, certain financial statements, notes and supplementary data for
prior years have been changed to conform to the 2000 presentation.

NATURE OF OPERATIONS
     Occidental is a multinational organization whose principal business
segments are oil and gas exploration, production and marketing and chemicals
production and marketing. In oil and gas, Occidental has active exploration and
production in the United States and in ten other countries. Occidental's OxyChem
subsidiary has interests in basic chemicals (principally chlorine and caustic
soda), vinyls, petrochemicals and specialty products.

RISKS AND UNCERTAINTIES
     The process of preparing consolidated financial statements in conformity
with generally accepted accounting principles requires the use of estimates and
assumptions regarding certain types of assets, liabilities, revenues and
expenses. Such estimates primarily relate to unsettled transactions and events
as of the date of the consolidated financial statements. Accordingly, upon
settlement, actual results may differ from estimated amounts, generally not by
material amounts. Management believes that these estimates and assumptions
provide a reasonable basis for the fair presentation of Occidental's financial
position and results of operations.
     Included in the accompanying balance sheet is net property, plant and
equipment at a carrying value of approximately $13.5 billion as of December 31,
2000. These carrying values are based on Occidental's plans and intentions to
continue to operate, maintain and, where it is economically desirable, to expand
its businesses. If future economic conditions result in changes in management's
plans or intentions, the carrying values of the affected assets will be reviewed
again and any appropriate adjustments made.
     Included in the accompanying consolidated balance sheet are deferred tax
assets of $845 million as of December 31, 2000, the noncurrent portion of which
is netted against deferred income tax liabilities. Realization of these assets
is dependent upon Occidental generating sufficient future taxable income.
Occidental expects to realize the recorded deferred tax assets through future
operating income and reversal of taxable temporary differences.
     The accompanying consolidated balance sheet includes assets of
approximately $1.8 billion as of December 31, 2000, relating to Occidental's
operations in countries outside North America. Some of these countries may be
considered politically and economically unstable. These assets and the related
operations are subject to the risk of actions by governmental authorities and
insurgent groups. Occidental attempts to conduct its financial affairs so as to
mitigate its exposure against such risks and would expect to receive
compensation in the event of nationalization.
     Since Occidental's major products are commodities, significant changes in
the prices of oil and gas and chemical products could have a significant impact
on Occidental's results of operations for any particular year.

FOREIGN CURRENCY TRANSLATION
     The functional currency applicable to all Occidental's foreign oil and gas
operations is the U.S. dollar since cash flows are denominated principally in
U.S. dollars. Occidental's chemical operations in Brazil use the Real as the
functional currency. Brazil devalued the Real in January 1999. The devaluation
had an unfavorable pre-tax income effect in 1999 on Occidental of approximately
$13 million. The effect of exchange-rate changes on transactions denominated in
nonfunctional currencies generated a gain of less than $1 million in 2000, a
loss of $11 million in 1999 and a loss of $17 million in 1998. The 1998 loss was
primarily due to the currency devaluation in Russia.

CASH AND CASH EQUIVALENTS
     Cash equivalents consist of highly liquid money-market mutual funds and
bank deposits with initial maturities of three months or less. Cash equivalents
totaled approximately $46 million and $162 million at December 31, 2000 and
1999, respectively.

TRADE RECEIVABLES
     In 1992, Occidental entered into a new agreement to sell, under a revolving
sale program, an undivided percentage ownership interest in a designated pool of
trade receivables, with limited recourse. Under this program, Occidental serves
as the collection agent with respect to the receivables sold. An interest in new
receivables is sold as collections are made from customers. As of December 31,
2000 and 1999, Occidental had received net cash proceeds totaling $360 million.
Fees and expenses under this program are included in selling, general and
administrative and other

                                       37



operating expenses. During the years ended December 31, 2000, 1999 and 1998, the
cost of this program amounted to approximately 6.7 percent, 5.5 percent, and 5.9
percent, respectively, of the weighted average amount of proceeds received. In
January 2001, Occidental replaced the existing agreement with a similar one.

INVENTORIES

     Product and raw material inventories, except certain domestic chemicals,
are stated at cost determined on the first-in, first-out ("FIFO") and
average-cost methods and did not exceed market value. The remaining product and
raw material inventories are stated at cost using the last-in, first-out
("LIFO") method and also did not exceed market value. Inventories of materials
and supplies are valued at cost or less (see Note 5).

PROPERTY, PLANT AND EQUIPMENT
     Property additions and major renewals and improvements are capitalized at
cost. Interest costs incurred in connection with major capital expenditures are
capitalized and amortized over the lives of the related assets (see Note 16).
Depreciation and depletion of oil and gas producing properties is determined
principally by the unit-of-production method and is based on estimated
recoverable reserves. The unit-of-production method of depreciation, based on
estimated total productive life, also is used for certain chemical plant and
equipment. Depreciation of other plant and equipment has been provided primarily
using the straight-line method.
     Oil and gas properties are accounted for using the successful-efforts
method. Costs of acquiring nonproducing acreage, costs of drilling successful
exploration wells and development costs are capitalized. Producing and
nonproducing properties are evaluated periodically and, if conditions warrant,
an impairment reserve is provided. Annually, a determination is made whether it
is probable that significant impairment of the carrying cost for individual
fields or groups of fields has occurred, considering a number of factors,
including profitability, political risk and Occidental's estimate of future oil
and gas prices. If impairment is believed probable, a further analysis is
performed using Occidental's estimate of future oil and gas prices to determine
any impairment to be recorded for specific fields or groups of fields. Annual
lease rentals and exploration costs, including geologic and geophysical costs
and exploratory dry-hole costs, are expensed as incurred.
     At December 31, 2000 and 1999 corporate property, plant and equipment
included $1.2 billion for an intrastate gas pipeline owned by Occidental.
Accumulated depreciation, depletion and amortization included $436 million and
$407 million at December 31, 2000 and 1999, respectively, for such pipeline.

OTHER ASSETS
     Other assets include tangible and intangible assets, certain of which are
amortized over the estimated periods to be benefited.

NOTES PAYABLE
     Notes payable at December 31, 2000 and 1999 consisted of short-term notes
due to financial institutions and other corporations. The weighted average
interest rate on short-term borrowings outstanding as of December 31, 2000 and
1999 was 17.4 percent and 11.2 percent, respectively. The notes payable balance
at December 31, 2000 and 1999 included high-rate notes denominated in Brazilian
Reals.

ACCRUED LIABILITIES--CURRENT
     Accrued liabilities include the following (in millions):



Balance at December 31,                                      2000        1999
======================================================   ========   =========
                                                              
Accrued payroll, commissions and related expenses        $    180   $     130
Accrued interest expense                                 $     88   $     101
- ------------------------------------------------------   --------   ---------


ENVIRONMENTAL COSTS
     Environmental expenditures that relate to current operations are expensed
or capitalized as appropriate. Reserves for estimated costs that relate to
existing conditions caused by past operations and that do not contribute to
current or future revenue generation are recorded when environmental remedial
efforts are probable and the costs can be reasonably estimated. In determining
the reserves, Occidental uses the most current information available, including
similar past experiences, available technology, regulations in effect, the
timing of remediation and cost-sharing arrangements. The environmental reserves
are based on management's estimate of the most likely cost to be incurred and
are reviewed periodically and adjusted as additional or new information becomes
available. Probable recoveries or reimbursements are recorded as an asset. The
environmental reserves are included in accrued liabilities and other noncurrent
liabilities and amounted to $79 million and $323 million, respectively, at
December 31, 2000 and $88 million and $366 million, respectively, at December
31, 1999.
     Environmental reserves are discounted only when the aggregate amount of the
estimated costs for a specific site and the timing of cash payments are reliably
determinable. As of December 31, 2000 and 1999, reserves that were recorded on a
discounted basis were not material.

                                       38


DISMANTLEMENT, RESTORATION AND RECLAMATION COSTS
     The estimated future abandonment costs of oil and gas properties and
removal costs for offshore production platforms, net of salvage value, are
accrued over their operating lives. Such costs are calculated at
unit-of-production rates based upon estimated proved recoverable reserves and
are taken into account in determining depreciation, depletion and amortization.
For all other operations, appropriate reserves are provided when a decision is
made to dispose of a property, since Occidental makes capital renewal
expenditures on a continual basis while an asset is in operation. Reserves for
dismantlement, restoration and reclamation costs are included in accrued
liabilities and in other noncurrent liabilities and amounted to $2 million and
$28 million, respectively, at December 31, 2000, and $3 million and $76 million,
respectively, at December 31, 1999.

DERIVATIVE ACTIVITIES
     Occidental periodically uses commodity futures contracts, options and swaps
to hedge the impact of oil and natural gas price fluctuations and uses forward
exchange contracts to hedge the risk associated with fluctuations in foreign
currency exchange rates. Emerging Issues Task Force ("EITF") Issue No. 98-10,
Accounting for Contracts Involved in Energy Trading and Risk Management
Activities, was implemented in the first quarter of 1999. Oil and gas trading
contracts are measured at fair value on the balance sheet date. Gains and losses
on such contracts are recognized in periodic income. Except where a right of
setoff exists, gains are recognized as accrued receivables and losses are
recognized as accrued payables. Gains and losses on commodity futures contracts
that qualify for hedge accounting, essentially those associated with equity
production or purchases, are deferred until recognized as an adjustment to sales
revenue or purchase costs when the related transaction being hedged is
finalized. Gains and losses on foreign currency forward exchange contracts that
hedge identifiable future commitments are deferred until recognized when the
related item being hedged is settled. All other contracts are recognized in
periodic income. The cash flows from such contracts are included in operating
activities in the consolidated statements of cash flows.
     Interest rate swaps and futures are entered into, from time to time, on
specific debt as part of Occidental's overall strategy to maintain part of its
debt on a floating-rate basis. There were no interest rate swaps outstanding at
December 31, 2000.
     Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting
for Derivative Instruments and Hedging, as amended by SFAS 137, Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective Date
of FASB Statement No. 133, and SFAS 138, Accounting for Certain Derivative
Instruments and Certain Hedging Activities, is effective for Occidental as of
January 1, 2001. These statements establish accounting and reporting standards
for derivative instruments and hedging activities and require an entity to
recognize all derivatives in the statement of financial position and measure
those instruments at fair value. Changes in the derivative instrument's fair
value must be recognized into earnings unless specific hedge accounting criteria
are met. Adoption of these new accounting standards will result in cumulative
after-tax reductions in net income of approximately $24 million and other
comprehensive income of approximately $27 million in the first quarter of 2001.
The adoption will also increase total assets by $588 million and total
liabilities by $639 million on the balance sheet.

SUPPLEMENTAL CASH FLOW INFORMATION
     Cash payments during the years 2000, 1999 and 1998 included federal,
foreign and state income taxes of approximately $686 million, $105 million and
$212 million, respectively. Interest paid (net of interest capitalized) totaled
approximately $516 million, $468 million and $491 million for the years 2000,
1999 and 1998, respectively. See Note 3 for detail of noncash investing and
financing activities regarding certain acquisitions.


NOTE 2    FINANCIAL INSTRUMENTS
- --------------------------------------------------------------------------------
COMMODITY FUTURES AND FORWARD CONTRACTS
     Occidental's oil and gas segment engages in commodity derivative activity,
both for the purpose of hedging and trading activities. The resulting energy
trading contracts are measured at fair value on the balance sheet date. Gains
and losses on such contracts are recognized in periodic income. Gains and losses
on commodity futures contracts that qualify for hedge accounting, essentially
those associated with equity production or purchases, are deferred until
recognized as an adjustment to sales revenue or purchase costs when the related
transaction being hedged is finalized.

FORWARD EXCHANGE AND INTEREST RATE CONTRACTS
     Occidental is engaged in both oil and gas and chemical activities
internationally. International oil and gas transactions are mainly denominated
in U.S. dollars; consequently, foreign currency exposure is not deemed material.
Many of Occidental's foreign oil and gas operations and foreign chemical
operations are located in countries whose currencies generally depreciate
against the U.S. dollar on a continuing basis. An effective currency forward
market does not exist for these countries; therefore, Occidental attempts to
manage its exposure primarily by balancing monetary assets and liabilities and
maintaining cash positions only at levels necessary for operating purposes.

                                       39


     Additionally, all of Occidental's oil and gas foreign entities have the
U.S. dollar as the functional currency since the cash flows are mainly
denominated in U.S. dollars. The effect of exchange rate transactions in foreign
currencies is included in periodic income. Foreign currencies which are in a net
liability position are thus protected from the unfavorable effects of
devaluation. For entities that have a net foreign currency asset position,
Occidental attempts to maintain those positions at low levels to mitigate
exposure to currency devaluation. At December 31, 2000, Occidental had no
foreign currency contracts outstanding.
     From time to time, Occidental enters into interest rate swaps and futures
contracts to hedge interest rates on debt. In November 1993, Occidental entered
into interest rate swaps on newly issued fixed-rate debt for notional amounts
totaling $530 million. This converted fixed-rate debt into variable-rate debt,
based on the London Interbank Offered Rate. All remaining agreements matured in
November 2000. Notional amounts did not represent cash flow. Credit risk
exposure, which was not material, was limited to the net interest differentials.
The swap rate difference resulted in approximately $1 million of expense in
2000, less than $1 million of income in 1999 and approximately $2 million of
expense in 1998, compared to what interest expense would have been had the debt
remained at fixed rates. The impact of the swaps on the weighted average
interest rates for all debt in 2000, 1999 and 1998 was not significant.
     At December 31, 2000, Occidental was a party to a series of forward rate
locks that are required to be settled on or prior to December 31, 2002. These
financial instruments relate to debt raised by a third party to construct a
co-generation plant that will be subject to a long-term operating lease to an
OxyChem affiliate. As the lease payments will be directly related to the amount
of interest paid on the underlying debt, the forward rate locks were put in
place to hedge the future lease payments. The lease will commence on or before
December 31, 2002. The fair value of these financial instruments at December 31,
2000 was an unrealized loss of $29 million.

FAIR VALUE OF FINANCIAL INSTRUMENTS
     Occidental values financial instruments as required by SFAS No. 107,
Disclosures about Fair Value of Financial Instruments. The carrying amounts of
cash and cash equivalents and short-term notes payable approximate fair value
because of the short maturity of those instruments. Occidental estimates the
fair value of its long-term debt based on the quoted market prices for the same
or similar issues or on the yields offered to Occidental for debt of similar
rating and similar remaining maturities. The estimated fair value of
Occidental's total debt, including the non-recourse debt and Trust Preferred
Securities, at December 31, 2000 and 1999 was approximately $6.1 billion and
approximately $4.9 billion, respectively, compared with a carrying value of
approximately $5.9 billion, and approximately $4.9 billion, respectively.
Occidental will continue its strategy of maintaining part of its debt on a
floating-rate basis.
     The carrying value of other on-balance sheet financial instruments
approximates fair value and the cost, if any, to terminate off-balance sheet
financial instruments is not significant.
     Occidental values derivative financial instruments (a futures, forward,
swap, or option contract, or other financial instrument with similar
characteristics) as required by the SFAS No. 119, Disclosure about Derivative
Financial Instruments and Fair Value of Financial Instruments. The average fair
value of derivative financial instruments held or issued for trading purposes
during 2000 was $2 million. The fair value of these instruments at December 31,
2000 was $31 million. Offsetting the value of these instruments are related
physical positions with a $12 million loss. The approximate $19 million net gain
was reflected in the consolidated statements of operations. The majority of the
gain realized from derivative financial instruments held or issued for trading
purposes was from the mark-to-market under EITF Issue No. 98-10 of a long-term
sales contract. The gross value of these positions has been reflected on the
accompanying consolidated balance sheet as $252 million of accrued receivables
and $233 million of accrued liabilities. Excluding the long-term sales contract
that was marked-to-market under EITF Issue No. 98-10, the obligations' net
positions, most of which expire in 2001, cover 5 billion cubic feet of natural
gas and 50 thousand barrels of crude oil. The long-term sales contract volume
commitment is 38,100 MMBtu per day through October 2010. The risk portfolio is
spread out over numerous counterparties. The majority of the exposure is with
institutional banks and with market leaders in the industry. No defaults are
expected nor anticipated. Counterparty creditworthiness is reviewed before doing
business with a new counterparty and on an on-going basis. The derivative
financial instruments held for purposes other than trading expire during the
period from January 2001 to December 2003 and relate to the hedging of natural
gas and crude oil prices. The fair value of these instruments at December 31,
2000 was $511 million. Offsetting the value of these instruments are related
physical positions with a $528 million loss. The principal components of these
instruments and related physical positions are the natural gas delivery
commitment and the related natural gas price swap discussed in Note 7. At
December 31, 2000, the difference between the carrying value and the fair value
of financial instruments held for purposes other than trading was an unrealized
loss of approximately $17 million, which is currently deferred. Any gain or loss
will be recognized when the related transactions are finalized.
     The results of oil and gas trading activities, excluding the long-term
sales contract, were not significant.

                                       40


NOTE 3    BUSINESS COMBINATIONS, ASSET ACQUISITIONS AND DISPOSITIONS,
          AND DISCONTINUED OPERATIONS
- --------------------------------------------------------------------------------
     On December 4, 2000, Occidental completed an agreement with BP Amoco ("BP")
to obtain BP's interest in a carbon dioxide field in New Mexico and related
pipelines in exchange for Occidental's interest in the Milne Point oil field in
Alaska, together with additional cash consideration. The gain on this
transaction was not significant.
     On November 29, 2000, an OxyChem subsidiary purchased a 28.6 percent
interest in OxyMar, a Texas general partnership that owns the Ingleside, Texas
vinyl chloride monomer ("VCM") facility operated by OxyChem. The interest was
purchased from U.S. VCM Corporation, an affiliate of Marubeni Corporation, which
continues to own a 21.4 percent interest and remains a 50 percent partner for
corporate governance purposes. Oxy Vinyls, LP ("OxyVinyls") owns the remaining
50 percent interest.
     On November 1, 2000, Occidental agreed to farm out a partial economic
interest in its Block 15 operations in Ecuador to Alberta Energy Company Ltd.
("AEC"). AEC will earn a 40 percent interest in the block and will assume
certain capital costs through 2004. Occidental will remain the operator of Block
15. The gain on this transaction was not significant.
     On November 1, 2000, Occidental completed the sale of its Durez phenolic
resins and compounding businesses and assets to Sumitomo Bakelite Co., Ltd. The
net after-tax proceeds of approximately $120 million from the sale will be
applied to Occidental's debt reduction program. Manufacturing facilities
included in the sale are located in Niagara Falls, New York; Kenton, Ohio; Fort
Erie, Ontario, Canada; and Genk, Belgium, as well as OxyChem's share in joint
ventures located in Japan, Singapore, Indonesia and Canada. There was a $13
million after-tax gain on this transaction.
     On August 15, 2000, Occidental completed agreements with respect to two
transactions with Apache Corporation ("Apache") involving Occidental's interests
in the Continental Shelf of the Gulf of Mexico ("GOM"). Occidental entered into
a transaction to deliver, over four years, substantially all of its share of
future gas production from these GOM interests to Apache for approximately $280
million. Occidental also agreed to sell an interest in the subsidiary that holds
the GOM assets for approximately $62 million, with an option for Apache to
purchase additional interests for $44 million over the next four years. As a
result of these transactions, and the consequent elimination of a portion of
Occidental's responsibility for abandonment liabilities, Occidental recorded an
after-tax gain of $39 million.
     On May 8, 2000, Occidental completed an agreement to sell its producing
properties in Peru to Pluspetrol. In connection with this transaction,
Occidental recorded an after-tax charge of approximately $29 million in December
1999 to write-down the properties to their fair values.
     On April 24, 2000, Occidental completed the acquisition of ARCO Long Beach
Inc. ("THUMS"), an oil producing entity, for approximately $68 million.
     On April 19, 2000, Occidental completed its acquisition of all of the
common interest in Altura Energy Ltd. (now "Occidental Permian Ltd.")
("Altura"), the largest oil producer in Texas. Occidental, through its
subsidiaries, paid approximately $1.2 billion to the sellers, affiliates of BP
Amoco plc and Shell Oil Company, to acquire the common limited partnership
interest and control of the general partner which manages, operates and controls
100 percent of the Altura assets. The partnership borrowed approximately $2.4
billion, which has recourse only to the Altura assets. The partnership also
loaned approximately $2.0 billion to affiliates of the sellers, evidenced by two
notes recorded as long-term receivables, which provide credit support to the
partnership. The sellers retained a preferred limited partnership interest of
approximately $2.0 billion and are entitled to certain distributions from the
partnership. The acquisition is valued at approximately $3.6 billion.
Occidental's results of operations include the operations of the Altura assets
from the date of acquisition. Pro-forma net income for the year ended December
31, 2000, including historical Altura results as if the acquisition had occurred
on January 1, 2000, would have been $1.6 billion ($4.47 earnings per share).
Pro-forma net income for the year ended December 31, 1999, including historical
Altura results as if the acquisition had occurred on January 1, 1999, would have
been $601 million ($1.69 earnings per share). Pro-forma revenues would have been
$14.9 billion and $9.4 billion for the year ended December 31, 2000, and 1999,
respectively. The pro-forma calculations were made with historical operating
results from Altura prior to ownership by Occidental and give effect to certain
adjustments, including increased depreciation, depletion and amortization to
reflect the value assigned to the Altura property, plant and equipment,
increased interest expense, and income tax effects. The pro-forma results are
not necessarily indicative of the results of operations that would have occurred
if the acquisition had been made at the beginning of the periods presented or
that may be obtained in the future. Also, the pro-forma calculations do not
reflect anticipated cost savings, synergies, changes in realized prices or
production rates and certain other adjustments that are expected to result from
the acquisition and operation of Altura.
     On April 18, 2000, Occidental completed the sale of its 29.2 percent stake
in Canadian Occidental Petroleum Ltd. ("CanadianOxy") for gross proceeds of
approximately $1.2 billion Canadian, following approval of the sale by
CanadianOxy stockholders. Of Occidental's 40.2 million shares of CanadianOxy,
20.2 million were sold to the Ontario Teachers Pension Plan Board and 20 million
to CanadianOxy. These sales resulted in a net pre-tax gain of approximately $493
million. In addition, Occidental and CanadianOxy sold their respective 15
percent interests in joint businesses of approximately equal value, resulting in
Occidental owning 100 percent of an oil and gas operation in Ecuador and
CanadianOxy owning 100 percent of sodium chlorate operations in Canada and
Louisiana.

                                       41


     In December 1999, Occidental and EOG Resources, Inc. ("EOG") exchanged
certain oil and gas assets. Occidental received assets that will enhance its
programs to further focus exploration and production activities and achieve cost
savings through operational benefits. Occidental received producing properties
and exploration acreage in its expanding California asset base, as well as
producing properties in the western Gulf of Mexico near existing operations in
exchange for oil and gas production and reserves in east Texas. Occidental also
farmed out Oklahoma panhandle properties to EOG and retained a carried interest.
     In the third quarter of 1999, pursuant to a series of transactions,
Occidental indirectly acquired the remaining ownership of INDSPEC Chemical
Corporation ("INDSPEC") through the issuance of approximately 3.2 million shares
of Occidental common stock at an estimated value of approximately $68 million
and the assumption of approximately $80 million of bank debt. As a result of the
transactions, Occidental owns 100 percent of the stock of INDSPEC, which is a
leading manufacturer of resorcinol, a bonding agent principally used in tires
and as a flame retardant.
     In the third quarter of 1999, Occidental acquired Unocal International
Corporation's ("UNOCAL") oil and gas interests in Yemen and UNOCAL acquired
Occidental's properties in Bangladesh. The results, after tax benefits, did not
have a significant impact on earnings.
     Effective April 30, 1999, Occidental and The Geon Company (now known as
"PolyOne") formed two partnerships. Occidental has a 76 percent interest in the
polyvinyl chloride ("PVC") commodity resin partnership, OxyVinyls, which is the
larger of the partnerships, and a 10 percent interest in a PVC powder
compounding partnership. OxyVinyls also has entered into long-term agreements to
supply PVC resin to PolyOne and VCM to Occidental and PolyOne. In addition, as
part of the transaction, Occidental sold its pellet compounding plant in
Pasadena, Texas and its vinyl film assets in Burlington, New Jersey to PolyOne.
As part of the transaction, PolyOne received approximately $104 million through
the retention of working capital and the distribution of cash from OxyVinyls,
and OxyVinyls undertook approximately $180 million in obligations for certain
PolyOne plant facilities, which are treated as operating leases for accounting
purposes. Occidental did not record a significant gain or loss on the
transaction.
     In May 1998, Occidental contributed its ethylene, propylene, ethylene oxide
and ethylene glycol derivatives businesses (collectively, "the petrochemicals
business") to a partnership called Equistar Chemicals, LP ("Equistar"), in
return for a 29.5 percent interest in such partnership, receipt of approximately
$420 million in cash and the assumption by Equistar of approximately $205
million of Occidental capital lease liabilities. Occidental guaranteed $625
million of Equistar's debt related to these amounts. Lyondell Petrochemical
Company ("Lyondell") and Millennium Chemicals, Inc. ("Millennium"), through
their respective subsidiaries, were the original partners of Equistar. Lyondell
owns 41 percent of Equistar and Occidental and Millennium each own 29.5 percent.
Occidental did not record a gain or loss on the transaction.
     In February 1998, Occidental acquired the U.S. government's approximate 78
percent interest in the Elk Hills Naval Petroleum Reserve oil and gas fields
("Elk Hills field") for approximately $3.5 billion. Occidental's results of
operations include the operations of the Elk Hills field from the date of
acquisition. Pro-forma net income for the year ended December 31, 1998,
including historical Elk Hills results as if the acquisition had occurred at
January 1, 1998, would not have been materially different. Pro-forma revenues
would have been $7.4 billion for the year ended December 31, 1998. The pro-forma
calculations were made with historical operating results for the Elk Hills field
prior to ownership by Occidental and give effect to certain adjustments
including increased depreciation, depletion and amortization to reflect the
value assigned to Elk Hills property, plant and equipment, increased interest
expense assuming the acquisition was completely financed, and income and
property tax effects, but did not reflect anticipated future production
enhancements in the Elk Hills field and operational cost improvements expected
to be realized.
     In 1998, Occidental completed a number of international and domestic asset
sales as part of an asset redeployment program. The sale of major nonstrategic
oil and gas properties included Occidental's entire interest in an oilfield
development project in Venezuela, the stock of the subsidiary which owned its
oil and gas assets in the Netherlands and the North Sea, as well as various
domestic properties. Net proceeds from all major nonstrategic oil and gas asset
sales were $1.1 billion, and the total net pre-tax gain was $532 million, which
is included in the total gain from disposition of assets of $546 million.
     Additionally in 1998, Occidental and the Royal Dutch/Shell Group ("Shell")
exchanged Occidental's oil and gas interests in the Philippines and Malaysia for
Shell's oil and gas interests in Yemen and Colombia. Shell also received a cash
payment of approximately $89 million. No gain or loss was recorded on the
transaction.
     Occidental completed the sale of all of the issued and outstanding shares
of common stock of MidCon, its natural gas transmission and marketing business,
to KN Energy, Inc. ("KN Energy"), on January 31, 1998 in return for a cash
payment of $2.1 billion. The estimated net cash proceeds from the transaction
were approximately $1.7 billion. Additionally, KN Energy issued a fixed-rate
interest bearing note, payable January 4, 1999, to Occidental in the amount of
$1.4 billion, in exchange for a note previously issued to Occidental by the
MidCon Corp. Employee Stock Ownership Plan ("ESOP") Trust. The $1.4 billion note
was repaid on January 4, 1999. MidCon also retained responsibility for certain
Texas intrastate pipeline lease obligations to an Occidental subsidiary. In
connection with the sale, the Cumulative MidCon-Indexed Convertible Preferred
Stock ("CMIC Preferred Stock") was redeemed.

                                       42



NOTE 4    EXTRAORDINARY ITEMS AND ACCOUNTING CHANGES AND OTHER TRANSACTIONS
- --------------------------------------------------------------------------------
     The 2000 results included pre-tax charges of $120 million for the
write-down of the chemical intermediate businesses to net realizable value, $53
million for the write-down of various oil and gas assets and investments and $15
million for the write-down of various chemical assets.
     During the third and fourth quarters of 2000, Occidental repurchased some
of its outstanding public debt securities in open market transactions, with
principal balances totaling $154 million, at current market prices. Occidental
recorded an after-tax extraordinary gain of $1 million that resulted from these
purchases.
     In the fourth quarter of 2000, Occidental adopted the provisions of EITF
Issue No. 00-10, Accounting for Shipping and Handling Fees and Costs, which
establishes accounting and reporting standards for the treatment of shipping and
handling costs. Among its provisions, EITF Issue No. 00-10 requires that
transportation costs that had been accounted for as deductions from revenues
should now be recorded as an expense. The implementation of EITF Issue No. 00-10
had no effect on net income. All prior year balances have been adjusted to
reflect this accounting change. The transportation costs that have been removed
as deductions from revenues and included in cost of sales on Occidental's
"Statements of Operations" totaled $245 million in 2000, $210 million in 1999
and $209 million in 1998.
     The 1999 results included pre-tax charges of $159 million for the
write-down to realizable value of certain chemical assets, $28 million for
write-downs by Equistar and $9 million for various oil and gas assets.
     Effective January 1, 1999, Occidental adopted the provisions of American
Institute of Certified Public Accountants Statement of Position ("SOP") 98-5,
Reporting on the Costs of Start-Up Activities, which requires that costs of
start-up activities, including organizational costs, be expensed as incurred.
The initial application of the statement resulted in a charge to income for
costs of previously capitalized start-up activities that have not yet been fully
amortized. The initial adoption of SOP 98-5 resulted in a first quarter noncash
after-tax charge of $15 million, net of $8 million in taxes, which has been
recorded as a cumulative effect of a change in accounting principle.
     Effective January 1, 1999, Occidental adopted the provisions of EITF Issue
No. 98-10, Accounting for Contracts Involved in Energy Trading and Risk
Management Activities, which establishes accounting and reporting standards for
certain energy trading contracts. EITF Issue No. 98-10 requires that energy
trading contracts must be marked-to-market with gains and losses included in
earnings and separately disclosed in the financial statements or footnotes
thereto. The initial adoption of EITF Issue No. 98-10 resulted in a first
quarter noncash after-tax benefit of $2 million, recorded as a cumulative effect
of a change in accounting principle.
     In June 1999, Occidental redeemed $68.7 million of its 11.125 percent
senior debentures due June 1, 2019 and recorded an after-tax extraordinary loss
of $3 million in the second quarter of 1999 related to the redemption.
     In December 1999, OXY USA settled its long-standing litigation with Chevron
U.S.A. Inc. ("Chevron") for a cash payment of $775 million from Chevron. The
related pre-tax income of $775 million is reported as interest, dividends and
other income in the accompanying consolidated statements of operations.
Occidental then repurchased for cash, $240 million principal amount of its
10.125 percent Senior Notes due November 15, 2001, and $138 million principal
amount of its 11.125 percent Senior Notes due August 1, 2010 and redeemed all of
OXY USA's $274 million principal amount of 7 percent debentures due 2011 for a
total of $722 million, including premium, expenses and accrued interest.
Occidental recorded an after-tax extraordinary loss of $104 million in the
fourth quarter of 1999 related to the transactions. The 1999 total year results
included a net extraordinary loss of $107 million, which resulted from the early
extinguishment of high-cost debt.
     In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial
Statements. SAB No. 101 summarizes the Staff's views in applying generally
accepted accounting principles to revenue recognition in the financial
statements. The bulletin was effective in the fourth quarter of 2000. Occidental
was in compliance with these standards; accordingly, the adoption of SAB No. 101
did not have an impact on its consolidated financial statements.
     Effective January 1, 1998, Occidental adopted the provisions of SFAS No.
130, Reporting Comprehensive Income. This statement establishes standards for
reporting and display of comprehensive income and its components in a full set
of general purpose financial statements. The implementation of SFAS No. 130 did
not have an impact on Occidental's results of operations. The prior year
financial statements have been restated to conform to the new presentation.
Occidental's comprehensive income is composed primarily of net income or loss,
foreign currency translation adjustments and minimum pension liability
adjustments. Occidental's comprehensive income was $1,571 million in 2000, $426
million in 1999 and $345 million in 1998.
     Effective January 1, 1998, Occidental adopted the provisions of SFAS No.
131, Disclosures about Segments of an Enterprise and Related Information. This
statement establishes standards for reporting and display of information about
operating segments. It supersedes or amends several Financial Accounting
Standards Board ("FASB") statements, most notably, SFAS No. 14, Financial
Reporting for Segments of a Business Enterprise. The implementation of SFAS No.
131 did not have an impact on Occidental's consolidated financial position or
results of operations.

                                       43


NOTE 5    INVENTORIES
- --------------------------------------------------------------------------------
     Inventories of approximately $268 million and $246 million were valued
under the LIFO method at December 31, 2000 and 1999, respectively. Inventories
consisted of the following (in millions):



Balance at December 31,               2000        1999
==============================   =========   =========
                                       
Raw materials                    $      68   $      60
Materials and supplies                 125         167
Work in process                          3           7
Finished goods                         343         294
                                 ---------   ---------

                                       539         528
LIFO reserve                           (54)        (25)
                                 ---------   ---------

TOTAL                            $     485   $     503
==============================   =========   =========


NOTE 6    LONG-TERM DEBT AND NON-RECOURSE DEBT
- --------------------------------------------------------------------------------
     Long-term debt consisted of the following (in millions):



Balance at December 31,                                                                     2000        1999
====================================================================================   =========   =========
                                                                                             
OCCIDENTAL PETROLEUM CORPORATION
    7.65% senior notes due 2006                                                        $     450   $     450
    6.4% senior notes due 2013, subject to remarketing April 1, 2003                         450         450
    7.375% senior notes due 2008                                                             395         400
    8.45% senior notes due 2029                                                              350         350
    9.25% senior debentures due 2019, putable August 1, 2004 at par                          300         300
    10.125% senior debentures due 2009                                                       276         276
    7.2% senior debentures due 2028                                                          200         200
    6.75% senior notes due 2002                                                              163         200
    6.5% senior notes due 2005                                                               157         250
    Medium-term notes due 2001 through 2008 (7.18% to 9.75% at December 31, 2000)            150         427
    8.5% senior notes due 2001                                                               132         150
    8.75% medium-term notes due 2023                                                         100         100
    10.125% senior notes due 2001                                                             89          90
    11.125% senior notes due 2010                                                             12          12
    Floating rate extendible notes due 2008                                                   --         270
    11.125% senior debentures due 2019, redeemed on June 1, 2000 at par                       --          75
                                                                                       ---------   ---------
                                                                                           3,224       4,000
                                                                                       ---------   ---------

OXY USA INC.
    5.7% to 7.8% unsecured notes due 2001 through 2007                                        34          48
    7.2% unsecured notes due 2020                                                              7           7
                                                                                       ---------   ---------
                                                                                              41          55
                                                                                       ---------   ---------

OTHER SUBSIDIARY DEBT
    4.4% to 7.85% unsecured notes due 2001 through 2030                                      276         321
    6% secured notes due 2001 through 2007                                                    17          17
                                                                                       ---------   ---------
                                                                                             293         338
                                                                                       ---------   ---------
                                                                                           3,558       4,393
Less:
    Unamortized discount, net                                                                (16)        (21)
    Current maturities                                                                      (257)         (4)
                                                                                       ---------   ---------
TOTAL LONG-TERM DEBT                                                                       3,285       4,368
                                                                                       ---------   ---------

    Occidental Permian Ltd. non-recourse term loan due 2005
      (7.66% weighted average interest rate at December 31, 2000)                          1,900          --
                                                                                       ---------   ---------
TOTAL LONG-TERM DEBT AND NON-RECOURSE DEBT                                             $   5,185   $   4,368
====================================================================================   =========   =========


                                       44


     At December 31, 2000, Occidental had available lines of committed bank
credit of approximately $2.1 billion. Bank fees on these committed lines of
credit ranged from 0.125 percent to 0.175 percent.
     At December 31, 2000, minimum principal payments on long-term debt and
non-recourse debt subsequent to December 31, 2001 aggregated $5.2 billion, of
which $261 million is due in 2002, $814 million in 2003, $625 million in 2004,
$1.4 billion in 2005, $2 million in 2006 and $2.1 billion thereafter.
Unamortized discount is generally being amortized to interest expense on the
effective interest method over the lives of the related issues.
     At December 31, 2000, under the most restrictive covenants of certain
financing agreements, the capacity for the payment of cash dividends and other
distributions on, and for acquisitions of, Occidental's capital stock was
approximately $2.5 billion, assuming that such dividends, distributions and
acquisitions were made without incurring additional borrowings.


NOTE 7    NATURAL GAS DELIVERY COMMITMENT
- --------------------------------------------------------------------------------
     In November 1998, Occidental entered into a natural gas delivery commitment
for proceeds of $500 million, which obligates Occidental to deliver 263 billion
cubic feet of natural gas over a four-year period beginning in 2000. The imputed
interest rate in the transaction is approximately 6 percent. In connection with
this transaction, Occidental simultaneously entered into a natural gas price
swap based on identical volumes of natural gas and a delivery schedule that
corresponds to the natural gas delivery commitment. Under the terms of the swap,
Occidental will pay an average fixed price of $2.27 per MMBtu of gas and will
receive a floating price that will approximate market which mitigates
Occidental's price exposure. At December 31, 2000, the fair value of this price
swap is a $525 million gain, which is offset by a $525 million loss applicable
to the related physical positions. This price swap is the principal component of
the fair value for derivative financial instruments disclosed in Note 2.
Occidental has the ability to satisfy the delivery commitment with open market
purchases and has not reduced its natural gas reserves for the commitment. At
December 31, 2000, the future minimum delivery commitment under the contract
expressed in dollars and in volumes is as follows (dollars in millions, volumes
in billions of cubic feet):



                                                                                    VALUE     VOLUMES
=============================================================================   =========   =========
                                                                                      
2001                                                                            $     150          66
2002                                                                                  150          66
2003                                                                                  147          65
                                                                                ---------   ---------

TOTAL                                                                                 447         197
                                                                                            =========
Less:
    Imputed interest                                                                  (36)
    Current portion                                                                  (129)
                                                                                ---------

PRESENT VALUE OF NATURAL GAS DELIVERY COMMITMENT, NET OF CURRENT PORTION        $     282
=============================================================================   =========


                                       45



NOTE 8    LEASE COMMITMENTS
- --------------------------------------------------------------------------------
     The present value of net minimum capital lease payments, net of the current
portion, totaled $26 million and $27 million at December 31, 2000 and 1999,
respectively. These amounts are included in other liabilities.
     Operating and capital lease agreements, which include leases for
manufacturing facilities, office space, railcars and tanks, frequently include
renewal and/or purchase options and require Occidental to pay for utilities,
taxes, insurance and maintenance expense.
    At December 31, 2000, future net minimum lease payments for capital and
operating leases (excluding oil and gas and other mineral leases) were the
following (in millions):



                                                                                  CAPITAL   OPERATING
=============================================================================   =========   =========
                                                                                      
2001                                                                            $       4   $      79
2002                                                                                    2          54
2003                                                                                    1          44
2004                                                                                    1          30
2005                                                                                    1          22
Thereafter                                                                             42         172
                                                                                ---------   ---------

TOTAL MINIMUM LEASE PAYMENTS                                                           51   $     401
                                                                                            =========
Less:
    Executory costs                                                                    (1)
    Imputed interest                                                                  (22)
    Current portion                                                                    (2)
                                                                                ---------

PRESENT VALUE OF NET MINIMUM CAPITAL LEASE PAYMENTS, NET OF CURRENT PORTION     $      26
=============================================================================   =========


     Rental expense for operating leases, net of sublease rental income, was $98
million in 2000, $93 million in 1999 and $106 million in 1998. Rental expense
was net of sublease income of $8 million in 2000, $9 million in 1999 and $10
million in 1998. At December 31, 2000, sublease rental amounts included in the
future operating lease payments totaled $98 million, as follows (in millions):
2001--$8, 2002--$7, 2003--$7, 2004--$7, 2005--$7, and 2006 and thereafter--$62.
In addition, Occidental has undertaken certain commitments in connection with
the construction and leasing of a co-generation facility in Louisiana. Upon
completion of construction and satisfaction of certain other conditions, lease
payments are expected to commence on or before December 31, 2002.
     Occidental has guaranteed the residual value of certain leased assets of
approximately $152 million. If the assets are not purchased at the end of the
lease-term, Occidental would be obligated to pay any deficiency between the fair
value of the assets and the guaranteed residual; however, Occidental does not
expect to make payments under this provision.
     Included in the 2000 and 1999 property, plant and equipment accounts were
$62 million and $59 million, respectively, of property leased under capital
leases and $57 million and $52 million, respectively, of related accumulated
amortization.


NOTE 9    LAWSUITS, CLAIMS, COMMITMENTS, CONTINGENCIES AND RELATED MATTERS
- --------------------------------------------------------------------------------

     Occidental and certain of its subsidiaries have been named as defendants or
as potentially responsible parties in a substantial number of lawsuits, claims
and proceedings, including governmental proceedings under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") and
corresponding state acts. These governmental proceedings seek funding,
remediation and, in some cases, compensation for alleged property damage,
punitive damages and civil penalties, aggregating substantial amounts.
Occidental is usually one of many companies in these proceedings, and has to
date been successful in sharing response costs with other financially sound
companies. Occidental has accrued reserves at the most likely cost to be
incurred in those proceedings where it is probable that Occidental will incur
remediation costs which can be reasonably estimated.
     In December 1998, David Croucher and others filed suit in the Federal
District Court in Houston, Texas on behalf of persons claiming to have been
beneficiaries of the MidCon ESOP. The suit has been certified as a class action.
The plaintiffs allege that each of the U.S. Trust Company of California (the
"ESOP Trustee") and the MidCon ESOP Administrative Committee breached its
fiduciary duty to the plaintiffs by failing to properly value the securities
held by the ESOP, and allege that Occidental actively participated in such
conduct. The plaintiffs claim that, as a result of this alleged breach, the ESOP
participants are entitled to an additional aggregate distribution of at least
$200 million and that Occidental has been unjustly enriched and is liable for
failing to make that distribution. In December 2000, the named plaintiffs and
defendants reached a proposed settlement of the action. This settlement provides
for Occidental to pay the class $25 million and fees and expenses of plaintiffs'
counsel as awarded by the Court. The Court has scheduled a hearing on March 15,
2001 to consider approving the settlement. Occidental has adequate reserves.
     During the course of its operations, Occidental is subject to audit by
taxing authorities for varying periods in various tax jurisdictions.

                                       46


     At December 31, 2000, commitments for major capital expenditures during
2001 and thereafter were approximately $73 million.
     Occidental has entered into agreements providing for future payments to
secure terminal and pipeline capacity, drilling services, electrical power,
steam and certain chemical raw materials. At December 31, 2000, the net present
value of the fixed and determinable portion of the obligations under these
agreements, which were used to collateralize financings of the respective
suppliers, aggregated $251 million, which was payable as follows (in millions):
2001--$29, 2002--$27, 2003--$26, 2004--$23, 2005--$22 and 2006 through
2016--$131. Payments under these agreements, including any variable component,
were $42 million in 2000, $20 million in 1999 and $19 million in 1998.
     Occidental has certain other commitments under contracts, guarantees and
joint ventures, and certain other contingent liabilities. Many of these
commitments, although not fixed or determinable, involve capital expenditures
and are part of the $1.1 billion capital expenditures estimated for 2001.
     It is impossible at this time to determine the ultimate liabilities that
Occidental and its subsidiaries may incur resulting from the foregoing lawsuits,
claims and proceedings, audits, commitments, contingencies and related matters.
Several of these matters may involve substantial amounts, and if these were to
be ultimately resolved unfavorably to the full amount of their maximum potential
exposure, an event not currently anticipated, it is possible that such event
could have a material adverse effect upon Occidental's consolidated financial
position or results of operations. However, in management's opinion, after
taking into account reserves, it is unlikely that any of the foregoing matters
will have a material adverse effect upon Occidental's consolidated financial
position or results of operations.


NOTE 10    DOMESTIC AND FOREIGN INCOME AND OTHER TAXES
- --------------------------------------------------------------------------------
     The domestic and foreign components of income(loss) from continuing
operations before domestic and foreign income and other taxes were as follows
(in millions):



For the years ended December 31,       Domestic     Foreign       Total
===================================   =========   =========   =========
                                                     
2000                                  $   1,534   $   1,477   $   3,011
                                      =========   =========   =========

1999                                  $     473   $     726   $   1,199
                                      =========   =========   =========

1998                                  $     388   $     300   $     688
===================================   =========   =========   =========


     The provisions(credits) for domestic and foreign income and other taxes
consisted of the following (in millions):



                                           U.S.       State
For the years ended December 31,        Federal   and Local     Foreign       Total
===================================   =========   =========   =========   =========
                                                              
2000
    Current                           $     433   $      18   $     578   $   1,029
    Deferred                                403           9           1         413
                                      ---------   ---------   ---------   ---------
                                      $     836   $      27   $     579   $   1,442
===================================   =========   =========   =========   =========

1999
    Current                           $      76   $      26   $     346   $     448
    Deferred                                184           7          (8)        183
                                      ---------   ---------   ---------   ---------
                                      $     260   $      33   $     338   $     631
===================================   =========   =========   =========   =========

1998
    Current                           $    (113)  $      23   $     178   $      88
    Deferred                                249          29          (3)        275
                                      ---------   ---------   ---------   ---------
                                      $     136   $      52   $     175   $     363
===================================   =========   =========   =========   =========


                                       47


     The following is a reconciliation, stated as a percentage of pre-tax
income, of the U.S. statutory federal income tax rate to Occidental's effective
tax rate on income from continuing operations:



For the years ended December 31,                 2000       1999       1998
==========================================   ========   ========   ========
                                                          
U.S. federal statutory tax rate                    35%        35%        35%
Operations outside the United States(a)            11         12         15
State taxes, net of federal benefit                 1          2          5
Capital loss benefit                               --         --         (5)
Other                                               1          4          3
                                             --------   --------   --------

Tax rate provided by Occidental                    48%        53%        53%
==========================================   ========   ========   ========


(a)  Included in these figures is the impact of not providing U.S. taxes on the
     unremitted earnings of certain foreign subsidiaries. The effect of this is
     to reduce the U.S. federal tax rate by approximately 7 percent in 1999 and
     6 percent in 1998. The effect on 2000 due to distributions from these
     subsidiaries was insignificant.

     The tax effects of temporary differences and carryforwards resulting in
deferred income taxes at December 31, 2000 and 1999 were as follows (in
millions):



                                                                                     2000                        1999
                                                                -------------------------   -------------------------
                                                                   DEFERRED      DEFERRED      Deferred      Deferred
                                                                        TAX           TAX           Tax           Tax
Items resulting in temporary differences and carryforwards           ASSETS   LIABILITIES        Assets   Liabilities
=============================================================   ===========   ===========   ===========   ===========
                                                                                              
Property, plant and equipment differences                       $       188   $       884   $       190   $       695
Equity investments including partnerships                                --         1,066            --         1,046
Environmental reserves                                                  145            --           152            --
Postretirement benefit accruals                                         184            --           140            --
State income taxes                                                      108            --            95            --
Tax credit carryforwards                                                 --            --            60            --
All other                                                               243            58           427           141
                                                                -----------   -----------   -----------   -----------

    Subtotal                                                            868         2,008         1,064         1,882
Valuation allowance                                                     (23)           --           (32)           --
                                                                -----------   -----------   -----------   -----------

Total deferred taxes                                            $       845   $     2,008   $     1,032   $     1,882
=============================================================   ===========   ===========   ===========   ===========


     Included in total deferred tax assets was a current portion aggregating
$117 million and $145 million as of December 31, 2000 and 1999, respectively,
that was reported in prepaid expenses and other.
     A deferred tax liability of approximately $145 million at December 31, 2000
has not been recognized for temporary differences related to Occidental's
investment in certain foreign subsidiaries primarily as a result of unremitted
earnings of consolidated subsidiaries, as it is Occidental's intention,
generally, to reinvest such earnings permanently.
     The foreign currency translation adjustment included in other comprehensive
income was net of an income tax charge of $6 million in 2000, a charge of $5
million in 1999 and a benefit of $6 million in 1998.
     The extraordinary loss that resulted from the early extinguishment of debt
was reduced by an income tax benefit of $61 million in 1999.
     The cumulative effect of changes in accounting principles in 1999 was
reduced by an income tax benefit of $7 million.
     Discontinued operations included income tax charges of $21 million in 1998.
     During 2000, Occidental utilized, for U.S. federal income tax return
purposes, the entire alternative minimum tax credit carryforward balance of $60
million.

                                       48


NOTE 11   NONREDEEMABLE PREFERRED STOCK AND COMMON STOCK
- --------------------------------------------------------------------------------
     The following is an analysis of nonredeemable preferred stock and common
stock (shares in thousands):



                                                     Nonredeemable            Common
                                                   Preferred Stock             Stock
================================================   ===============   ===============
                                                               
BALANCE, DECEMBER 31, 1997                                  22,491           341,127
    Issued                                                      --             1,246
    Preferred stock conversions                            (17,639)           40,098
    Repurchase program                                          --           (35,142)
    Options exercised and other, net                            --               393
- ------------------------------------------------   ---------------   ---------------

BALANCE, DECEMBER 31, 1998                                   4,852           347,722
    Issued                                                      --             4,610
    Preferred stock conversions/redemptions                 (4,852)           15,708
    Options exercised and other, net                            --              (124)
- ------------------------------------------------   ---------------   ---------------

BALANCE, DECEMBER 31, 1999                                      --           367,916
    Issued                                                                     2,244
    Options exercised and other, net                                            (176)
- ------------------------------------------------   ---------------   ---------------

BALANCE, DECEMBER 31, 2000                                      --           369,984
================================================   ===============   ===============


NONREDEEMABLE PREFERRED STOCK
     Occidental has authorized 50,000,000 shares of preferred stock with a par
value of $1.00 per share. In February 1994, Occidental issued 11,388,340 shares
of $3.00 cumulative CXY-indexed convertible preferred stock in a public offering
for net proceeds of approximately $557 million. The shares were convertible into
Occidental common stock in accordance with a conversion formula that was indexed
to the market price of the common shares of CanadianOxy. In August 1999,
Occidental called for redemption all of the outstanding shares of such preferred
stock. In 1999 and 1998, 4,847,130 shares and 2,532,740 shares of CXY-indexed
convertible preferred stock were converted by the holders into 15,708,176 shares
and 6,911,913 shares of Occidental's common stock, respectively.
     At December 31, 2000 and 1999, Occidental had no outstanding shares of
preferred stock.

COMMON STOCK REPURCHASE PROGRAM
     In 1998, Occidental completed the common stock repurchase program announced
in October 1997. Under the program, 39.3 million shares were repurchased and
retired for a total cost of $1.06 billion of which 35.1 million shares were
repurchased and retired in 1998 at a cost of $937 million.

STOCK INCENTIVE PLANS
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
     Options to purchase common stock of Occidental have been granted to
officers and employees under stock option plans adopted in 1987 and 1995. During
2000, options for 2,987,348 shares became exercisable, and options for 8,373,508
shares were exercisable at December 31, 2000 at a weighted-average exercise
price of $22.84. Generally, these options vest over three years with a maximum
term of ten years and one month. At December 31, 2000, options with stock
appreciation rights ("SAR") for 473,000 shares were outstanding, all of which
were exercisable.

     The following is a summary of stock option transactions during 2000, 1999
and 1998 (shares in thousands):



                                                2000                        1999                        1998
                           -------------------------   -------------------------   -------------------------
                                            WEIGHTED                    Weighted                    Weighted
                                             AVERAGE                     Average                     Average
                             SHARES   EXERCISE PRICE     Shares   Exercise Price     Shares   Exercise Price
========================   ========   ==============   ========   ==============   ========   ==============
                                                                            
BEGINNING BALANCE            13,033   $       23.249      8,169   $       24.065      6,769   $       23.274
Granted or issued             5,577   $       20.144      5,221   $       19.577      2,443   $       26.032
Exercised                       (93)  $       19.968         (7)  $       17.750       (605)  $       22.310
Canceled or expired            (300)  $       25.018       (350)  $       26.874       (438)  $       25.222
                           --------                    --------                    --------

ENDING BALANCE               18,217   $       21.532     13,033   $       23.249      8,169   $       24.065
                           ========                    ========                    ========

OPTIONS EXERCISABLE
     AT YEAR-END              8,374                       5,761                       4,400
========================   ========                    ========                    ========


                                       49


     The following is a summary of stock options outstanding at December 31,
2000 (shares in thousands):



                                                 OPTIONS OUTSTANDING                     OPTIONS EXERCISABLE
                                        -------------------------------------     --------------------------------
                                          WEIGHTED AVERAGE           WEIGHTED                             WEIGHTED
RANGE OF                                         REMAINING            AVERAGE                              AVERAGE
EXERCISE PRICES         OUTSTANDING       CONTRACTUAL LIFE     EXERCISE PRICE       EXERCISABLE     EXERCISE PRICE
=================     =============     ==================   ================     =============   ================
                                                                                   
$14.88 to $20.06              7,365                   8.26   $          19.17             1,397   $          17.76
$20.50 to $23.88              5,979                   7.47   $          21.23             2,896   $          21.76
$24.38 to $29.44              4,873                   6.76   $          25.46             4,081   $          25.35
- -----------------     -------------     ------------------   ----------------     -------------   ----------------


RESTRICTED STOCK AWARDS
     Pursuant to the 1995 Incentive Stock Plan, employees may be awarded
Occidental restricted common stock at the par value of $.20 per share, with such
shares vesting after four years or earlier under certain conditions. The related
expense is amortized over the vesting period. In 2000, 40,000 shares were
awarded at a weighted-average grant-date value of $21.875 per share; in 1999,
223,902 shares were awarded at a weighted-average grant-date value of $20.563
per share; 85,451 shares were awarded in 1998 at a weighted-average grant-date
value of $28.519 per share; 149,885 shares were awarded in 1997 at a
weighted-average grant-date value of $23.375 per share; 171,649 shares were
awarded in 1996 at a weighted-average grant-date value of $21.431 per share; and
21,339 shares were awarded in 1995 at a weighted-average grant-date value of
$20.875 per share.

PERFORMANCE STOCK AWARDS AND OPTIONS
     Performance stock awards have been made to various executive officers
pursuant to the 1995 Incentive Stock Plan. The number of shares of common stock
to be received, under these awards, by such officers at the end of the
performance period will depend on the attainment of performance objectives based
either on a peer company comparison of total stockholder return for such period,
or in the case of segment employees, a combination of total stockholder return
and return on assets of the segment. The grantees will receive shares of common
stock in an amount ranging from zero to 200 percent of the Target Share Award
(as such amount is defined in the grant). The shares vest or fail to vest by the
end of the four-year performance term. In 2000, awards for 375,654 target shares
were granted at a weighted-average grant-date value of $21.625 per share; in
1999, awards for 502,531 target shares were granted at a weighted-average
grant-date value of $16.875 per share; 134,705 target shares were granted in
1998 at a weighted-average grant-date value of $29.3125 per share; awards for
97,832 target shares were granted in 1997 at a weighted-average grant-date value
of $23.375 per share; and 101,630 target shares were granted in 1996 at a
weighted-average grant-date value of $21.375 per share. In 2000, 101,630 shares
were issued in respect of the target shares granted in 1996.
     In 1997, 4,655,000 Performance Stock Options were granted to certain
executive officers at an exercise price of $25.375. Under the terms of these
grants, as amended in 1999, these options expire 10 years from the grant date
and will become vested upon the earlier of the following events occurring, at
which time the grants become fully vested and exercisable: (a) for twenty
consecutive trading days, the New York Stock Exchange closing price of
Occidental common stock must be $25 or more per share; or (b) July 2, 2002. As
of December 31, 2000, none of the options were exercisable.
     Under the 1995 Stock Incentive Plan, a total of 25,000,000 shares may be
awarded. At December 31, 2000, 2,519,848 shares were available for future awards
under the 1995 Plan, all of which were available to issue stock options, SARs,
restricted stocks and performance stock awards.
     Occidental accounts for these plans under Accounting Principles Board
Opinion No. 25. Had the compensation expense for these plans been determined in
accordance with SFAS No. 123, Accounting for Stock Based Compensation,
Occidental's pro-forma net income would have been $1.6 billion in 2000, $439
million in 1999 and $358 million in 1998. Basic and diluted earnings per share
would have been $4.23 for 2000, $1.22 for 1999 and $.97 for 1998. The method of
accounting under SFAS No. 123 has not been applied to options granted prior to
January 1, 1995; therefore, the resulting pro-forma compensation expense may not
be representative of that to be expected in future years. The fair value of each
option grant, for pro-forma calculation purposes, is estimated using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 2000, 1999 and 1998, respectively: dividend yield
of 4.97, 4.60 and 3.84 percent; expected volatility of 28.37, 23.57 and 22.91
percent; risk-free rate of return of 6.27, 5.86 and 5.45 percent; and expected
lives of 5 years.

1996 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
     Under the 1996 Restricted Stock Plan for Non-Employee Directors, each
non-employee Director of the Company will receive awards of restricted common
stock each year as additional compensation for their services as a member of the
Board of Directors. A maximum of 150,000 shares of common stock may be awarded
under the Directors Plan and 21,000, 18,800 and 3,500 shares of common stock
were awarded during 2000, 1999 and 1998, respectively. At December 31, 2000,
99,950 shares of common stock were available for the granting of future awards.

                                       50


NOTE 12    TRUST PREFERRED SECURITIES
- --------------------------------------------------------------------------------
     In January 1999, Oxy Capital Trust I, a wholly-owned subsidiary of
Occidental, issued 21,000,000 shares of 8.16 percent Trust Originated Preferred
Securities ("Trust Preferred Securities") to the public and 649,485 shares of
Trust Originated Common Securities ("Common Securities") to Occidental. The
proceeds of such issuances were invested by Oxy Capital Trust I in $541.2
million aggregate principal amount of Occidental's 8.16 percent Subordinated
Deferrable Interest Notes due 2039 ("Trust Subordinated Notes"). The Trust
Subordinated Notes represent the sole assets of Oxy Capital Trust I. The Trust
Subordinated Notes mature on January 20, 2039, bear interest at the rate of 8.16
percent payable quarterly and are redeemable in whole, or in part, by Occidental
beginning on January 20, 2004 at 100 percent of the principal amount thereof,
plus any accrued and unpaid interest to the redemption date. The Trust
Subordinated Notes are unsecured obligations of Occidental and are junior in
right of payment to all present and future senior indebtedness of Occidental and
are also effectively subordinate to certain indebtedness of Occidental's
consolidated subsidiaries. Occidental may defer interest payments on the Trust
Subordinated Notes from time to time for a period not exceeding twenty
consecutive quarters. However, any unpaid quarterly interest payments on the
Trust Subordinated Notes will continue to accrue interest at 8.16 percent per
annum.
     Holders of the Trust Preferred Securities and Common Securities are
entitled to cumulative cash distributions at an annual rate of 8.16 percent of
the liquidation amount of $25 per security. The Trust Preferred Securities and
Common Securities will be redeemed upon repayment of the Trust Subordinated
Notes. If Occidental defers interest payments on the Trust Subordinated Notes,
Oxy Capital Trust I will defer distributions on the Trust Preferred Securities
and Common Securities during any deferral period. However, any unpaid quarterly
distributions on the Trust Preferred Securities and Common Securities will
continue to accrue with interest at 8.16 percent per annum.
     Occidental has guaranteed, on a subordinated basis, distributions and other
payments due on the Trust Preferred Securities ("the Guarantee"). The Guarantee,
when taken together with Occidental's obligations under the Trust Subordinated
Notes and the indenture pursuant to which the Trust Subordinated Notes were
issued and Occidental's obligations under the Amended and Restated Declaration
of Trust governing Oxy Capital Trust I, provides a full and unconditional
guarantee of amounts due on the Trust Preferred Securities.
     The Trust Subordinated Notes and the related Oxy Capital Trust I investment
in the Trust Subordinated Notes have been eliminated in consolidation and the
Trust Preferred Securities are reported as Occidental Obligated Mandatorily
Redeemable Trust Preferred Securities of a Subsidiary Trust Holding Solely
Subordinated Notes of Occidental in the accompanying consolidated financial
statements. Distributions on the Trust Preferred Securities are reported under
the caption minority interest in the statement of operations. Total net proceeds
to Occidental were $508 million. The balance reflected in the accompanying
consolidated financial statements at December 31, 2000 and 1999 is net of issue
costs and also reflects amortization of a portion of the issue costs, and the
repurchase in 2000 and 1999 of 555,760 and 937,436 shares with a liquidation
value of $13.9 million and $23.4 million, respectively.

                                       51


NOTE 13    EARNINGS PER SHARE
- --------------------------------------------------------------------------------
     Basic earnings per share was computed by dividing net income, less
preferred dividend requirements, plus the effect of repurchase of Trust
Preferred Securities by the weighted average number of common shares outstanding
during each year. The computation of diluted earnings per share further assumes
the dilutive effect of stock options and the conversion of preferred stocks.
     The following is a calculation of earnings per share for the years ended
December 31 (in millions, except per-share amounts):



                                                          2000                              1999                              1998
                               -------------------------------   -------------------------------   -------------------------------
                                                     PER-SHARE                         Per-Share                         Per-Share
                                  INCOME     SHARES     AMOUNT      Income     Shares     Amount      Income     Shares     Amount
============================   =========  =========  =========   =========  =========  =========   =========  =========  =========
                                                                                              
BASIC EARNINGS PER SHARE
- ------------------------
Earnings from continuing
    operations applicable to
    common stock               $ 1,570.5      369.0  $    4.26   $   562.6      355.4  $    1.58   $   308.1      350.2  $     .88
Discontinued operations, net                                            --                    --        38.4                   .11
Extraordinary gain(loss), net        1.2                    --      (107.4)                 (.30)         --                    --
Cumulative effect of
    changes in accounting
    principles, net                   --                    --       (13.4)                 (.04)         --                    --
                               ---------             ---------   ---------             ---------   ---------             ---------
Earnings applicable to
    common stock               $ 1,571.7             $    4.26   $   441.8             $    1.24   $   346.5             $     .99
                               =========             =========   =========             =========   =========             =========

DILUTED EARNINGS PER SHARE
- --------------------------
Earnings from continuing
    operations applicable to
    common stock               $ 1,570.5      369.0              $   562.6      355.4              $   308.1      350.2
Dilutive effect of exercise of
    options outstanding               --         .2                     --         .1                     --         .4
                               ---------  ---------              ---------  ---------              ---------  ---------
Earnings from continuing
    operations applicable to
    common stock                 1,570.5      369.2  $    4.26       562.6      355.5  $    1.58       308.1      350.6  $     .88
Discontinued operations, net                                            --                    --        38.4                   .11
Extraordinary gain(loss), net        1.2                    --      (107.4)                 (.30)         --                    --
Cumulative effect of
    changes in accounting
    principles, net                   --                    --       (13.4)                 (.04)         --                    --
                               ---------             ---------  ----------             ---------   ---------             ---------
Earnings applicable to
    common stock               $ 1,571.7             $    4.26    $  441.8             $    1.24   $   346.5             $     .99
============================   =========             =========   =========             =========   =========             =========


     The following items were not included in the computation of diluted
earnings per share because their effect was anti-dilutive for the years ended
December 31:



                                                     2000                 1999                 1998
====================================   ==================   ==================   ==================
                                                                        
Stock Options
    Number of shares                                  5.6                  4.6                  1.7
    Price range                        $ 21.250 - $29.438   $ 21.250 - $29.625   $ 24.375 - $29.625
    Expiration range                   4/28/03 - 11/10/09     1/14/00 - 7/8/08    8/20/99 - 12/1/07
Convertible Preferred Stock $3.00
    Number of shares                                   --                   --                 10.5
    Dividends paid                     $               --   $               --   $             16.5
- ------------------------------------   ------------------   ------------------   ------------------


                                       52


NOTE 14    RETIREMENT PLANS AND POSTRETIREMENT BENEFITS
- --------------------------------------------------------------------------------
     Occidental has various defined contribution retirement plans for its
salaried, domestic union and nonunion hourly, and certain foreign national
employees that provide for periodic contributions by Occidental based on
plan-specific criteria, such as base pay, age level and/or employee
contributions. Occidental expensed $55 million in 2000, $46 million in 1999 and
$49 million in 1998 under the provisions of these plans.
     Occidental provides medical and dental benefits and life insurance coverage
for certain active, retired and disabled employees and their eligible
dependents. The benefits generally are funded by Occidental as the benefits are
paid during the year. The cost of providing these benefits is based on claims
filed and insurance premiums paid for the period. The total benefit costs
including the postretirement costs were approximately $69 million in 2000, $67
million in 1999 and $75 million in 1998.
     Pension costs for Occidental's defined benefit pension plans, determined by
independent actuarial valuations, are generally funded by payments to trust
funds, which are administered by independent trustees.
     The following table sets forth the components of the net periodic benefit
costs for Occidental's defined benefit pension and postretirement benefit plans
for 2000, 1999 and 1998 (in millions):



                                                                   Pension Benefits             Postretirement Benefits
                                                  ---------------------------------   ---------------------------------
For the years ended December 31,                       2000        1999        1998        2000        1999        1998
===============================================   =========   =========   =========   =========   =========   =========
                                                                                            
NET PERIODIC BENEFIT COSTS:
Service cost--benefits earned during the period   $       9   $       4   $       5   $       4   $       5   $       5
Interest cost on benefit obligation                      23          24          22          29          25          25
Expected return on plan assets                          (23)        (19)        (17)         --          --          --
Amortization of net transition obligation                --           1           1          --          --          --
Amortization of prior service cost                        1           3           3           1           1           1
Recognized actuarial loss                                (1)         (5)         (2)         (1)         (1)         (2)
Curtailments and settlements                             --          (1)          4          (8)         (4)         --
Currency adjustments                                     (5)         (6)         (3)         --          --          --
                                                  ---------   ---------   ---------   ---------   ---------   ---------
Net period benefit cost                           $       4   $       1   $      13   $      25   $      26   $      29
===============================================   =========   =========   =========   =========   =========   =========


     Occidental recorded adjustments to accumulated other comprehensive income
of $2 million in 2000 and credits of less than $1 million in 1999 and 1998, to
reflect the net-of-tax difference between the additional liability required
under pension accounting provisions and the corresponding intangible asset.
     Occidental's defined benefit pension and postretirement benefit plans are
accrued based on various assumptions and discount rates, as described below. The
actuarial assumptions used could change in the near term as a result of changes
in expected future trends and other factors which, depending on the nature of
the changes, could cause increases or decreases in the liabilities accrued.
     The following table sets forth the reconciliation of the beginning and
ending balances of the benefit obligation for Occidental's defined benefit
pension and postretirement benefit plans (in millions):



                                                                    Pension Benefits     Postretirement Benefits
                                                             -----------------------     -----------------------
                                                                  2000          1999          2000          1999
========================================================     =========     =========     =========     =========
                                                                                           
CHANGES IN BENEFIT OBLIGATION:
Benefit obligation -- beginning of year                      $     261     $     241     $     372     $     344
    Service cost -- benefits earned during the period                9             4             4             5
    Interest cost on projected benefit obligation                   23            24            29            25
    Actuarial (gain)loss                                            --           (22)           15             8
    Foreign currency exchange rate changes                          (6)          (12)           --            --
    Benefits paid                                                  (18)          (19)          (43)          (38)
    Businesses acquired                                             41 (a)        45 (c)        14 (a)        32 (c)
    Divestitures                                                   (16)(b)        --            --            --
    Curtailments and settlements                                     1            --            (8)           (4)
                                                             ---------     ---------     ---------     ---------

Benefit obligation -- end of year                            $     295     $     261     $     383     $     372
========================================================     =========     =========     =========     =========

(a)  Relates to Altura and THUMS.
(b)  Primarily relates to Durez.
(c)  Primarily relates to INDSPEC.

                                       53


     The following table sets forth the reconciliation of the beginning and
ending balances of the fair value of plan assets for Occidental's defined
benefit pension plans (in millions):



                                                             Pension Benefits
                                                      -----------------------
                                                           2000          1999
=================================================     =========     =========
                                                              
CHANGES IN PLAN ASSETS:
Fair value of plan assets -- beginning of year        $    254      $     234
    Actual return on plan assets                            10              8
    Foreign currency exchange rate changes                  (1)            (4)
    Employer contribution                                    2              7
    Benefits paid                                          (18)           (19)
    Businesses acquired                                     21 (a)         28 (c)
    Divestitures                                           (14)(b)         --
                                                      ---------     ---------
Fair value of plan assets -- end of year              $     254     $     254
=================================================     =========     =========

(a)  Relates to Altura and THUMS.
(b)  Primarily relates to Durez.
(c)  Primarily relates to INDSPEC.

     The projected benefit obligation, accumulated benefit obligation and fair
value of plan assets for defined benefit pension plans with accumulated benefit
obligations in excess of plan assets were $103 million, $84 million and $41
million, respectively, as of December 31, 2000 and $60 million, $58 million and
$23 million, respectively, as of December 31, 1999.
     The weighted average discount rate used in determining the benefit
obligations was 7.75 percent as of December 31, 2000 and 1999. The weighted
average rate of increase in future compensation levels used in determining the
benefit obligations was approximately 4.5 percent in 2000 and 1999. The expected
long-term rate of return on assets was 9.0 percent in 2000 and 1999.
     The postretirement benefit obligation was determined by application of the
terms of medical and dental benefits and life insurance coverage, including the
effect of established maximums on covered costs, together with relevant
actuarial assumptions and health care cost trend rates projected at a Consumer
Price Index (CPI) increase of 3.0 percent as of December 31, 2000 and 1999,
(beginning in 1993, participants other than certain union employees pay for all
medical cost increases in excess of increases in the CPI). For certain union
employees, the health care cost trend rates were projected at annual rates
ranging ratably from 7.0 percent in 2000 to 5.0 percent through the year 2004
and level thereafter. A 1.0 percent increase or a 1.0 percent decrease in these
assumed health care cost trend rates would result in an increase of $15 million
or a reduction of $14 million, respectively, in the postretirement benefit
obligation as of December 31, 2000, and an increase or reduction of $1 million
in interest cost in 2000. The annual service costs would not be materially
affected by these changes.
     The following table sets forth the funded status and amounts recognized in
Occidental's consolidated balance sheets for the defined benefit pension and
postretirement benefit plans at December 31, 2000 and 1999 (in millions):



                                                     Pension Benefits     Postretirement Benefits
                                              -----------------------     -----------------------
Balance at December 31,                            2000          1999          2000          1999
=========================================     =========     =========     =========     =========
                                                                            
Funded status                                 $     (41)    $      (7)    $    (383)    $    (372)
Unrecognized net transition obligation                2             2            --            --
Unrecognized prior service cost                       3             3             9            10
Unrecognized net (gain)loss                           7            (5)          (20)          (35)
                                              ---------     ---------     ---------     ---------
Net amount recognized                         $     (29)    $      (7)    $    (394)    $    (397)
                                              =========     =========     =========     =========

Prepaid benefit cost                          $      36     $      37     $      --     $      --
Accrued benefit liability                           (66)          (44)         (394)         (397)
Accumulated other comprehensive income                1            --            --            --
                                              ---------     ---------     ---------     ---------

Net amount recognized                         $     (29)    $      (7)    $    (394)    $    (397)
=========================================     =========     =========     =========     =========


                                       54


NOTE 15   INVESTMENTS AND TRANSACTIONS WITH AFFILIATES
- --------------------------------------------------------------------------------
     Investments in entities, other than oil and gas exploration and production
companies, in which Occidental has a voting stock interest of at least 20
percent, but not more than 50 percent, and certain partnerships are accounted
for on the equity method. At December 31, 2000, Occidental's equity investments
consisted of a 29.5 percent interest in Equistar acquired in May 1998 and
various chemical partnerships and joint ventures. Equity investments paid
dividends of $99 million, $100 million and $69 million to Occidental in 2000,
1999 and 1998, respectively. Cumulative undistributed earnings since
acquisition, in the amount of $49 million, of 50-percent-or-less-owned companies
have been accounted for by Occidental under the equity method. At December 31,
2000 and 1999, Occidental's investment in equity investees exceeded the
historical underlying equity in net assets by approximately $128 million and
$155 million, respectively, which is being amortized into income over periods
not exceeding 40 years.
     Occidental and its subsidiaries' purchases from certain chemical
partnerships, in which it has investments, were $755 million, $860 million and
$350 million in 2000, 1999 and 1998, respectively. Occidental and its
subsidiaries' sales to certain chemical partnerships, in which it has
investments, were $217 million, $251 million and $266 million, in 2000, 1999 and
1998, respectively.
     The following table presents Occidental's proportional interest in the
summarized financial information of its equity method investments (in millions):



For the years ended December 31,             2000        1999        1998
=====================================   =========   =========   =========
                                                       
Revenues                                $   2,735   $   2,491   $   2,118
Costs and expenses                          2,668       2,450       2,140
                                        ---------   ---------   ---------
Net income(loss)                        $      67   $      41   $     (22)
=====================================   =========   =========   =========

Balance at December 31,                      2000        1999
=====================================   =========   =========

Current assets                          $   1,576   $     680
Noncurrent assets                       $   5,950   $   2,890
Current liabilities                     $     867   $     483
Noncurrent liabilities                  $   2,915   $   1,632
Stockholders' equity                    $   3,744   $   1,455
- -------------------------------------   ---------   ---------


    Investments also include certain cost method investments, in which
Occidental owns less than 20 percent of the voting stock.


NOTE 16    INDUSTRY SEGMENTS AND GEOGRAPHIC AREAS
- --------------------------------------------------------------------------------
     Effective January 1, 1998, Occidental adopted the provisions of SFAS No.
131--"Disclosures about Segments of an Enterprise and Related Information."
Occidental has identified two reportable segments through which it conducts its
continuing operations: oil and gas and chemical. The factors for determining the
reportable segments were based on the distinct nature of their operations. They
are managed as separate business units because each requires and is responsible
for executing a unique business strategy. The oil and gas segment explores for,
develops, produces and markets crude oil and natural gas domestically and
internationally. The chemical segment manufactures and markets, domestically and
internationally, basic chemicals, specialty chemicals and vinyls. Additionally,
it has an investment in a petrochemical partnership.
     Earnings of industry segments and geographic areas exclude interest income,
interest expense, environmental remediation expenses, unallocated corporate
expenses, discontinued operations, cumulative effect of changes in accounting
principles and extraordinary items, but include income from equity investments
and gains and losses from dispositions of segment and geographic area assets.
Intersegment sales and transfers between geographic areas are made at prices
approximating current market values.
     Foreign income and other taxes and certain state taxes are included in
segment earnings on the basis of operating results. U.S. federal income taxes
are not allocated to segments except for amounts in lieu thereof that represent
the tax effect of operating charges resulting from purchase accounting
adjustments, which arose from the implementation in 1992 of SFAS No. 109 -
"Accounting for Income Taxes," and the tax effects resulting from major,
infrequently occurring transactions such as asset sales and legal settlements
that relate to segment results.
     Identifiable assets are those assets used in the operations of the
segments. Corporate assets consist of cash, short-term investments, certain
corporate receivables, an intrastate pipeline and other assets.

                                       55



INDUSTRY SEGMENTS
In millions



                                                                    Oil and Gas        Chemical       Corporate           Total
===============================================================     ===========     ===========     ===========     ===========
                                                                                                        
YEAR ENDED DECEMBER 31, 2000
    Net sales (a)                                                   $     9,779 (b) $     3,795 (c) $        --     $    13,574
                                                                    ===========     ===========     ===========     ===========

    Pretax operating profit(loss) (d)                               $     3,012     $       176     $      (177)(f) $     3,011
    Income taxes                                                           (595)             (7)           (840)(g)      (1,442)
    Extraordinary loss, net                                                  --              --               1               1
    Cumulative effect of changes in accounting principles, net               --              --              --              --
                                                                    -----------     -----------     -----------     -----------
    Net income(loss) (e)                                            $     2,417 (h) $       169 (i) $    (1,016)(j) $     1,570
                                                                    ===========     ===========     ===========     ===========
    Unconsolidated equity investments                               $        67     $     1,203     $        57     $     1,327
                                                                    ===========     ===========     ===========     ===========
    Property, plant and equipment additions, net (n)                $       791     $       155     $         6     $       952
                                                                    ===========     ===========     ===========     ===========
    Depreciation, depletion and amortization                        $       670     $     190       $        41     $       901
                                                                    ===========     ===========     ===========     ===========
    Total assets                                                    $    13,384     $     4,848     $     1,182 (o) $    19,414
===============================================================     ===========     ===========     ===========     ===========

YEAR ENDED DECEMBER 31, 1999
    Net sales (a)                                                   $     4,599 (b) $     3,221 (p) $        --     $     7,820
                                                                    ===========     ===========     ===========     ===========

    Pretax operating profit(loss) (d)                               $     1,841     $       (23)    $      (619)(f) $     1,199
    Income taxes                                                           (574)            (14)            (43)(g)        (631)
    Extraordinary loss, net                                                  --              --            (107)           (107)
    Cumulative effect of changes in accounting principles, net               --              --             (13)            (13)
                                                                    -----------     -----------     -----------     -----------
    Net income(loss) (e)                                            $     1,267 (k) $       (37)(l) $      (782)(m) $       448
                                                                    ===========     ===========     ===========     ===========
    Unconsolidated equity investments                               $       119     $     1,388     $       247     $     1,754
                                                                    ===========     ===========     ===========     ===========
    Property, plant and equipment additions, net (n)                $       474     $       116     $        11     $       601
                                                                    ===========     ===========     ===========     ===========
    Depreciation, depletion and amortization                        $       577     $       190     $        38     $       805
                                                                    ===========     ===========     ===========     ===========
    Total assets                                                    $     7,271     $     5,346     $     1,508 (o) $    14,125
===============================================================     ===========     ===========     ===========     ===========

YEAR ENDED DECEMBER 31, 1998
    Net sales (a)                                                   $     3,650 (b) $     3,155 (q) $        --     $     6,805
                                                                    ===========     ===========     ===========     ===========

    Pretax operating profit(loss) (d)                               $       982     $       283     $      (577)(f) $       688
    Income taxes                                                           (390)              4              23 (g)        (363)
    Discontinued operations, net                                             --              --              38              38
                                                                    -----------     -----------     -----------     -----------
    Net income(loss)(e)                                             $       592 (r) $       287 (s) $      (516)(t) $       363
                                                                    ===========     ===========     ===========     ===========
    Unconsolidated equity investments                               $       120     $     1,586     $       253     $     1,959
                                                                    ===========     ===========     ===========     ===========
    Property, plant and equipment additions, net (n)                $       751     $       321     $         2     $     1,074
                                                                    ===========     ===========     ===========     ===========
    Depreciation, depletion and amortization                        $       603     $       199     $        33     $       835
                                                                    ===========     ===========     ===========     ===========
    Total assets                                                    $     7,570     $     4,799     $     2,883 (o) $    15,252
===============================================================     ===========     ===========     ===========     ===========

See footnotes on following page

                                       56


(a)  Occidental has implemented EITF Issue No. 00-10, "Shipping and Handling
     Fees and Costs" effective with the fourth quarter of 2000. As a result of
     this adoption, Occidental has added to revenues and cost of sales amounts
     of transportation costs that previously had been accounted for as
     deductions from revenues. There is no effect on income. Oil and gas
     revenues include $29 million, $27 million and $29 million for 2000, 1999
     and 1998, respectively. Chemical revenues include $216 million, $183
     million and $180 million for 2000, 1999 and 1998, respectively.
(b)  Oil sales represented approximately 70 percent, 71 percent and 76 percent
     of net sales for the periods ending December 31, 2000, 1999 and 1998,
     respectively.
(c)  Of total product sales, approximately 32 percent were in basic chemicals,
     47 percent in commodity vinyl resins and 18 percent in specialty chemicals
     prior to intercompany eliminations.
(d)  Research and development costs were $16 million in 2000, $20 million in
     1999 and $18 million in 1998.
(e)  Segment earnings include charges and credits in lieu of U.S. federal income
     taxes. In 2000, the amounts allocated to the segments were charges of $32
     million and a credit of $7 million in oil and gas and chemical,
     respectively. In 1999, the amounts allocated to the segments were a charge
     of $228 million and a credit of $16 million in oil and gas and chemical,
     respectively. In 1998, the amounts allocated to the segments were charges
     of $202 million and credits of $26 million in oil and gas and chemical,
     respectively. 2000, 1999 and 1998 reflect allocation of taxes to segments
     for major, infrequently occurring transactions.
(f)  Includes unallocated net interest expense, administration expense, pipeline
     lease income, pipeline depreciation expense and other items.
(g)  Includes unallocated income taxes.
(h)  Includes an after-tax gain of $39 million related to the sale of an
     interest in certain of Occidental's Gulf of Mexico assets, an after-tax
     gain on a receipt of a contingency payment of $41 million related to a
     prior year sale of a Dutch North Sea subsidiary, a net pre-tax charge of
     $53 million for the write-down of various oil and gas assets and
     investments and an after-tax loss of $14 million related to the sale of an
     office building.
(i)  Includes a pre-tax charge of $120 million resulting from the decision to
     exit several chemical intermediate businesses, an after-tax gain of $13
     million on the sale of the Durez business, a pre-tax charge of $15 million
     for the write-down of various assets, and a $2 million after-tax loss
     resulting from a decision to abandon a foreign investment.
(j)  Includes an after-tax gain of approximately $300 million related to the
     sale of Occidental's 29.2 percent interest in CanadianOxy, a pre-tax gain
     of $11 million related to an insurance dividend and a $17 million charge
     for litigation settlement.
(k)  Includes a net after-tax gain of $488 million related to a litigation
     settlement with Chevron, a gain of $11 million related to the receipt of a
     contingency payment, a charge of $9 million for the write-down of various
     assets, a charge of $25 million for claims and settlements, a charge of $10
     million for the closing of the oil and gas offices in Bakersfield,
     California and a $29 million, net after-tax charge for the write-down of
     Occidental's Peru producing assets.
(l)  Includes pre-tax charges of $159 million for the write-down of various
     assets, $28 million for write-downs by Equistar, $9 million for claims and
     settlements and a gain of $12 million related to the sale of a chemical
     plant by Equistar.
(m)  Includes a pre-tax gain of $18 million related to an insurance dividend.
(n)  Excludes acquisitions of other businesses and formation of OxyVinyls.
     Amounts exclude $3.8 billion in oil and gas in 2000, $976 million in
     chemical in 1999 and $3.5 billion in oil and gas in 1998, but include
     capitalized interest of $3 million in 2000, $4 million in 1999 and $16
     million in 1998.
(o)  Includes the net assets of an intrastate pipeline. At December 31, 1998,
     this amount also includes a note receivable of approximately $1.4 billion.
(p)  Of total product sales, approximately 35 percent were in basic chemicals,
     40 percent in commodity vinyl resins and 23 percent in specialty chemicals
     prior to intercompany eliminations.
(q)  Of total product sales, approximately 41 percent were in basic chemicals,
     19 percent in commodity vinyl resins and 24 percent in specialty chemicals
     prior to intercompany eliminations.
(r)  Includes net after-tax gains of approximately $317 million from the sale of
     major nonstrategic oil and gas properties, a pre-tax $30 million charge for
     the write-off of certain exploration projects and a $12 million pre-tax
     reorganization charge.
(s)  Includes $30 million pre-tax for reorganization and other charges.
(t)  Includes an after-tax $38 million benefit which reflects the closing of the
     sale of MidCon and the finalization of the discontinued operations reserve.

GEOGRAPHIC AREAS
In millions



                                                  Net sales (a)               Property, plant and equipment, net
                                      ------------------------------------   ------------------------------------
For the years ended December 31,            2000         1999         1998         2000         1999         1998
===================================   ==========   ==========   ==========   ==========   ==========   ==========
                                                                                     
    United States                     $   11,101   $    5,958   $    5,453   $   11,890   $    8,504   $    8,162
    Qatar                                    747          507          426          825          794          790
    Yemen                                    435          254          123          229          222          183
    Colombia                                 392          329          142          104           78           89
    Canada                                   189          117           10           29            7            6
    Russia                                   180          111           83           66           72           82
    Ecuador                                  148           76           51           85          102          114
    Oman                                     116          116           93           99           88          101
    Other Foreign                            266          352          424          144          162          378
                                      ----------   ----------   ----------   ----------   ----------   ----------
        Total                         $   13,574   $    7,820   $    6,805   $   13,471   $   10,029   $    9,905
===================================   ==========   ==========   ==========   ==========   ==========   ==========

(a)  Sales are shown by individual country based on the location of the entity
     making the sale.

                                       57


NOTE 17    COSTS AND RESULTS OF OIL AND GAS PRODUCING ACTIVITIES
- --------------------------------------------------------------------------------
     Capitalized costs relating to oil and gas producing activities and related
accumulated depreciation, depletion and amortization, were as follows (in
millions):



                                                                      United          Latin        Eastern          Total
                                                                      States        America     Hemisphere      Worldwide
=============================================================     ==========     ==========     ==========     ==========
                                                                                                   
DECEMBER 31, 2000
    Proved properties                                             $    8,616     $      618     $    2,369     $   11,603
    Unproved properties                                                1,970             19             77          2,066
                                                                  ----------     ----------     ----------     ----------

    TOTAL PROPERTY COSTS(a)                                           10,586            637          2,446         13,669
    Support facilities                                                   244             40             76            360
                                                                  ----------     ----------     ----------     ----------

    TOTAL CAPITALIZED COSTS                                           10,830            677          2,522         14,029
    Accumulated depreciation, depletion and amortization              (2,299)          (484)        (1,213)        (3,996)
                                                                  ----------     ----------     ----------     ----------
NET CAPITALIZED COSTS                                             $    8,531     $      193     $    1,309     $   10,033
=============================================================     ==========     ==========     ==========     ==========

DECEMBER 31, 1999
    Proved properties                                             $    4,884     $    1,580     $    2,141     $    8,605
    Unproved properties                                                2,136             25             45          2,206
                                                                  ----------     ----------     ----------     ----------

    TOTAL PROPERTY COSTS(a)                                            7,020          1,605          2,186         10,811
    Support facilities                                                    23             94             72            189
                                                                  ----------     ----------     ----------     ----------

    TOTAL CAPITALIZED COSTS                                            7,043          1,699          2,258         11,000
    Accumulated depreciation, depletion and amortization              (2,103)        (1,500)        (1,006)        (4,609)
                                                                  ----------     ----------     ----------     ----------

NET CAPITALIZED COSTS                                             $    4,940     $      199     $    1,252     $    6,391
                                                                  ==========     ==========     ==========     ==========
Share of equity investees' net capitalized costs(b)               $       94     $      337 (c) $       94     $      525
=============================================================     ==========     ==========     ==========     ==========

DECEMBER 31, 1998
    Proved properties                                             $    5,821     $    1,571     $    2,015     $    9,407
    Unproved properties                                                1,749              9             58          1,816
                                                                  ----------     ----------     ----------     ----------

    TOTAL PROPERTY COSTS(a)                                            7,570          1,580          2,073         11,223
    Support facilities                                                    16            141             69            226
                                                                  ----------     ----------     ----------     ----------

    TOTAL CAPITALIZED COSTS                                            7,586          1,721          2,142         11,449
    Accumulated depreciation, depletion and amortization              (2,561)        (1,401)          (812)        (4,774)
                                                                  ----------     ----------     ----------     ----------

NET CAPITALIZED COSTS                                             $    5,025     $      320     $    1,330     $    6,675
                                                                  ==========     ==========     ==========     ==========
Share of equity investees' net capitalized costs(b)               $       50     $      150 (c) $      112     $      312
=============================================================     ==========     ==========     ==========     ==========

(a)  Includes costs related to leases, exploration costs, lease and well
     equipment, pipelines and terminals, gas plants and other equipment.
(b)  Excludes amounts applicable to synthetic fuels.
(c)  Includes amounts in Latin America and Canada.

                                       58


     Costs incurred relating to oil and gas producing activities, whether
capitalized or expensed, were as follows (in millions):



                                              United          Latin        Eastern          Total
                                              States        America     Hemisphere      Worldwide
=====================================     ==========     ==========     ==========     ==========
                                                                           
DECEMBER 31, 2000
    Acquisition of properties
        Proved                            $    3,690     $       42     $       21     $    3,753
        Unproved                                   7             --              1              8
    Exploration costs                             56             58             20            134
    Development costs                            339 (a)         32            208            579
                                          ----------     ----------     ----------     ----------
                                          $    4,092     $      132     $      250     $    4,474
=====================================     ==========     ==========     ==========     ==========

DECEMBER 31, 1999
    Acquisition of properties
        Proved                            $       26     $       --     $       22     $       48
        Unproved                                  16             --              2             18
    Exploration costs                             66             11             26            103
    Development costs                            126             12            164            302
                                          ----------     ----------     ----------     ----------
                                          $      234     $       23     $      214     $      471
                                          ==========     ==========     ==========     ==========
Share of equity investees' costs          $       18     $       39 (b) $       45     $      102
=====================================     ==========     ==========     ==========     ==========

DECEMBER 31, 1998
    Acquisition of properties
        Proved                            $    1,834     $       --     $       26     $    1,860
        Unproved                               1,709             --              2          1,711
    Exploration costs                             32             24             84            140
    Development costs                            169             35            341            545
                                          ----------     ----------     ----------     ----------
                                          $    3,744     $       59     $      453     $    4,256
                                          ==========     ==========     ==========     ==========
Share of equity investees' costs          $      46      $       62 (b) $       66     $      174
=====================================     ==========     ==========     ==========     ==========

(a)  Excludes costs related to the acquisition of CO2 properties and capitalized
     CO2.
(b)  Includes amounts in Latin America and Canada.

                                       59


     The results of operations of Occidental's oil and gas producing activities,
which exclude oil and gas trading activities and items such as asset
dispositions, corporate overhead and interest, were as follows (in millions):



                                                                   United          Latin        Eastern          Total
                                                                   States        America (a) Hemisphere      Worldwide
==========================================================     ==========     ==========     ==========     ==========
                                                                                                
FOR THE YEAR ENDED DECEMBER 31, 2000
    Revenues                                                   $    2,762     $      461     $    1,567 (b) $    4,790
    Production costs                                                  540             66            179            785
    Exploration expenses                                               50             31             13             94
    Other operating expenses                                          141             27             47            215
    Depreciation, depletion and amortization                          444 (c)         35            182            661
                                                               ----------     ----------     ----------     ----------

    PRETAX INCOME                                                   1,587            302          1,146          3,035
    Income tax expense(d)                                             366            147            538 (b)      1,051
                                                               ----------     ----------     ----------     ----------
    RESULTS OF OPERATIONS                                      $    1,221     $      155     $      608     $    1,984
==========================================================     ==========     ==========     ==========     ==========

FOR THE YEAR ENDED DECEMBER 31, 1999
    Revenues                                                   $    1,011     $      450     $    1,042 (b) $    2,503
    Production costs                                                  218             92            142            452
    Exploration expenses                                               40              9             26             75
    Other operating expenses                                           49             44             77            170
    Other expense--asset write-downs                                   --             44             --             44
    Depreciation, depletion and amortization                          290 (c)         57            207            554
                                                               ----------     ----------     ----------     ----------

    PRETAX INCOME                                                     414            204            590          1,208
    Income tax expense(d)                                              34             81            251 (b)        366
                                                               ----------     ----------     ----------     ----------
    RESULTS OF OPERATIONS                                      $      380     $      123     $      339     $      842
                                                               ==========     ==========     ==========     ==========
    Share of equity investees' results of operations(e)        $       (1)    $      (11)(f) $       33     $       21
==========================================================     ==========     ==========     ==========     ==========

FOR THE YEAR ENDED DECEMBER 31, 1998
    Revenues                                                   $      860     $      280     $      818 (b) $    1,958
    Production costs                                                  242            106            168            516
    Exploration expenses                                               43             26             59            128
    Other operating expenses                                           79             36             98            213
    Other expense--asset write-downs                                   --             --             30             30
    Depreciation, depletion and amortization                          285 (c)         68            239            592
                                                               ----------     ----------     ----------     ----------

    PRETAX INCOME                                                     211             44            224            479
    Income tax expense(d)                                              --             25            145 (b)        170
                                                               ----------     ----------     ----------     ----------
    RESULTS OF OPERATIONS                                      $      211     $       19     $       79     $      309
                                                               ==========     ==========     ==========     ==========
    Share of equity investees' results of operations(e)        $       --     $      (28)(f) $       18     $      (10)
==========================================================     ==========     ==========     ==========     ==========

(a)  Includes amounts applicable to operating interests in which Occidental
     received an agreed-upon fee per barrel of crude oil produced in 1999 and
     1998.
(b)  Revenues and income tax expense include taxes owed by Occidental but paid
     by governmental entities on its behalf.
(c)  Includes credits of $5 million in 2000, $8 million in 1999 and $12 million
     in 1998, under the method of allocating amounts in lieu of taxes.
(d)  U.S. federal income taxes reflect expense allocations related to oil and
     gas activities, including allocated interest and corporate overhead.
     Foreign income taxes were included in geographic areas on the basis of
     operating results.
(e)  Equity investee results of operations are reflected in the geographic area
     in which the producing operation is located.
(f)  Includes amounts in Latin America and Canada.

                                       60


RESULTS PER UNIT OF PRODUCTION (Unaudited)


                                                          United          Latin        Eastern          Total
                                                          States        America     Hemisphere      Worldwide
=================================================     ==========     ==========     ==========     ==========
                                                                                       
FOR THE YEAR ENDED DECEMBER 31, 2000
    Revenues from net production
        Oil ($/bbl.)                                  $    27.40     $    25.85     $    34.06 (a) $    29.51
                                                      ==========     ==========     ==========     ==========
        Natural gas ($/Mcf)                           $     3.73     $       --     $     2.02     $     3.61
                                                      ==========     ==========     ==========     ==========

    Barrel of oil equivalent ($/bbl.)(b,c)            $    25.57     $    25.85     $    32.65 (a) $    27.53
    Production costs                                        5.00           3.67           3.73           4.51
    Exploration expenses                                     .46           1.72            .27            .54
    Other operating expenses                                1.31           1.50            .98           1.24
    Depreciation, depletion and amortization                4.11           1.94           3.79           3.80
                                                      ----------     ----------     ----------     ----------
    PRETAX INCOME                                          14.69          17.02          23.88          17.44
    Income tax expense                                      3.39           8.17          11.21 (a)       6.04
                                                      ----------     ----------     ----------     ----------
    RESULTS OF OPERATIONS                             $    11.30     $     8.85     $    12.67     $    11.40
=================================================     ==========     ==========     ==========     ==========

FOR THE YEAR ENDED DECEMBER 31, 1999
    Revenues from net production
        Oil ($/bbl.)                                  $    16.56     $    12.84     $    20.32 (a) $    17.06
                                                      ==========     ==========     ==========     ==========
        Natural gas ($/Mcf)                           $     2.09     $       --     $     1.17     $     2.02
                                                      ==========     ==========     ==========     ==========

    Barrel of oil equivalent ($/bbl.)(b,c)            $    14.24     $    12.84     $    19.66 (a) $    15.74
    Production costs                                        3.07           2.63           2.68           2.84
    Exploration expenses                                     .56            .25            .50            .47
    Other operating expenses                                 .69           1.25           1.45           1.07
    Other expense--asset write-downs                          --           1.25             --            .28
    Depreciation, depletion and amortization                4.09           1.63           3.90           3.48
                                                      ----------     ----------     ----------     ----------
    PRETAX INCOME                                           5.83           5.83          11.13           7.60
    Income tax expense                                       .48           2.30           4.73 (a)       2.30
                                                      ----------     ----------     ----------     ----------
    RESULTS OF OPERATIONS                             $     5.35     $     3.53     $     6.40     $     5.30
=================================================     ==========     ==========     ==========     ==========

FOR THE YEAR ENDED DECEMBER 31, 1998
    Revenues from net production
        Oil ($/bbl.)                                  $    11.79     $     8.48     $    13.43 (a) $    11.65
                                                      ==========     ==========     ==========     ==========
        Natural gas ($/Mcf)                           $     2.05     $       --     $     2.03     $     2.04
                                                      ==========     ==========     ==========     ==========

    Barrel of oil equivalent ($/bbl.)(b,c)            $    12.11     $     8.48     $    13.41 (a) $    11.87
    Production costs                                        3.41           3.21           2.75           3.13
    Exploration expenses                                     .61            .79            .98            .78
    Other operating expenses                                1.11           1.09           1.61           1.29
    Other expense--asset write-downs                          --             --            .49            .18
    Depreciation, depletion and amortization                4.01           2.06           3.91           3.59
                                                      ----------     ----------     ----------     ----------
    PRETAX INCOME                                           2.97           1.33           3.67           2.90
    Income tax expense                                        --            .75           2.37 (a)       1.03
                                                      ----------     ----------     ----------     ----------
    RESULTS OF OPERATIONS                             $     2.97     $      .58     $     1.30     $     1.87
=================================================     ==========     ==========     ==========     ==========


(a)  Revenues and income tax expense include taxes owed by Occidental but paid
     by governmental entities on its behalf; however, oil revenues from net
     production per barrel, as shown in the "Management's Discussion and
     Analysis," excludes these taxes.
(b)  Natural gas volumes have been converted to equivalent barrels based on
     energy content of six Mcf of gas to one barrel of oil.
(c)  Revenues from net production exclude royalty payments and other
     adjustments.

                                       61





2000 QUARTERLY FINANCIAL DATA (Unaudited)                                           Occidental Petroleum Corporation
In millions, except per-share amounts                                                               and Subsidiaries

Three months ended                                       MARCH 31          JUNE 30     SEPTEMBER 30      DECEMBER 31
================================================     ============     ============     ============     ============
                                                                                            
Segment net sales
    Oil and gas                                      $      1,534     $      2,128     $      2,972     $      3,145
    Chemical                                                1,040            1,067              891              797
                                                     ------------     ------------     ------------     ------------
Net sales                                            $      2,574     $      3,195     $      3,863     $      3,942
                                                     ============     ============     ============     ============

Gross profit                                         $        787     $        952     $      1,036     $        967
                                                     ============     ============     ============     ============

Segment earnings(loss)
    Oil and gas                                      $        394     $        557     $        696     $        770
    Chemical                                                  143               34               47              (55)
                                                     ------------     ------------     ------------     ------------
                                                              537              591              743              715
Unallocated corporate items
    Interest expense, net                                     (99)            (104)             (97)             (80)
    Income taxes                                             (150)            (349)            (169)            (193)
    Trust preferred distributions and other                   (17)             (16)             (17)             (17)
    Other                                                      --              442              (59)             (92)
                                                     ------------     ------------     ------------     ------------

Income before extraordinary items                             271              564              401              333
Extraordinary gain, net                                        --               --                1               --
                                                     ------------     ------------     ------------     ------------
Net income                                           $        271 (a) $        564 (b) $        402 (c) $        333 (d)
                                                     ============     ============     ============     ============

Basic earnings per common share
    Income before extraordinary items                $       0.74     $       1.53     $       1.09     $       0.90
    Extraordinary gain, net                                    --               --               --               --
                                                     ------------     ------------     ------------     ------------
Basic earnings per common share                      $       0.74     $       1.53     $       1.09     $       0.90
                                                     ============     ============     ============     ============

Diluted earnings per common share
    Income before extraordinary items                $       0.74     $       1.53     $       1.09     $       0.90
    Extraordinary gain, net                                    --               --               --               --
                                                     ------------     ------------     ------------     ------------
Diluted earnings per common share                    $       0.74     $       1.53     $       1.09     $       0.90
                                                     ============     ============     ============     ============


Dividends per common share                           $       0.25     $       0.25     $       0.25     $       0.25
                                                     ============     ============     ============     ============

Market price per common share
    High                                             $      22.38     $      24.13     $      24.46     $      25.50
    Low                                              $      15.75     $      20.13     $      18.69     $      19.38
================================================     ============     ============     ============     ============

(a)  Includes an insurance dividend of $11 million.
(b)  Includes a gain of $493 million related to the sale of CanadianOxy and a
     charge of $120 million to write-down the chemical intermediate businesses.
(c)  Includes an after-tax gain of $39 million related to the sale of an
     interest in Occidental's Gulf of Mexico assets, an after-tax gain of $41
     million on the receipt of a contingency payment related to a prior year
     sale of a Dutch North Sea subsidiary, and a charge of $53 million for the
     write-down of various oil and gas assets and investments and a write-down
     of a building of $21 million.
(d)  Includes a $13 million gain on sale of the Durez business, a charge of $17
     million related to a litigation settlement, a charge of $15 million related
     to a write-down of various chemical assets and an after-tax loss of $2
     million on the abandonment of a foreign investment.

                                       62




1999 QUARTERLY FINANCIAL DATA (Unaudited)                                                 Occidental Petroleum Corporation
In millions, except per-share amounts                                                                     and Subsidiaries

Three months ended                                             March 31          June 30     September 30      December 31
======================================================     ============     ============     ============     ============
                                                                                                  
Segment net sales
    Oil and gas                                            $        752     $        950     $      1,271     $      1,626
    Chemical                                                        634              746              899              942
                                                           ------------     ------------     ------------     ------------
Net sales                                                  $      1,386     $      1,696     $      2,170     $      2,568
                                                           ============     ============     ============     ============

Gross profit                                               $        257     $        367     $        513     $        664
                                                           ============     ============     ============     ============

Segment earnings (loss)
    Oil and gas                                            $         65     $        166     $        280     $        756
    Chemical                                                         12               33               44             (126)
                                                           ------------     ------------     ------------     ------------
                                                                     77              199              324              630
Unallocated corporate items
    Interest expense, net                                          (116)            (123)            (118)            (111)
    Income taxes                                                      3              (27)             (41)              (3)
    Trust preferred distributions and other                         (14)             (15)             (16)             (17)
    Other                                                            (7)             (22)             (23)             (12)
                                                           ------------     ------------     ------------     ------------

Income(loss) before extraordinary items and effect
    of changes in accounting principles                             (57)              12              126              487
Extraordinary loss, net                                              --               (3)              --             (104)
Cumulative effect of changes in accounting
    principles, net                                                 (13)              --               --               --
                                                           ------------     ------------     ------------     ------------
Net income(loss)                                           $        (70)    $          9 (a) $        126 (b) $        383 (c)
                                                           ============     ============     ============     ============

Basic earnings per common share
    Income(loss) before extraordinary items and effect
        of changes in accounting principles                $       (.17)    $       .03      $        .35     $       1.33
    Extraordinary loss, net                                          --            (.01)               --             (.29)
    Cumulative effect of changes in accounting
        principles, net                                            (.04)             --                --               --
                                                           ------------     ------------     ------------     ------------
Basic earnings(loss) per common share                      $       (.21)    $        .02     $       .35      $       1.04
                                                           ============     ============     ============     ============

Diluted earnings per common share
    Income(loss) before extraordinary items and effect
        of changes in accounting principles                $       (.17)    $        .03     $        .35     $       1.33
    Extraordinary loss, net                                          --             (.01)              --             (.29)
    Cumulative effect of changes in accounting
        principles, net                                            (.04)              --               --               --
                                                           ------------     ------------     ------------     ------------
Diluted earnings(loss) per common share                    $       (.21)    $        .02     $        .35     $       1.04
                                                           ============     ============     ============     ============
Dividends per common share                                 $        .25     $        .25     $        .25     $        .25
                                                           ============     ============     ============     ============

Market price per common share
    High                                                   $      18.25     $      22.25     $      23.81     $      24.19
    Low                                                    $      14.75     $      18.06     $      19.00     $      19.94
======================================================     ============     ============     ============     ============

(a)  Includes $12 million gain on the sale of a chemical plant by Equistar.
(b)  Includes net pre-tax gains of $11 million related to the receipt of a
     contingent payment and a $10 million charge for the closing of the oil and
     gas offices in Bakersfield, California.
(c)  Includes net after-tax gains of $488 million for a favorable litigation
     settlement, and charges of $29 million (after-tax benefits) related to the
     sale of Occidental's Peru producing assets, and pre-tax charges of $34
     million for claims and settlements, $28 million for Occidental's share of
     asset write-downs in Equistar and asset write-downs of $168 million.

                                       63


SUPPLEMENTAL OIL AND GAS INFORMATION (Unaudited)

     The following tables set forth Occidental's net interests in quantities of
proved developed and undeveloped reserves of crude oil, condensate and natural
gas and changes in such quantities. Crude oil reserves (in millions of barrels)
include condensate. The reserves are stated after applicable royalties.
Estimates of reserves have been made by Occidental engineers. These estimates
include reserves in which Occidental holds an economic interest under service
contracts, production sharing contracts and other arrangements.

RESERVES
Oil in millions of barrels, natural gas in billions of cubic feet



                                                                United                Latin             Eastern               Total
                                                                States              America          Hemisphere           Worldwide
                                                        --------------      ---------------     ---------------     ---------------
                                                         Oil       Gas       Oil  (a)  Gas       Oil       Gas       Oil       Gas
===================================================     =====     =====     =====     =====     =====     =====     =====     =====
                                                                                                      
PROVED DEVELOPED AND UNDEVELOPED RESERVES

BALANCE AT DECEMBER 31, 1997                              197     1,635       316        --       387       823       900     2,458
    Revisions of previous estimates                        (6)       40       (21)       --        (5)       20       (32)       60
    Improved recovery                                      10         6        --        --        49        --        59         6
    Extensions and discoveries                              1        48        --        --        27        81        28       129
    Purchases of proved reserves                          318       710        45        --        35        --       398       710
    Sales of proved reserves                              (46)     (317)     (113)       --       (11)     (641)     (170)     (958)
    Production                                            (29)     (224)      (33)       --       (55)      (32)     (117)     (256)
- ---------------------------------------------------     -----     -----     -----     -----     -----     -----     -----     -----

BALANCE AT DECEMBER 31, 1998                              445     1,898       194        --       427       251     1,066     2,149
    Revisions of previous estimates                         2       111        78        --       (65)       12        15       123
    Improved recovery                                      32        54        --        --         9        --        41        54
    Extensions and discoveries                             31        49        --        --         9        --        40        49
    Purchases of proved reserves                            3        66        --        --         8        --        11        66
    Sales of proved reserves                              (22)     (130)       --        --        (2)     (158)      (24)     (288)
    Production                                            (27)     (242)      (35)       --       (50)      (19)     (112)     (261)
- ---------------------------------------------------     -----     -----     -----     -----     -----     -----     -----     -----

BALANCE AT DECEMBER 31, 1999                              464     1,806       237        --       336        86     1,037     1,892
    Revisions of previous estimates                        29       179        12        --        22        44        63       223
    Improved recovery                                      41        25        --        --         1        --        42        25
    Extensions and discoveries                             24       108         5        --         7         4        36       112
    Purchases of proved reserves                          881       417        19        --        --        --       900       417
    Sales of proved reserves                              (30)     (200)     (120)       --        --        --      (150)     (200)
    Production                                            (63)     (241)      (18)       --       (44)      (18)     (125)     (259)
- ---------------------------------------------------     -----     -----     -----     -----     -----     -----     -----     -----

BALANCE AT DECEMBER 31, 2000                            1,346     2,094       135        --       322       116     1,803     2,210
===================================================     =====     =====     =====     =====     =====     =====     =====     =====

PROPORTIONAL INTEREST IN EQUITY INVESTEES' RESERVES

    December 31, 1997                                       5        45        45 (b)   168 (b)    27        25        77       238
                                                        =====     =====     =====     =====     =====     =====     =====     =====
    December 31, 1998                                       5        49        44 (b)   138 (b)    34        --        83       187
                                                        =====     =====     =====     =====     =====     =====     =====     =====
    December 31, 1999                                       6        46        45 (b)   133 (b)    36        --        87       179
===================================================     =====     =====     =====     =====     =====     =====     =====     =====

PROVED DEVELOPED RESERVES

    December 31, 1997                                     151     1,571       235        --       251       207       637     1,778
                                                        =====     =====     =====     =====     =====     =====     =====     =====
    December 31, 1998                                     367     1,836       171        --       306       190       844     2,026
                                                        =====     =====     =====     =====     =====     =====     =====     =====
    December 31, 1999                                     339     1,670       153        --       245        61       737     1,731
                                                        =====     =====     =====     =====     =====     =====     =====     =====
    DECEMBER 31, 2000                                   1,079     1,814        82        --       249        84     1,410     1,898
===================================================     =====     =====     =====     =====     =====     =====     =====     =====

PROPORTIONAL INTEREST IN EQUITY INVESTEES' RESERVES

    December 31, 1997                                       4        31        38 (b)   140 (b)    21        20        63       191
                                                        =====     =====     =====     =====     =====     =====     =====     =====

    December 31, 1998                                       5        48        35 (b)   127 (b)    24        --        64       175
                                                        =====     =====     =====     =====     =====     =====     =====     =====

    December 31, 1999                                       5        41        36 (b)   115 (b)    21        --        62       156
===================================================     =====     =====     =====     =====     =====     =====     =====     =====

(a)  Portions of these reserves are being produced pursuant to exclusive service
     contracts.
(b)  Includes amounts in Latin America and Canada.

                                       64


STANDARDIZED MEASURE, INCLUDING YEAR-TO-YEAR CHANGES THEREIN, OF DISCOUNTED
FUTURE NET CASH FLOWS

     For purposes of the following disclosures, estimates were made of
quantities of proved reserves and the periods during which they are expected to
be produced. Future cash flows were computed by applying year-end prices to
Occidental's share of estimated annual future production from proved oil and gas
reserves, net of royalties. Future development and production costs were
computed by applying year-end costs to be incurred in producing and further
developing the proved reserves. Future income tax expenses were computed by
applying, generally, year-end statutory tax rates (adjusted for permanent
differences, tax credits, allowances and foreign income repatriation
considerations) to the estimated net future pre-tax cash flows. The discount was
computed by application of a 10 percent discount factor. The calculations
assumed the continuation of existing economic, operating and contractual
conditions at each of December 31, 2000, 1999 and 1998. However, such arbitrary
assumptions have not necessarily proven to be the case in the past. Other
assumptions of equal validity would give rise to substantially different
results.

STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
In millions



                                                                 United          Latin        Eastern          Total
                                                                 States        America (a) Hemisphere      Worldwide
========================================================     ==========     ==========     ==========     ==========
                                                                                              
AT DECEMBER 31, 2000
    Future cash flows                                        $   53,195     $    2,744     $    6,868     $   62,807
    Future costs
        Production costs and other operating expenses           (13,236)          (785)        (1,767)       (15,788)
        Development costs(b)                                     (1,962)           (47)          (539)        (2,548)
                                                             ----------     ----------     ----------     ----------

    FUTURE NET CASH FLOWS BEFORE INCOME TAXES                    37,997          1,912          4,562         44,471
    Future income tax expense                                   (11,023)          (896)          (623)       (12,542)
                                                             ----------     ----------     ----------     ----------

    FUTURE NET CASH FLOWS                                        26,974          1,016          3,939         31,929
    Ten percent discount factor                                 (14,608)          (392)        (1,585)       (16,585)
                                                             ----------     ----------     ----------     ----------
    STANDARDIZED MEASURE                                     $   12,366     $      624     $    2,354     $   15,344
========================================================     ==========     ==========     ==========     ==========

AT DECEMBER 31, 1999
    Future cash flows                                        $   14,604     $    3,619     $    7,329     $   25,552
    Future costs
        Production costs and other operating expenses            (3,162)          (754)        (1,879)        (5,795)
        Development costs(b)                                     (1,166)          (185)          (716)        (2,067)
                                                             ----------     ----------     ----------     ----------

    FUTURE NET CASH FLOWS BEFORE INCOME TAXES                    10,276          2,680          4,734         17,690
    Future income tax expense                                    (2,306)        (1,076)          (345)        (3,727)
                                                             ----------     ----------     ----------     ----------

    FUTURE NET CASH FLOWS                                         7,970          1,604          4,389         13,963
    Ten percent discount factor                                  (4,177)          (624)        (1,754)        (6,555)
                                                             ----------     ----------     ----------     ----------

    STANDARDIZED MEASURE                                          3,793            980          2,635          7,408
    Share of equity investees' standardized measure                 104            312            344            760
                                                             ----------     ----------     ----------     ----------
                                                             $    3,897     $    1,292     $    2,979     $    8,168
========================================================     ==========     ==========     ==========     ==========

AT DECEMBER 31, 1998
    Future cash flows                                        $    7,898     $    1,437     $    4,346     $   13,681
    Future costs
        Production costs and other operating expenses            (3,199)          (908)        (1,788)        (5,895)
        Development costs(b)                                       (652)           (75)          (718)        (1,445)
                                                             ----------     ----------     ----------     ----------

    FUTURE NET CASH FLOWS BEFORE INCOME TAXES                     4,047            454          1,840          6,341
    Future income tax expense                                       (24)          (159)           (54)          (237)
                                                             ----------     ----------     ----------     ----------

    FUTURE NET CASH FLOWS                                         4,023            295          1,786          6,104
    Ten percent discount factor                                  (1,900)           (75)          (760)        (2,735)
                                                             ----------     ----------     ----------     ----------

    STANDARDIZED MEASURE                                          2,123            220          1,026          3,369
    Share of equity investees' standardized measure                  50            150            112            312
                                                             ----------     ----------     ----------     ----------
                                                             $    2,173     $      370     $    1,138     $    3,681
========================================================     ==========     ==========     ==========     ==========

(a)  Includes amounts applicable to operating interests in which Occidental
     receives an agreed-upon fee per barrel of crude oil produced in 1999 and
     1998.
(b)  Includes dismantlement and abandonment costs.

                                       65


CHANGES IN THE STANDARDIZED MEASURE OF DISCOUNTED FUTURE
NET CASH FLOWS FROM PROVED RESERVE QUANTITIES
In millions



For the years ended December 31,                                                       2000        1999        1998
===============================================================================   =========   =========   =========
                                                                                                 
BEGINNING OF YEAR                                                                 $   7,408   $   3,369   $   3,690
                                                                                  ---------   ---------   ---------

    Sales and transfers of oil and gas produced, net of production costs and
       other operating expenses                                                      (3,546)     (1,838)       (925)
    Net change in prices received per barrel, net of production costs and other
       operating expenses                                                             6,219       7,712      (2,661)
    Extensions, discoveries and improved recovery, net of future production and
       development costs                                                              1,222         660         236
    Change in estimated future development costs                                        (95)       (299)        330
    Revisions of quantity estimates                                                   1,315        (808)        390
    Development costs incurred during the period                                        576         298         535
    Accretion of discount                                                               783         308         307
    Net change in income taxes                                                       (3,954)     (1,694)        881
    Purchases and sales of reserves in place, net                                     5,927        (150)        625
    Changes in production rates and other                                              (511)       (150)        (39)
                                                                                  ---------   ---------   ---------
NET CHANGE                                                                            7,936       4,039        (321)
                                                                                  ---------   ---------   ---------
END OF YEAR                                                                       $  15,344   $   7,408   $   3,369
===============================================================================   =========   =========   =========


     The information set forth below does not include information with respect
to operations of equity investees.
     The following table sets forth, for each of the three years in the period
ended December 31, 2000, Occidental's approximate average sales prices and
average production costs of oil and gas. Production costs are the costs incurred
in lifting the oil and gas to the surface and include gathering, treating,
primary processing, field storage, property taxes and insurance on proved
properties, but do not include depreciation, depletion and amortization,
royalties, income taxes, interest, general and administrative and other
expenses.

AVERAGE SALES PRICES AND AVERAGE PRODUCTION COSTS OF OIL AND GAS



                                                              United            Latin          Eastern
For the years ended December 31,                              States          America(a,b)  Hemisphere(a)
===================================================       ==========       ==========       ==========
                                                                                   
2000
    Oil -- Average sales price ($/bbl.)                   $    26.66       $    26.01       $    25.14
    Gas -- Average sales price ($/Mcf)                    $     3.66       $       --       $     1.99

    Average oil and gas production cost ($/bbl.)(c)       $     5.00       $     3.67       $     3.73
- ---------------------------------------------------       ----------       ----------       ----------

1999
    Oil -- Average sales price ($/bbl.)                   $    15.81       $    13.20       $    15.86
    Gas -- Average sales price ($/Mcf)                    $     2.09       $       --       $     1.17

    Average oil and gas production cost ($/bbl.)(c)       $     3.07       $     2.63       $     2.68
- ---------------------------------------------------       ----------       ----------       ----------

1998
    Oil -- Average sales price ($/bbl.)                   $    12.06       $     8.78       $    11.12
    Gas -- Average sales price ($/Mcf)                    $     2.05       $       --       $     2.03

    Average oil and gas production cost ($/bbl.)(c)       $     3.41       $     3.21       $     2.75
- ---------------------------------------------------       ----------       ----------       ----------

(a)  Sales prices include royalties with respect to certain of Occidental's
     interests.
(b)  Sales prices include fees received under service contracts.
(c)  Natural gas volumes have been converted to equivalent barrels based on
     energy content of six Mcf of gas to one barrel of oil.

                                       66


     The following table sets forth, for each of the three years in the period
ended December 31, 2000, Occidental's net productive and dry-exploratory and
development wells drilled.

NET PRODUCTIVE AND DRY -- EXPLORATORY AND DEVELOPMENT WELLS DRILLED



                                          United        Latin      Eastern        Total
For the years ended December 31,          States      America   Hemisphere    Worldwide
===================================   ==========   ==========   ==========   ==========
                                                                 
2000
    Oil -- Exploratory                       1.6          1.3           --          2.9
           Development                     273.9          8.1        119.0        401.0
    Gas -- Exploratory                       3.4           --          0.6          4.0
           Development                      32.9           --          4.3         37.2
    Dry -- Exploratory                       1.2          2.7          1.0          4.9
           Development                      25.3           --          1.2         26.5
- -----------------------------------   ----------   ----------   ----------   ----------

1999
    Oil -- Exploratory                       1.0           --           --          1.0
           Development                      76.8          5.4        105.1        187.3
    Gas -- Exploratory                        --           --           .5           .5
           Development                      13.4           --          4.5         17.9
    Dry -- Exploratory                       1.9           --           --          1.9
           Development                      13.3           --          1.1         14.4
- -----------------------------------   ----------   ----------   ----------   ----------

1998
    Oil -- Exploratory                        --          0.2          1.1          1.3
           Development                     109.7          9.8        114.3        233.8
    Gas -- Exploratory                        --           --          1.8          1.8
           Development                      32.4           --          2.3         34.7
    Dry -- Exploratory                        .5          1.8          5.9          8.2
           Development                      14.5           --          1.8         16.3
- -----------------------------------   ----------   ----------   ----------   ----------


     The following table sets forth, as of December 31, 2000, Occidental's
productive oil and gas wells (both producing wells and wells capable of
production). The numbers in parentheses indicate the number of wells with
multiple completions.

PRODUCTIVE OIL AND GAS WELLS



                                   United          Latin        Eastern          Total
Wells at December 31,              States        America     Hemisphere      Worldwide
==========================   ============   ============   ============   ============
                                                              
Oil -- Gross(a)              13,943  (244)     215   (--)     872   (81)  15,030  (325)
       Net(b)                8,754   (168)     100   (--)     478   (51)   9,332  (219)
Gas -- Gross(a)              2,222    (20)      --   (--)      32    (1)   2,254   (21)
       Net(b)                1,890    (11)      --   (--)      13    (1)   1,903   (12)
- --------------------------   ------------   ------------   ------------   ------------

(a)  The total number of wells in which interests are owned or which are
     operated under service contracts.
(b)  The sum of fractional interests.

     The following table sets forth, as of December 31, 2000, Occidental's
participation in exploratory and development wells being drilled.

PARTICIPATION IN EXPLORATORY AND DEVELOPMENT WELLS BEING DRILLED



                                                      United        Latin      Eastern        Total
Wells at December 31,                                 States      America   Hemisphere    Worldwide
===============================================   ==========   ==========   ==========   ==========
                                                                             
Exploratory and development wells -- Gross                25            3           17           45
                                     Net                  16            3            9           28
- -----------------------------------------------   ----------   ----------   ----------   ----------


     At December 31, 2000, Occidental was participating in 112 pressure
maintenance and waterflood projects in the United States, 4 in Latin America, 17
in the Middle East and 2 in Russia.

                                       67


     The following table sets forth, as of December 31, 2000, Occidental's
holdings of developed and undeveloped oil and gas acreage.

OIL AND GAS ACREAGE



                                              United        Latin      Eastern        Total
Thousands of acres at December 31,            States      America   Hemisphere    Worldwide
=======================================   ==========   ==========   ==========   ==========
                                                                     
Developed(a)   --  Gross(b)                    3,625           19       15,329       18,973
                   Net(c)                      1,870           10        7,553        9,433
- ---------------------------------------   ----------   ----------   ----------   ----------

Undeveloped(d) --  Gross(b)                    2,649        2,236       14,803       19,688
                   Net(c)                      1,267        1,793        7,084       10,144
- ---------------------------------------   ----------   ----------   ----------   ----------

(a)  Acres spaced or assigned to productive wells.
(b)  Total acres in which interests are held.
(c)  Sum of the fractional interests owned based on working interests, or shares
     of production if under production-sharing agreements.
(d)  Acres on which wells have not been drilled or completed to a point that
     would permit the production of commercial quantities of oil and gas,
     regardless of whether the acreage contains proved reserves.

     The following table sets forth, for each of the three years in the period
ended December 31, 2000, Occidental's U.S. oil, NGL and natural gas production.

OIL AND NATURAL GAS PRODUCTION -- U.S.



                                  Liquids Production              Natural Gas Production
                        Thousands of barrels per day      Millions of cubic feet per day
                   ---------------------------------   ---------------------------------
                        2000        1999        1998        2000        1999        1998
================   =========   =========   =========   =========   =========   =========
                                                             
California                70          52          41         306         287         149
Permian                  101          13          14         119          55          70
Hugoton                   --          --          --         168         172         248
Others                     1           8          26          66         148         147
                   ---------   ---------   ---------   ---------   ---------   ---------
TOTAL                    172          73          81         659         662         614
================   =========   =========   =========   =========   =========   =========


     The following table sets forth, for each of the three years in the period
ended December 31, 2000, Occidental's international oil and natural gas
production.

OIL AND NATURAL GAS PRODUCTION -- INTERNATIONAL



                                      Oil Production              Natural Gas Production
                        Thousands of barrels per day      Millions of cubic feet per day
                   ---------------------------------   ---------------------------------
                        2000        1999        1998        2000        1999        1998
================   =========   =========   =========   =========   =========   =========
                                                             
Bangladesh                --          --          --          --           8          --
Colombia                  32          43          27          --          --          --
Ecuador                   17          15          12          --          --          --
Netherlands               --          --          --          --          --          50
Oman                       9          15          17          --          --          --
Pakistan                   6           5           5          49          44          39
Peru                      --          38          48          --          --          --
Qatar                     49          58          75          --          --          --
Russia                    26          27          29          --          --          --
Venezuela                 --          --           2          --          --          --
Yemen                     32          32          25          --          --          --
                   ---------   ---------   ---------   ---------   ---------   ---------

TOTAL                    171         233         240          49          52          89
================   =========   =========   =========   =========   =========   =========


                                       68




SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS                                       Occidental Petroleum Corporation
In millions                                                                                           and Subsidiaries

                                                                             Additions
                                                                     -------------------------
                                                      Balance at     Charged to     Charged to                    Balance at
                                                       Beginning      Costs and        Other                        End of
                                                       of Period      Expenses       Accounts      Deductions       Period
=================================================     ==========     ==========     ==========     ==========     ==========
                                                                                                   
2000
    Allowance for doubtful accounts                   $       24              2     $       --     $       (1)    $       25
                                                      ==========     ==========     ==========     ==========     ==========

    Environmental                                     $      454             --     $       23     $      (75)(a) $      402
    Foreign and other taxes, litigation and other
       reserves                                              857             42            231           (129)         1,001
                                                      ----------     ----------     ----------     ----------     ----------

                                                      $    1,311             42     $      254     $     (204)    $    1,403 (b)
=================================================     ==========     ==========     ==========     ==========     ==========

1999
    Allowance for doubtful accounts                   $       23              2     $       --     $       (1)    $       24
                                                      ==========     ==========     ==========     ==========     ==========

    Environmental                                     $      578             --     $       11     $     (135)(a) $      454
    Foreign and other taxes, litigation and other
       reserves                                              801            164              1           (109)           857
                                                      ----------     ----------     ----------     ----------     ----------

                                                      $    1,379            164     $       12     $     (244)    $    1,311 (b)
=================================================     ==========     ==========     ==========     ==========     ==========

1998
    Allowance for doubtful accounts                   $       24              4     $       --     $       (5)    $       23
                                                      ==========     ==========     ==========     ==========     ==========

    Environmental                                     $      646             --     $        9     $      (77)(a) $      578
    Foreign and other taxes, litigation and other
       reserves                                              846            187              7           (239)           801
                                                      ----------     ----------     ----------     ----------     ----------

                                                      $    1,492            187     $       16     $     (316)    $    1,379 (b)
=================================================     ==========     ==========     ==========     ==========     ==========


(a)  Primarily represents payments.
(b)  Of these amounts, $143 million, $155 million and $172 million in 2000, 1999
     and 1998, respectively, is classified as current.

                                       69


ITEM 9  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
     Not applicable.

PART III

ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
     There is hereby incorporated by reference the information regarding
Occidental's directors appearing under the caption "Election of Directors" in
Occidental's definitive proxy statement filed in connection with its April 20,
2001, Annual Meeting of Stockholders (the "2001 Proxy Statement"). See also the
list of Occidental's executive officers and related information under "Executive
Officers of the Registrant" in Part I hereof.

ITEM 11  EXECUTIVE COMPENSATION
     There is hereby incorporated by reference the information appearing under
the captions "Executive Compensation" (excluding, however, the information
appearing under the subcaptions "Report of the Compensation Committee" and
"Performance Graphs") and "Election of Directors -- Information Regarding the
Board of Directors and Its Committees" in the 2001 Proxy Statement.

ITEM 12  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
     There is hereby incorporated by reference the information with respect to
security ownership appearing under the caption "Security Ownership of Certain
Beneficial Owners and Management" in the 2001 Proxy Statement.

ITEM 13  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
     There is hereby incorporated by reference the information appearing under
the caption "Election of Directors --Certain Relations and Related Transactions"
in the 2001 Proxy Statement.

PART IV

ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) (1) AND (2). FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Reference is made to the Index to Financial Statements and Related Information
under Item 8 in Part II hereof, where these documents are listed.

(a) (3). EXHIBITS

     3.(i)*    Restated Certificate of Incorporation of Occidental, dated
               November 12, 1999 (filed as Exhibit 3.(i) to the Annual Report on
               Form 10-K of Occidental for the fiscal year ended December 31,
               1999, File No. 1-9210).
     3.(ii)*   Bylaws of Occidental, as amended through April 30, 1999 (filed as
               Exhibit 3.(ii) to the Registration Statement on Form S-8 of
               Occidental, File No. 333-78031).
     4.1       Occidental Petroleum Corporation Five-Year Credit Agreement,
               dated as of January 4, 2001 among Occidental, Chase Securities
               Inc. and Bank of America Securities, LLC, as Co-Lead Arrangers,
               The Chase Manhattan Bank, as Syndication Agent, Bank of America,
               N.A. and ABN Amro Bank N.V., as Co-Documentation Agents, and The
               Bank of Nova Scotia, as Administrative Agent.
     4.2*      Credit Agreement, dated as of April 19, 2000, among Occidental
               Permian Ltd., Chase Securities Inc., as Arranger, Bank of
               America, N.A., as Syndication Agent, Morgan Guaranty Trust
               Company of New York and UBS AG, as Documentation Agents, and The
               Chase Manhattan Bank, as Administrative Agent (filed as Exhibit
               4.1 of the Quarterly Report on Form 10-Q of Occidental for the
               quarterly period ended March 31, 2000, File No. 1-9210).
     4.3       Instruments defining the rights of holders of other long-term
               debt of Occidental and its subsidiaries are not being filed since
               the total amount of securities authorized under each of such
               instruments does not exceed 10 percent of the total assets of
               Occidental and its subsidiaries on a consolidated basis.
               Occidental agrees to furnish a copy of any such instrument to the
               Commission upon request. All of the Exhibits numbered 10.1 to
               10.36 are management contracts and compensatory plans required to
               be identified specifically as responsive to Item
               601(b)(10)(iii)(A) of Regulation S-K pursuant to Item 14(c) of
               Form 10-K.

- ---------------------------------
*Incorporated herein by reference

                                       70


     10.1*     Employment Agreement, dated May 14, 1997, between Occidental and
               J. Roger Hirl (filed as Exhibit 10.1 to the Quarterly Report on
               Form 10-Q of Occidental for the quarterly period ended June 30,
               1997, File No. 1-9210).
     10.2      Employment Agreement, dated as of November 17, 2000, between
               Occidental and Dr. Ray R. Irani.
     10.3      Employment Agreement, dated as of November 17, 2000, between
               Occidental and Dr. Dale R. Laurance.
     10.4      Employment Agreement, dated as of November 17, 2000, between
               Occidental and Stephen I. Chazen.
     10.5*     Employment  Agreement, dated April 3, 1998, between Occidental
               and Donald P. de Brier (filed as Exhibit 10.7 to the Annual
               Report on Form 10-K of Occidental for the fiscal year ended
               December 31, 1999, File No. 1-9210).
    10.6       Amendment, dated November 17, 2000, to Employment Agreement,
               dated April 3, 1998, between Occidental and Donald P. de Brier.
    10.7*      Form of Indemnification Agreement between Occidental and each of
               its directors and certain executive officers (filed as Exhibit B
               to the Proxy Statement of Occidental for its May 21, 1987, Annual
               Meeting of Stockholders, File No. 1-9210).
    10.8*      Occidental Petroleum Corporation Split Dollar Life Insurance
               Program and Related Documents (filed as Exhibit 10.2 to the
               Quarterly Report on Form 10-Q of Occidental for the quarterly
               period ended September 30, 1994, File No. 1-9210).
    10.9*      Occidental Petroleum Insured Medical Plan, as amended and
               restated effective April 29, 1994, amending and restating the
               Occidental Petroleum Corporation Executive Medical Plan (as
               amended and restated effective April 1, 1993) (filed as Exhibit
               10 to the Quarterly Report on Form 10-Q of Occidental for the
               quarterly period ending March 31, 1994, File No. 1-9210).
    10.10*     Occidental Petroleum Corporation 1987 Stock Option Plan, as
               amended through April 29, 1992 (filed as Exhibit 10.1 to the
               Quarterly Report on Form 10-Q of Occidental for the quarterly
               period ended March 31, 1992, File No. 1-9210).
    10.11*     Form of Nonqualified Stock Option Agreement under Occidental
               Petroleum Corporation 1987 Stock Option Plan (filed as Exhibit
               10.2 to the Quarterly Report on Form 10-Q of Occidental for the
               quarterly period ended March 31, 1992, File No. 1-9210).
    10.12*     Form of Nonqualified Stock Option Agreement, with Stock
               Appreciation Right, under Occidental Petroleum Corporation 1987
               Stock Option Plan (filed as Exhibit 10.3 to the Quarterly Report
               on Form 10-Q of Occidental for the quarterly period ended March
               31, 1992, File No. 1-9210).
    10.13*     Form of Incentive Stock Option Agreement under Occidental
               Petroleum Corporation 1987 Stock Option Plan (filed as Exhibit
               10.4 to the Quarterly Report on Form 10-Q of Occidental for the
               quarterly period ended March 31, 1992, File No. 1-9210).
    10.14*     Form of Incentive Stock Option Agreement, with Stock Appreciation
               Right, under Occidental Petroleum Corporation 1987 Stock Option
               Plan (filed as Exhibit 10.5 to the Quarterly Report on Form 10-Q
               of Occidental for the quarterly period ended March 31, 1992, File
               No. 1-9210).
    10.15*     Occidental Petroleum Corporation Deferred Compensation Plan (as
               amended and restated effective as of January 1, 1999) (filed as
               Exhibit 10.23 to the Quarterly Report on Form 10-Q of Occidental
               for the quarterly period ended September 30, 1999, File No.
               1-9210).
    10.16*     Occidental Petroleum Corporation Senior Executive Deferred
               Compensation Plan (effective as of January 1, 1986, as amended
               and restated effective as of January 1, 1996) (filed as Exhibit
               10.24 to the Annual Report on Form 10-K of Occidental for the
               fiscal year ended December 31, 1995, File No. 1-9210).
    10.17*     Occidental Petroleum Corporation Senior Executive Supplemental
               Life Insurance Plan (effective as of January 1, 1986, as amended
               and restated effective as of January 1, 1996) (filed as Exhibit
               10.25 to the Annual Report on Form 10-K of Occidental for the
               fiscal year ended December 31, 1995, File No. 1-9210).
    10.18*     Occidental Petroleum Corporation Senior Executive Supplemental
               Retirement Plan (effective as of January 1, 1986, as amended and
               restated effective as of January 1, 1996) (filed as Exhibit 10.26
               to the Annual Report on Form 10-K of Occidental for the fiscal
               year ended December 31, 1995, File No. 1-9210).
    10.19*     Amendment to Occidental Petroleum Corporation Senior Executive
               Supplemental Retirement Plan (filed as Exhibit 10.1 to the
               Quarterly Report on Form 10-Q of Occidental for the quarterly
               period ended June 30, 1998, File No. 1-9210).

- ---------------------------------
*Incorporated herein by reference

                                       71


    10.20*     Occidental Petroleum Corporation Senior Executive Survivor
               Benefit Plan (effective as of January 1, 1986, as amended and
               restated effective as of January 1, 1996) (filed as Exhibit 10.27
               to the Annual Report on Form 10-K of Occidental for the fiscal
               year ended December 31, 1995, File No. 1-9210).
    10.21*     Occidental Petroleum Corporation 1995 Incentive Stock Plan, as
               amended (filed as Exhibit 10.28 to the Annual Report on Form 10-K
               of Occidental for the fiscal year ended December 31, 1999, File
               No. 1-9210).
    10.22*     Form of Incentive Stock Option Agreement under Occidental
               Petroleum Corporation 1995 Incentive Stock Plan (filed as Exhibit
               99.2 to the Registration Statement on Form S-8 of Occidental,
               File No. 33-64719).
    10.23*     Form of Nonqualified Stock Option Agreement under Occidental
               Petroleum Corporation 1995 Incentive Stock Plan (filed as Exhibit
               99.3 to the Registration Statement on Form S-8 of Occidental,
               File No. 33-64719).
    10.24*     Form of Stock Appreciation Rights Agreement under Occidental
               Petroleum Corporation 1995 Incentive Stock Plan (filed as Exhibit
               99.4 to the Registration Statement on Form S-8 of Occidental,
               File No. 33-64719).
    10.25*     Form of Restricted  Stock Agreement under Occidental Petroleum
               Corporation 1995 Incentive Stock Plan (filed as Exhibit 99.5 to
               the Registration Statement on Form S-8 of Occidental, File No.
               33-64719).
    10.26*     Form of Performance Stock Agreement under Occidental Petroleum
               Corporation 1995 Incentive Stock Plan (filed as Exhibit 99.6 to
               the Registration Statement on Form S-8 of Occidental, File No.
               33-64719).
    10.27*     Occidental Petroleum Corporation 1996 Restricted Stock Plan for
               Non-Employee Directors (as amended April 28, 2000) (filed as
               Exhibit 10.1 to the Quarterly Report on Form 10-Q of Occidental
               for the quarterly period ended March 31, 2000, File No. 1-9210).
    10.28*     Form of Restricted Stock Option Assignment under Occidental
               Petroleum Corporation 1996 Restricted Stock Plan for Non-Employee
               Directors (filed as Exhibit 99.2 to the Registration Statement on
               Form S-8 of Occidental, File No. 333-02901).
    10.29*     Form of Incentive Stock Option Agreement under Occidental
               Petroleum Corporation 1995 Incentive Stock Plan (filed as Exhibit
               10.2 to the Current Report on Form 8-K of Occidental, dated
               January 6, 1999 (date of earliest event reported), filed January
               6, 1999, File No. 1-9210, amends Form previously filed as Exhibit
               10.1 to the Registration Statement on Form S-8 of Occidental,
               File No. 33-64719 and incorporated by reference as Exhibit 10.39
               to the Annual Report on Form 10-K of Occidental for the fiscal
               year ended December 31, 1997, File No. 1-9210).
    10.30*     Form of Nonqualified Stock Option Agreement under Occidental
               Petroleum Corporation 1995 Incentive Stock Plan (filed as Exhibit
               10.3 to the Current Report on Form 8-K of Occidental, dated
               January 6, 1999 (date of earliest event reported), filed January
               6, 1999, File No. 1-9210, amends Form previously filed as Exhibit
               10.2 to the Registration Statement on Form S-8 of Occidental,
               File No. 33-64719 and incorporated by reference as Exhibit 10.40
               to the Annual Report on Form 10-K of Occidental for the fiscal
               year ended December 31, 1997, File No. 1-9210).
    10.31*     Form of Incentive Stock Option Agreement (With Accelerated
               Performance Vesting) under Occidental Petroleum Corporation 1995
               Incentive Stock Plan (filed as Exhibit 10.2 to the Quarterly
               Report on Form 10-Q of Occidental for the quarterly period ended
               June 30, 1999, File No. 1-9210).
    10.32*     Form of Nonqualified Stock Option Agreement (With Accelerated
               Performance Vesting) under Occidental Petroleum Corporation 1995
               Incentive Stock Plan (filed as Exhibit 10.3 to the Quarterly
               Report on Form 10-Q of Occidental for the quarterly period ended
               June 30, 1999, File No. 1-9210).
    10.33*     Occidental Petroleum Corporation 1988 Deferred Compensation Plan
               (as amended and restated effective as of January 1, 1996) (filed
               as Exhibit 10.2 to the Quarterly Report on Form 10-Q of
               Occidental for the fiscal quarter ended September 30, 1996, File
               No. 1-9210).
    10.34*     Occidental Petroleum Corporation Supplemental Retirement Plan,
               Amended and Restated Effective as of January 1, 1999 (filed as
               Exhibit 10.1 to the Current Report on Form 8-K of Occidental,
               dated January 6, 1999 (date of earliest event reported), filed
               January 6, 1999, File No. 1-9210).
    10.35*     Form of 1997 Performance Stock Option Agreement under the 1995
               Incentive Stock Plan of Occidental Petroleum Corporation (filed
               as Exhibit 10.2 to the Quarterly Report on Form 10-Q of
               Occidental for the quarterly period ended June 30, 1997, File No.
               1-9210).
    10.36*     Form of Amendment to 1997 Performance Stock Option Agreement
               under the 1995 Incentive Stock Plan of Occidental Petroleum
               Corporation (filed as Exhibit 10.43 to the Annual Report on Form
               10-K of Occidental for the fiscal year ended December 31, 1999,
               File No. 1-9210).

- ---------------------------------
*Incorporated herein by reference

                                       72


    10.37*     Master Transaction Agreement, dated May 15, 1998, by and among
               Equistar Chemicals, LP, Occidental, Lyondell Petrochemical
               Company and Millennium Chemicals Inc. (filed as Exhibit 10.1 to
               the Current Report on Form 8-K of Occidental dated May 15, 1998
               (date of earliest event reported), filed May 29, 1998, File No.
               1-9210).
    10.38*     Amended and Restated Limited Partnership Agreement of Equistar
               Chemicals, LP, dated May 15, 1998, by and among the partners
               named therein (filed as Exhibit 10.2 to the Current Report on
               Form 8-K of Occidental dated May 15, 1998 (date of earliest event
               reported), filed May 29, 1998, File No. 1-9210).
    10.39*     Agreement and Plan of Merger and Asset Contribution, dated as of
               May 15, 1998, by and among Equistar Chemicals, LP, Occidental
               Petrochem Partner 1, Inc., Occidental Petrochem Partner 2, Inc.,
               Oxy Petrochemicals Inc. and PDG Chemical Inc. (filed as Exhibit
               10.3 to the Current Report on Form 8-K of Occidental dated May
               15, 1998 (date of earliest event reported), filed May 29, 1998,
               File No. 1-9210).
    10.40*     Amended and Restated Parent Agreement, dated as of May 15, 1998,
               among Occidental Chemical Corporation, Oxy CH Corporation,
               Occidental, Lyondell Petrochemical Company, Millennium Chemicals
               Inc. and Equistar Chemicals, LP (filed as Exhibit 10.4 to the
               Current Report on Form 8-K of Occidental dated May 15, 1998 (date
               of earliest event reported), filed May 29, 1998, File No.
               1-9210).
    10.41*     Purchase and Sale Agreement dated March 7, 2000, by and among
               Amoco D. T. Company, Amoco X. T. Company, Amoco Y. T. Company,
               SWEPI LP, Shell Land & Energy Company, Shell Onshore Ventures
               Inc., Shell K2 Inc., and Shell Everest, Inc., as Sellers, and
               Occidental Petroleum Corporation, as Buyer (filed as Exhibit 10.1
               to the Current Report on Form 8-K of Occidental dated March 7,
               2000 (date of earliest event reported), filed March 15, 2000,
               File No. 1-9210).
    12         Statement regarding computation of total enterprise ratios of
               earnings to fixed charges for the five years ended December 31,
               2000.
    21         List of subsidiaries of Occidental at December 31, 2000.
    23         Consent of Independent Public Accountants.

- ---------------------------------
*Incorporated herein by reference

                                       73


(b) REPORTS ON FORM 8-K
During the fourth quarter of 2000, Occidental filed the following Current
Reports on Form 8-K:

     1. Current Report on Form 8-K dated October 18, 2000 (date of earliest
event reported), filed on October 18, 2000, for the purpose of reporting, under
Item 5, Occidental's results of operations for the third quarter ended September
30, 2000, and under Item 9, speeches and supplemental investor information
relating to Occidental's third quarter 2000 earnings announcement.

     2. Current Report on Form 8-K dated November 16, 2000 (date of earliest
event reported), filed on November 16, 2000, for the purpose of reporting, under
Item 9, a financial analyst presentation by Dr. Ray R. Irani, Chief Executive
Officer.

During the first quarter of 2001 to the date hereof, Occidental filed the
following Current Report on Form 8-K:

     1. Current Report on Form 8-K dated January 24, 2001 (date of earliest
event reported), filed on January 24, 2001, for the purpose of reporting, under
Item 5, Occidental's results of operations for the fourth quarter and fiscal
year ended December 31, 2000, and under Item 9, speeches and supplemental
investor information relating to Occidental's fourth quarter 2000 earnings
announcement.

                                       74


SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                    OCCIDENTAL PETROLEUM CORPORATION


March 8, 2001                       By:             /s/ RAY R. IRANI
                                       -----------------------------------------
                                                       Ray R. Irani
                                          Chairman of the Board of Directors and
                                                  Chief Executive Officer


    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

            SIGNATURE                         TITLE                    DATE
            ---------                         -----                    ----

        /s/ RAY R. IRANI             Chairman of the Board of     March 8, 2001
- -------------------------------        Directors and Chief
          Ray R. Irani                  Executive Officer

     /s/ STEPHEN I. CHAZEN          Executive Vice President -    March 8, 2001
- -------------------------------       Corporate Development
       Stephen I. Chazen           and Chief Financial Officer

  /s/ SAMUEL P. DOMINICK, JR.           Vice President and        March 8, 2001
- -------------------------------         Controller (Chief
    Samuel P. Dominick, Jr.            Accounting Officer)

      /s/ RONALD W. BURKLE                   Director             March 8, 2001
- -------------------------------
        Ronald W. Burkle

      /s/ JOHN S. CHALSTY                    Director             March 8, 2001
- -------------------------------
        John S. Chalsty

    /s/ EDWARD P. DJEREJIAN                  Director             March 8, 2001
- -------------------------------
      Edward P. Djerejian

       /s/ JOHN E. FEICK                     Director             March 8, 2001
- -------------------------------
         John E. Feick

       /s/ J. ROGER HIRL                     Director             March 8, 2001
- -------------------------------
         J. Roger Hirl

      /s/ DALE R. LAURANCE                   Director             March 8, 2001
- -------------------------------
        Dale R. Laurance

                                       75


      /s/ IRVIN W. MALONEY                   Director             March 8, 2001
- -------------------------------
        Irvin W. Maloney

      /s/ RODOLFO SEGOVIA                    Director             March 8, 2001
- -------------------------------
        Rodolfo Segovia

      /s/ AZIZ D. SYRIANI                    Director             March 8, 2001
- -------------------------------
        Aziz D. Syriani

      /s/ ROSEMARY TOMICH                    Director             March 8, 2001
- -------------------------------
        Rosemary Tomich

                                       76


                               INDEX TO EXHIBITS

Exhibit
 Number                                  Description
- -------                                  -----------

   4.1      Occidental Petroleum Corporation Five-Year Credit Agreement, dated
            as of January 4, 2001 among Occidental, Chase Securities Inc. and
            Bank of America Securities, LLC, as Co-Lead Arrangers, The Chase
            Manhattan Bank, as Syndication Agent, Bank of America, N.A. and ABN
            Amro Bank N.V., as Co-Documentation Agents, and The Bank of Nova
            Scotia, as Administrative Agent.

  10.2      Employment Agreement, dated as of November 17, 2000, between
            Occidental and Dr. Ray R. Irani.

  10.3      Employment Agreement, dated as of November 17, 2000, between
            Occidental and Dr. Dale R. Laurance.

  10.4      Employment Agreement, dated as of November 17, 2000, between
            Occidental and Stephen I. Chazen.

  10.6      Amendment, dated November 17, 2000, to Employment Agreement, dated
            April 3, 1998, between Occidental and Donald P. de Brier.

  12        Statement regarding computation of total enterprise ratios of
            earnings to fixed charges for the five years ended December 31,
            2000.

  21        List of subsidiaries of Occidental at December 31, 2000.

  23        Consent of Independent Public Accountants.

EX-4.1

                                                                     EXHIBIT 4.1


                                                                  CONFORMED COPY
================================================================================



                        OCCIDENTAL PETROLEUM CORPORATION


                        --------------------------------


                           FIVE-YEAR CREDIT AGREEMENT

                           Dated as of January 4, 2001

                                 $1,000,000,000


                        --------------------------------



                              CHASE SECURITIES INC.
                         BANC OF AMERICA SECURITIES, LLC
                              as Co-Lead Arrangers,

                            THE CHASE MANHATTAN BANK,
                              as Syndication Agent,

                              BANK OF AMERICA, N.A.
                               ABN AMRO BANK N.V.,
                           as Co-Documentation Agents,

                                       and

                            THE BANK OF NOVA SCOTIA,
                             as Administrative Agent



================================================================================
                                                          [CS&M Ref. # 6701-156]

[NYCorp;1203895.1]


                                TABLE OF CONTENTS

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01.     Definitions..............................................    2
                  Accumulated Funding Deficiency...........................    2
                  Addendum.................................................    2
                  Administrative Agent.....................................    2
                  Administrative Questionnaire.............................    2
                  Affected Bank............................................    2
                  Agents...................................................    2
                  Agreement................................................    2
                  Allocable Share..........................................    2
                  Alternate Base Rate......................................    3
                  Alternate Base Rate Loan.................................    4
                  Applicable Facility Fee Percentage.......................    4
                  Applicable Margin........................................    5
                  Assenting Bank...........................................    6
                  Assessment Rate..........................................    6
                  Assignment and Acceptance................................    6
                  Bank and Banks...........................................    6
                  Bank Funding Default.....................................    6
                  Base CD Rate.............................................    6
                  Board....................................................    6
                  Borrowing................................................    7
                  Borrowing Date...........................................    7
                  Business Day.............................................    7
                  Calendar Quarter.........................................    7
                  Capital Adequacy Change..................................    7
                  Capital Adequacy Rule....................................    7
                  Capital Securities.......................................    7
                  Certificate of Deposit Loan..............................    7
                  Certificate of Deposit Rate..............................    8
                  Code.....................................................    8
                  Co-Documentation Agents..................................    8
                  Company..................................................    8
                  Competitive Bid..........................................    8
                  Competitive Bid Banks....................................    8
                  Competitive Bid Rate.....................................    8
                  Competitive Bid Request..................................    9
                  Competitive Borrowing....................................    9
                  Competitive Loan.........................................    9
                  Competitive Notes and Competitive Note...................    9
                  Confidential Information.................................    9

[NYCorp;1203895.1]


                  Consolidated Adjusted Tangible Net Worth.................    9
                  Consolidated Debt........................................    9
                  Consolidated Funded Debt.................................    9
                  Consolidated Secured Debt................................    9
                  Consolidated Short-Term Borrowings.......................   10
                  Consolidated Subsidiary..................................   10
                  Dollars and "$"..........................................   10
                  Domestic Loans and Domestic Loan.........................   10
                  Effective Date...........................................   10
                  Eligible Assignee........................................   10
                  Employee Benefit Plan....................................   10
                  ERISA....................................................   10
                  Eurodollar Loan..........................................   10
                  Eurodollar Rate..........................................   10
                  Event of Default.........................................   11
                  Excepted Subsidiary......................................   11
                  Existing Credit Agreement................................   11
                  Facility Fee.............................................   11
                  Fixed Rate Loan..........................................   11
                  Funded Debt..............................................   11
                  Increased Cost Change....................................   12
                  Indebtedness.............................................   12
                  Indemnified Liabilities..................................   13
                  Indemnitees and Indemnitee...............................   13
                  Index Debt...............................................   13
                  Interest Payment Date....................................   13
                  Interest Period..........................................   13
                  Interest Rate............................................   14
                  Lien.....................................................   14
                  Loans and Loan...........................................   14
                  Managing Agents..........................................   14
                  Margin...................................................   14
                  Maturity Date............................................   14
                  Moody's..................................................   15
                  Multiemployer Plan.......................................   15
                  Note.....................................................   15
                  Officers' Certificate....................................   15
                  Participants and Participant.............................   15
                  PBGC.....................................................   15
                  Person...................................................   15
                  Plan.....................................................   15
                  Plan Administrator.......................................   15
                  Plan Sponsor.............................................   15
                  Principal Subsidiaries and Principal Subsidiary..........   15
                  Prohibited Transaction...................................   16

[NYCorp;1203895.1]

                                 Contents, p. 2


                  Proportional Share.......................................   16
                  Reference Banks and Reference Bank.......................   16
                  Refinancing Loan.........................................   16
                  Register.................................................   17
                  Regulation D.............................................   17
                  Regulation U.............................................   17
                  Regulation X.............................................   17
                  Related Person...........................................   17
                  Replacement Lender.......................................   17
                  Reportable Event.........................................   17
                  Required Banks...........................................   17
                  Revolving Credit Borrowing...............................   17
                  Revolving Credit Borrowing Request.......................   17
                  Revolving Credit Commitment..............................   18
                  Revolving Credit Commitments.............................   18
                  Revolving Credit Loan....................................   18
                  Revolving Credit Notes and Revolving Credit Note.........   18
                  Secured Debt.............................................   18
                  Short-Term Borrowing.....................................   18
                  Specified Subsidiary.....................................   19
                  S&P......................................................   19
                  Statutory Reserves.......................................   19
                  Subsidiary...............................................   19
                  Syndication Agent........................................   19
                  Tangible Net Worth.......................................   19
                  Taxes....................................................   20
                  Term Federal Funds Loan..................................   20
                  Term Federal Funds Rate..................................   20
                  Total Commitment.........................................   20
                  Transferee...............................................   20
                  Unmatured Event of Default...............................   20
                  Voting Securities........................................   20

SECTION 1.02.     Accounting Terms.........................................   20


                                   ARTICLE II

                                 LOAN PROVISIONS

SECTION 2.01.     Revolving Credit Commitments; Procedure for
                     Requests..............................................   21
SECTION 2.02.     Competitive Loans; Procedure for Requests................   22
SECTION 2.03.     [Intentionally deleted]
SECTION 2.04.     [Intentionally deleted]

[NYCorp;1203895.1]

                                 Contents, p. 3


SECTION 2.05.     General Terms Relating to the Loans......................   25
SECTION 2.06.     Notes....................................................   27
SECTION 2.07.     Refinancings.............................................   28
SECTION 2.08.     Facility Fee.............................................   28
SECTION 2.09.     Reserve Requirements; Change in Circumstances............   28
SECTION 2.10.     Pro Rata Treatment.......................................   35
SECTION 2.11.     Payments.................................................   35
SECTION 2.12.     Payments on Business Days................................   35
SECTION 2.13.     Net Payments.............................................   35
SECTION 2.14.     Failed and Credit-Impaired Banks.........................   39


                                   ARTICLE III

                               INTEREST PROVISIONS

SECTION 3.01.     Interest on Loans........................................   41
SECTION 3.02.     Interest on Overdue Amounts..............................   42
SECTION 3.03.     Inability to Determine Certificate of Deposit Rate,
                     Term Federal Funds Rate or Eurodollar Rate............   43
SECTION 3.04.     Indemnity................................................   45
SECTION 3.05.     Rate Determination Conclusive............................   45


                                   ARTICLE IV

                REDUCTION OR TERMINATION OF THE REVOLVING CREDIT
                           COMMITMENTS AND PREPAYMENTS

SECTION 4.01.     Reduction or Termination of the Total Commitment.........   46
SECTION 4.02.     Prepayments..............................................   46
SECTION 4.03.     Required Termination of the Revolving Credit
                     Commitments and Prepayment............................   47


                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

SECTION 5.01.     Representations and Warranties of the Company............   50
          (a)     Company's Organization; Corporate Power..................   50
          (b)     Domestic Specified Subsidiaries; Organization;
                     Corporate Power.......................................   50
          (c)     Company's Corporate Authority; No Conflict...............   50
          (d)     Valid and Binding Obligations of the Company.............   51

[NYCorp;1203895.1]

                                 Contents, p. 4


          (e)     Company's Financial Condition............................   51
          (f)     Litigation with Respect to the Company or Its
                     Subsidiaries..........................................   52
          (g)     Regulatory Approvals with Respect to This
                     Agreement.............................................   52
          (h)     ERISA....................................................   53
          (i)     Investment Company Act...................................   53
          (j)     Public Utility Holding Company Act.......................   53
          (k)     Regulation U; Regulation X...............................   53
          (l)     Company's Tax Returns and Tax Liability..................   53
          (m)     Environmental and Public and Employee Health and
                     Safety Matters........................................   54
          (n)     True and Complete Disclosure.............................   54


                                   ARTICLE VI

                                    COVENANTS

SECTION 6.01      Affirmative Covenants of the Company.....................   55
          (a)     Reports, Certificates and Other Information..............   55
                  (i)    Interim Reports...................................   55
                  (ii)   Annual Reports....................................   55
                  (iii)  Officers' Certificates............................   56
                  (iv)   Accountants' Certificates.........................   56
                  (v)    Reports to SEC and to Stockholders................   56
                  (vi)   Officers' Certificates as to Status of Excepted
                         Subsidiaries......................................   57
                  (vii)  Officers' Certificates as to Status of Principal
                         Subsidiaries......................................   57
                  (viii) Notice of Default.................................   57
                  (ix)   Other Information.................................   57
          (b)     Taxes....................................................   57
          (c)     Preservation of Corporate Existence, etc.................   57
          (d)     Inspections; Discussions.................................   58
          (e)     Books and Records........................................   58
          (f)     Maintenance of Properties................................   58
          (g)     Maintenance of Insurance.................................   58
          (h)     Consolidated Adjusted Tangible Net Worth.................   59
          (i)     Compliance with Laws, etc................................   59
          (j)     Delivery of Certain Documentation with Respect
                     to Plans..............................................   59
          (k)     Contributions to Plans...................................   60
          (l)     Use of Proceeds..........................................   60

[NYCorp;1203895.1]

                                 Contents, p. 5



SECTION 6.02.     Negative Covenants of the Company........................   60
          (a)     Mergers, Consolidations, Sales...........................   60
          (b)     Restriction on Secured Debt..............................   61
          (c)     Restriction on Consolidated Debt.........................   61
          (d)     Restriction on Dividends from Principal Subsidiaries.....   61
          (e)     Change in Control........................................   61


                                   ARTICLE VII

                              CONDITIONS OF CREDIT

SECTION 7.01.     Conditions to Effectiveness of Commitments...............   62
SECTION 7.02.     Conditions Precedent to All Loans........................   64


                                  ARTICLE VIII

                                EVENTS OF DEFAULT

SECTION 8.01.     Events of Default........................................   64


                                   ARTICLE IX

                  THE AGENTS, THE MANAGING AGENTS AND THE BANKS

SECTION 9.01.     Appointment and Powers of the Administrative
                     Agent and the Syndication Agent.......................   67
SECTION 9.02.     Exculpatory Provisions...................................   67
SECTION 9.03.     Reliance by Administrative Agent and the
                     Syndication Agent.....................................   68
SECTION 9.04.     Notice of Default........................................   68
SECTION 9.05.     Indemnification..........................................   69
SECTION 9.06.     Nonreliance on the Agents, the Managing Agents and
                     Other Banks...........................................   69
SECTION 9.07.     The Agents and the Managing Agents in Their
                     Individual Capacities.................................   70
SECTION 9.08.     Excess Payments..........................................   70
SECTION 9.09.     Obligations Several......................................   70
SECTION 9.10.     Resignation by any Agent or Managing Agent..............    71

[NYCorp;1203895.1]

                                 Contents, p. 6


                                    ARTICLE X

                                  MISCELLANEOUS

SECTION 10.01.    No Waiver; Modifications in Writing......................   71
SECTION 10.02.    Confidentiality..........................................   72
SECTION 10.03.    Notices, etc.............................................   73
SECTION 10.04.    Costs, Expenses and Taxes................................   73
SECTION 10.05.    Confirmations............................................   74
SECTION 10.06.    Successors and Assigns; Participations...................   75
SECTION 10.07.    Indemnification..........................................   79
SECTION 10.08.    Reference Banks..........................................   80
SECTION 10.09.    Headings.................................................   81
SECTION 10.10.    Circumstances Requiring Consultation.....................   81
SECTION 10.11.    Execution in Counterparts................................   82
SECTION 10.12.    Governing Law............................................   82
SECTION 10.13.    Consent to Jurisdiction and Service of Process;
                     Waiver of Jury Trial..................................   82
SECTION 10.14.    Severability of Provisions...............................   83
SECTION 10.15.    Waiver of Certain Provisions Under the Existing
                     Credit Agreement......................................   83
SECTION 10.16.    Procedures Relating to Addendum..........................   83
SECTION 10.17.    Maximum Interest.........................................   84
SECTION 10.18.    Special Termination Provision............................   84

SCHEDULES

I      Revolving Credit Commitments
II     Addresses, Telecopier and Telephone Numbers


EXHIBITS

A-1    Form of Competitive Note
A-2    Form of Revolving Credit Note
B      Form of Competitive Bid Request
C      Form of Notice of Competitive Bid Request
D      Form of Competitive Bid
E      Form of Revolving Credit Borrowing Request
F      Form of Section 7.01(c) Certificate
G      Form of Assignment and Acceptance
H      Form of Opinion of Robert E. Sawyer, Esq., Counsel to the Company
I      Form of Opinion of Cravath, Swaine & Moore, Special Counsel
          to the Agents

[NYCorp;1203895.1]

                                 Contents, p. 7


J      Form of Addendum
K      Form of Administrative Questionnaire

[NYCorp;1203895.1]

                                 Contents, p. 8


                           FIVE-YEAR CREDIT AGREEMENT

               THIS AGREEMENT, dated as of January 4, 2001, is among OCCIDENTAL
          PETROLEUM CORPORATION, a Delaware corporation (hereinafter called the
          "COMPANY"), the Banks (as defined below), THE CHASE MANHATTAN BANK, as
          syndication agent (hereinafter, in such capacity, together with any
          successor thereto in such capacity, the "SYNDICATION AGENT"), BANK OF
          AMERICA, N.A. and ABN AMRO BANK N.V., as co-documentation agents
          (hereinafter, in such capacity, together with any successor to either
          thereof in such capacity, the "CO-DOCUMENTATION AGENTS"), THE BANK OF
          NOVA SCOTIA, as administrative agent (hereinafter, in such capacity,
          together with any successor thereto in such capacity, the
          "ADMINISTRATIVE AGENT"), and BANK ONE, NA, THE BANK OF NEW YORK,
          BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH, BNP
          PARIBAS, CITICORP USA, INC., COMMERZBANK AG, NEW YORK BRANCH AND GRAND
          CAYMAN BRANCH, CREDIT LYONNAIS NEW YORK BRANCH, CREDIT SUISSE FIRST
          BOSTON, MIZUHO FINANCIAL GROUP, NATIONAL WESTMINSTER BANK PLC, NEW
          YORK BRANCH AND NASSAU BRANCH, AND SOCIETE GENERALE, as managing
          agents (hereinafter, in such capacity, the "MANAGING AGENTS").


                               W I T N E S S E T H

     WHEREAS the Company has requested the Banks to provide a $1,000,000,000
committed credit facility for general corporate purposes, pursuant to which the
Company may borrow from the Banks pro rata on a revolving credit basis from time
to time on and after the Effective Date and prior to the Maturity Date;

     WHEREAS the Company has also requested the Banks to provide an uncommitted
credit facility pursuant to which the Company may invite Banks from time to time
designated by it to bid on a competitive basis to make short-term loans to the
Company; and

     WHEREAS the Banks are willing to provide such credit facilities to the
Company on the terms and conditions herein set forth;


     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:

[NYCorp;1203895.1]


                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

     SECTION 1.01. DEFINITIONS. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated (the meanings given to terms defined herein being equally applicable
to both the singular and plural forms of such terms):

     "ACCUMULATED FUNDING DEFICIENCY" has the meaning assigned to that term in
Section 412 of the Code.

     "ADDENDUM" means an instrument, substantially in the form of Exhibit J
hereto.

     "ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement.

     "ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire
substantially in the form of Exhibit K hereto, which each Bank shall complete
and provide to the Administrative Agent.

     "AFFECTED BANK" means, respectively, (i) any Bank or Participant affected
by the events described in Section 2.09(a), Section 2.09(b), Section 2.09(f) or
Section 2.13 hereof, (ii) any Bank affected by the events described in Section
2.14 hereof, or (iii) any Bank affected by the events described in Section
4.03(a) hereof, as the case may be, but only for any period during which such
Bank or Participant shall be affected by such events.

     "AGENTS" means, collectively, the Syndication Agent, the Administrative
Agent and the Co-Documentation Agents.

     "AGREEMENT" means this Agreement, as the same may at any time be amended or
modified and in effect.

     "ALLOCABLE SHARE" means, when used with reference to any Assenting Bank at
the time any determination thereof is to be made, (a) in the case of the
Revolving Credit Commitment and Revolving Credit Loans of an Affected Bank, a
fraction, the numerator of which shall be the Revolving Credit Commitment of
such Assenting Bank at such time and the denominator of which shall be the
aggregate of the Revolving Credit Commitments of all Assenting Banks at such
time, and (b) in the case of the Competitive Loans, if any, of an Affected Bank,
the outstanding principal amount thereof, divided among the Assenting Banks in
such proportion as the Company and such Assenting Banks shall agree.

[NYCorp;1203895.1]

                                        2


     "ALTERNATE BASE RATE" means for any day, a rate per annum equal to the
highest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% per annum, and (c) the Federal Funds Effective Rate
in effect for such day plus 1/2 of 1% per annum.

     For purposes hereof, "Prime Rate" means the rate per annum announced by the
Administrative Agent from time to time as its base rate in effect at its
principal office in the City of New York; each change in the Prime Rate shall be
effective on the date such change is announced as effective.

     For purposes hereof, "Base CD Rate" means the sum of (a) the product of (i)
the Average Weekly Three-Month Secondary CD Rate and (ii) Statutory Reserves
PLUS (b) the Assessment Rate; "Average Weekly Three-Month Secondary CD Rate"
means the secondary market rate ("Secondary CD Rate") for three-month
certificates of deposit (secondary market) of major United States money center
banks for the most recent weekly period ending Friday reported in the Federal
Reserve Statistical release entitled "Selected Interest Rates" (currently
publication H.15) or any successor publication released during the week for
which the Secondary CD Rate is being determined. The Secondary CD Rate so
reported shall be in effect, for the purpose of this definition, for each day of
the week in which the release date of such publication occurs. If such
publication or a substitute containing the foregoing rate information is not
published by the Board for any week, such average rate shall be determined by
the Administrative Agent on the first Business Day of the week succeeding such
week for which such rate information is not published on the basis of bids
quoted at approximately 11:00 a.m., New York City time, on such day to the
Administrative Agent by three New York City negotiable certificate of deposit
dealers of recognized standing for the sale of secondary market Dollar
certificates of deposit with remaining maturities of approximately three months
issued by the United States offices of major United States money center banks.
Any change in the Base CD Rate due to a change in the Average Weekly Three-Month
Secondary CD Rate shall be effective on the effective date of such change in the
Average Weekly Three-Month Secondary CD Rate.

     For purposes hereof, "Federal Funds Effective Rate" means, for any day, an
interest rate per annum equal to the weighted average of the rates in effect on
such day for overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.

     For purposes hereof, any change in the Alternate Base Rate due to a change
in the Base CD Rate or the Federal Funds Effective Rate shall be effective on
the effective date of such change in the Base CD Rate or the Federal Funds
Effective Rate, as the

[NYCorp;1203895.1]

                                        3


case may be. If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain either the Base CD Rate or the Federal Funds Effective Rate,
or both such Interest Rates, for any reason, including, without limitation, the
inability or failure of the Administrative Agent to obtain sufficient bids or
publications in accordance with the terms hereof, the Alternate Base Rate shall
be the higher of the Prime Rate and such other rate, if any, referred to in the
definition of Alternate Base Rate that the Administrative Agent is able to
ascertain until the circumstances giving rise to such inability no longer exist.

     "ALTERNATE BASE RATE LOAN" means any Loan with respect to which the
Interest Rate is based on the Alternate Base Rate.

     "APPLICABLE FACILITY FEE PERCENTAGE" means, on any date, the applicable
percentage set forth below based upon the ratings applicable on such date to
Index Debt:

                                                    PERCENTAGE
                                                    ----------
          LEVEL 1
             A- or better by S&P
             A3 or better by Moody's                    .1000%
          LEVEL 2
             BBB+ by S&P
             Baa1 by Moody's                            .1250%
          LEVEL 3
             BBB by S&P
             Baa2 by Moody's                            .1500%
          LEVEL 4
             BBB- by S&P
             Baa3 by Moody's                            .1750%
          LEVEL 5
             BB+ or below by S&P
             Ba1 or below by Moody's                    .2000%

For purposes hereof, (i) if the ratings established (or deemed to have been
established, as provided in clause (ii) below) by Moody's and S&P shall fall
within different Levels, the rating in the inferior Level shall be disregarded,
unless one of the ratings is below Level 4, in which case the Applicable
Facility Fee Percentage will be based on the inferior of the two Levels, (ii) if
Moody's or S&P shall not have in effect a rating for Index Debt (other than (a)
because such rating agency shall no longer be in the business of rating
corporate debt obligations or (b) as a result of a

[NYCorp;1203895.1]

                                        4


change in the rating system of Moody's or S&P), then such rating agency will be
deemed to have established a rating for Index Debt in Level 5 and (iii) if any
rating established (or deemed to have been established, as provided in clause
(ii) above) by Moody's or S&P shall be changed (other than as a result of a
change in the rating system of Moody's or S&P), such change shall be effective
as of the date on which it is first publicly announced by the applicable rating
agency. Each change in the Applicable Facility Fee Percentage shall apply during
the period commencing on the effective date of such change and ending on the
date immediately preceding the effective date of the next such change. If the
rating system of Moody's or S&P shall change, or if either such rating agency
shall cease to be in the business of rating corporate debt obligations, the
Company and the Banks (acting through the Syndication Agent) shall negotiate in
good faith to amend the references to specific ratings in this definition to
reflect such changed rating system or the non-availability of ratings from such
rating agency.

     "APPLICABLE MARGIN" means, on any date, with respect to any Eurodollar
Loan, Certificate of Deposit Loan, Term Federal Funds Loan or Alternate Base
Rate Loan, as the case may be, the applicable spread set forth below based upon
the ratings applicable on such date to Index Debt:

                                                                       

                             LEVEL 1        LEVEL 2        LEVEL 3        LEVEL 4        LEVEL 5
S&P                       A- or better        BBB+           BBB            BBB-      BB+ or below
Moody's                   A3 or better        Baa1           Baa2           Baa3      Ba1 or below
Eurodollar                   .4000%          .5000%         .6000%         .7000%         .9250%
Certificate of Deposit       .5500%          .6500%         .7500%         .8500%        1.0750%
Term Federal Funds           .8000%          .9000%        1.0000%        1.1000%        1.3250%
Alternate Base Rate             0              0              0              0              0



For purposes hereof, (i) if the ratings established (or deemed to have been
established, as provided in clause (ii) below) by Moody's and S&P shall fall
within different Levels, the rating in the inferior Level shall be disregarded,
unless one of the ratings is below Level 4, in which case the Applicable Margin
will be based on the inferior of the two Levels, (ii) if Moody's or S&P shall
not have in effect a rating for Index Debt (other than (a) because such rating
agency shall no longer be in the business of rating corporate debt obligations
or (b) as a result of a change in the rating system of Moody's or S&P), then
such rating agency will be deemed to have established a rating for Index Debt in
Level 5 and (iii) if any rating established (or deemed to have been established,
as provided in clause (ii) above) by Moody's or S&P shall be changed (other than
as a result of a change in the rating system of Moody's or S&P), such change
shall be effective as of the date on which it is first publicly announced by the
applicable rating agency. Each change in the Applicable Margin shall apply
during the period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next

[NYCorp;1203895.1]

                                        5


such change. If the rating system of Moody's or S&P shall change, or if
either such rating agency shall cease to be in the business of rating corporate
debt obligations, the Company and the Banks (acting through the Syndication
Agent) shall negotiate in good faith to amend the references to specific ratings
in this definition to reflect such changed rating system or the non-availability
of ratings from such rating agency.

     "ASSENTING BANK" has the meaning assigned to that term in Section
2.09(e)(ii) hereof.

     "ASSESSMENT RATE" means, for any date, the rate per annum (expressed as a
percentage and rounded, if necessary, to the nearest 1/10,000 of one percent)
which is equal to the arithmetic average (determined by the Administrative
Agent) of the then current net annual assessment rate that will be employed in
determining amounts payable by The Chase Manhattan Bank and Bank of America,
N.A. to the Federal Deposit Insurance Corporation ("FDIC") (or any successor)
for insurance by the FDIC (or such successor) of time deposits made in Dollars
or, in the event that the Administrative Agent is unable to obtain such net
annual assessment rates from both The Chase Manhattan Bank and Bank of America,
N.A., the rate per annum (expressed as a percentage and rounded, if necessary,
to the nearest 1/10,000 of one percent) which is equal to such current net
annual assessment rate of The Chase Manhattan Bank or Bank of America, N.A., as
the case may be.

     "ASSIGNMENT AND ACCEPTANCE" means an instrument substantially in the form
of Exhibit G hereto.

     "BANK" and "BANKS" mean, respectively, (i) each bank or financial
institution which becomes a party to this Agreement by signing on the signature
pages hereto, by signing an Addendum or pursuant to Section 10.06(c) hereof, and
(ii) all such banks and financial institutions.

     "BANK FUNDING DEFAULT" means any failure by the Company to repay any
portion of a Loan which otherwise would have been repaid in accordance with the
second sentence of Section 2.07 hereof from proceeds of a new Loan or Loans,
which failure is attributable solely to the failure of any Bank to make
available all or any portion of the new Loan or Loans to be made by such Bank
pursuant to Section 2.07 hereof.

     "BASE CD RATE" has the meaning assigned to that term in the definition of
the term Alternate Base Rate.

     "BOARD" means the Board of Governors of the Federal Reserve System of the
United States.

     "BORROWING" means a borrowing by the Company from the Banks (or any of
them) pursuant to this Agreement (including any such borrowing made as a result
of the operation of Section 2.07, Section 2.09(e)(ii), Section 2.09(e)(iii),

[NYCorp;1203895.1]

                                        6


Section 2.13(c)(i), Section 2.14(i), Section 4.03(b)(ii), or Section
4.03(b)(iii) hereof, as the case may be).

     "BORROWING DATE" means the date on which a Borrowing is, or is to be,
consummated, as the context may indicate.

     "BUSINESS DAY" means any day not a Saturday, Sunday or legal holiday in the
State of New York or the State of California and on which (i) banks and the
Federal Reserve Bank of New York are open for business in New York City, and
(ii) banks are open for business in California; PROVIDED, HOWEVER, that when
used in connection with a Eurodollar Loan, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in Dollar deposits in
the London Interbank Market.

     "CALENDAR QUARTER" means a calendar quarter ending on the last day of any
March, June, September or December.

     "CAPITAL ADEQUACY CHANGE" has the meaning assigned to that term in Section
2.09(b) hereof.

     "CAPITAL ADEQUACY RULE" has the meaning assigned to that term in Section
2.09(b) hereof.

     "CAPITAL SECURITIES" means, with respect to the Company, (i) mandatorily
redeemable capital trust securities of trusts which are Subsidiaries and the
subordinated debentures of the Company in which the proceeds of the issuance of
such capital trust securities are invested, which securities and debentures have
an initial final maturity of at least thirty years, have no scheduled
amortization prior to maturity and, in the case of the debentures, allow for the
deferral of interest payments for up to five years and have been subordinated to
all other indebtedness of the Company and (ii) other securities whose basic
structure and terms are similar to those described in (i) which qualify as tier
1 capital under the capital adequacy rules and guidelines of the U.S. Federal
Reserve Board applicable to U.S. bank holding companies; PROVIDED, HOWEVER, that
in the case of (i) and (ii), such capital securities are accounted for on the
financial statements of the Company as a minority interest, Company-Obligated
Mandatorily Redeemable Trust Preferred Securities of Subsidiary Trust Holding
Solely Subordinated Notes of the Company, or similar balance sheet designation
not included in liabilities.

     "CERTIFICATE OF DEPOSIT LOAN" means any Loan with respect to which the
Company shall have selected an Interest Rate based on the Certificate of Deposit
Rate in accordance with the provisions of Article II hereof.

     "CERTIFICATE OF DEPOSIT RATE" means, for any Interest Period with respect
to any Certificate of Deposit Loan, an interest rate per annum (expressed as a
percentage and rounded, if necessary, to the nearest 1/10,000 of one percent)
equal to the sum

[NYCorp;1203895.1]

                                        7


of (a) the product of (i) the Fixed Certificate of Deposit Rate in effect for
such Interest Period and (ii) Statutory Reserves, PLUS (b) the Assessment Rate.

     For purposes hereof, "Fixed Certificate of Deposit Rate" means, for any
Interest Period with respect to any Certificate of Deposit Loan, the arithmetic
average (expressed as a percentage and rounded, if necessary, to the nearest
1/10,000 of one percent) as determined (subject to Section 10.08 hereof) by the
Administrative Agent on the basis of quotations, if any, received by the
Administrative Agent from the Reference Banks of the arithmetic average
(expressed as a percentage and rounded, if necessary, to the nearest 1/10,000 of
one percent) of the prevailing rates per annum bid at or about 10:00 a.m., New
York City time, to the Reference Banks on the first Business Day of the Interest
Period applicable to such Certificate of Deposit Loan by three New York City
negotiable certificate of deposit dealers of recognized standing selected by
each such Reference Bank for the purchase at face value of negotiable primary
Dollar certificates of deposit of such Reference Bank in an amount approximately
equal to such Reference Bank's portion of the principal amount of the Revolving
Credit Borrowing of which such Certificate of Deposit Loan forms a part (or, in
the case of a Competitive Loan, a principal amount that would have been such
Reference Bank's portion of the Revolving Credit Borrowing had such Competitive
Borrowing been a Revolving Credit Borrowing) and with a maturity comparable to
such Interest Period.

     "CODE" means the Internal Revenue Code of 1986, as amended from time to
time and in effect.

     "CO-DOCUMENTATION AGENTS" has the meaning assigned to that term in the
introduction to this Agreement.

     "COMPANY" has the meaning assigned to that term in the introduction to this
Agreement.

     "COMPETITIVE BID" means an offer by a Competitive Bid Bank to make a
Competitive Loan pursuant to Section 2.02 hereof.

     "COMPETITIVE BID BANKS" means those Banks from time to time designated by
the Company, by written notice to the Administrative Agent, as Competitive Bid
Banks entitled to submit Competitive Bids pursuant to Section 2.02(c) hereof.

     "COMPETITIVE BID RATE" means, as to any Competitive Bid made by a Bank
pursuant to Section 2.02(c) hereof, (a) in the case of a Eurodollar Loan or a
Certificate of Deposit Loan, the Margin, and (b) in the case of a Fixed Rate
Loan, the fixed rate of interest offered by the Bank making such Competitive
Bid.

     "COMPETITIVE BID REQUEST" means a request made pursuant to Section 2.02(a)
hereof substantially in the form of Exhibit B hereto.

[NYCorp;1203895.1]

                                        8


     "COMPETITIVE BORROWING" means, as the case may be, (a) a Borrowing
consisting of a Competitive Loan from a Competitive Bid Bank whose Competitive
Bid, accepted by the Company, is equal to the entire amount of such Borrowing,
or (b) a Borrowing consisting of concurrent Competitive Loans from each of the
Competitive Bid Banks whose Competitive Bid as a part of such Borrowing has been
accepted by the Company, in each case pursuant to the bidding procedure
described in Section 2.02 hereof.

     "COMPETITIVE LOAN" means a Loan from a Competitive Bid Bank to the Company
pursuant to the bidding procedure described in Section 2.02 hereof.

     "COMPETITIVE NOTES" and "COMPETITIVE NOTE" mean, respectively, (a) the
promissory notes of the Company substantially in the form of Exhibit A-1 hereto,
issued pursuant to and in accordance with this Agreement, as such promissory
notes may be amended or modified and in effect, and (b) a single such promissory
note.

     "CONFIDENTIAL INFORMATION" has the meaning assigned to that term in Section
10.02 hereof.

     "CONSOLIDATED ADJUSTED TANGIBLE NET WORTH" means the total of the Tangible
Net Worth of the Company and its Specified Subsidiaries, determined on a
consolidated basis in accordance with generally accepted accounting principles,
after eliminating all inter-company items.

     "CONSOLIDATED DEBT" means the sum of, without duplication (i) Consolidated
Funded Debt, including that portion of Consolidated Funded Debt maturing within
one year from the date of such determination, (ii) Consolidated Short-Term
Borrowings and (iii) obligations reflected for financial reporting purposes as
deferred credits for revenue from sales of future production of the Company and
its Specified Subsidiaries; PROVIDED, HOWEVER, that Consolidated Debt shall in
no event include any Capital Securities of the Company or any of its
Subsidiaries.

     "CONSOLIDATED FUNDED DEBT" means the total of all Funded Debt of the
Company and its Specified Subsidiaries, determined on a consolidated basis in
accordance with generally accepted accounting principles, after eliminating all
inter-company items.

     "CONSOLIDATED SECURED DEBT" means the total of all Secured Debt of the
Company and its Specified Subsidiaries other than any such Secured Debt which is
owed by a Specified Subsidiary to the Company or which is owed by one Specified
Subsidiary to another Specified Subsidiary.

     "CONSOLIDATED SHORT-TERM BORROWINGS" means the total of all Short-Term
Borrowings of the Company and its Specified Subsidiaries, determined on a
consolidated basis in accordance with generally accepted accounting principles,
after eliminating all inter-company items.

[NYCorp;1203895.1]

                                        9


     "CONSOLIDATED SUBSIDIARY" means any Subsidiary of the Company included in
the financial statements of the Company and its Subsidiaries prepared on a
consolidated basis in accordance with generally accepted accounting principles.

     "DOLLARS" and the symbol "$" mean the lawful currency of the United States
of America.

     "DOMESTIC LOANS" and "DOMESTIC LOAN" mean, respectively, (a) any Loans
during any period in which such Loans bear Interest Rates determined with
reference to the Alternate Base Rate, the Certificate of Deposit Rate or the
Term Federal Funds Rate, as the case may be, and (b) a single such Loan during
any such period.

     "EFFECTIVE DATE" means the date upon which the conditions of Section 7.01
shall have been satisfied. The Effective Date is January 4, 2001.

     "ELIGIBLE ASSIGNEE" means a commercial bank having total assets in excess
of $8,000,000,000 or any other financial institution mutually acceptable to the
Company and the Administrative Agent.

     "EMPLOYEE BENEFIT PLAN" has the meaning assigned to the term "employee
benefit plan" in Section 3(3) of ERISA.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and in effect.

     "EURODOLLAR LOAN" means any Loan with respect to which the Company shall
have selected an Interest Rate based on the Eurodollar Rate in accordance with
the provisions of Article II hereof.

     "EURODOLLAR RATE" means, for any Interest Period with respect to any
Eurodollar Loan, the rate per annum which is equal to the arithmetic average (as
determined by the Administrative Agent (subject to Section 10.08 hereof) on the
basis of quotations, if any, received by the Administrative Agent from the
Reference Banks, with such average expressed as a percentage and rounded, if
necessary, to the nearest 1/10,000 of one percent) of the average rate per annum
at which each Reference Bank is offered deposits in Dollars by prime banks in
the London Interbank Eurodollar market as of 11:00 a.m., London time, on the day
which is two (2) Business Days prior to the beginning of such Interest Period,
for settlement on the first day of such Interest Period and for the approximate
number of days comprised therein, in an amount comparable to the amount of such
Reference Bank's portion of the principal amount of the Revolving Credit
Borrowing of which such Eurodollar Loan forms a part (or, in the case of a
Competitive Loan, a principal amount that would have been such Reference Bank's
portion of the Revolving Credit Borrowing had such Competitive Borrowing been a
Revolving Credit Borrowing).

[NYCorp;1203895.1]

                                       10


     "EVENT OF DEFAULT" has the meaning assigned to that term in Section 8.01
hereof.

     "EXCEPTED SUBSIDIARY" means (a) each of Occidental Receivables, Inc., a
California corporation, OXY Receivables Corporation, a Delaware corporation, and
Occidental Petrochem Partner GP, Inc., a Delaware corporation, but only until
such time, if any, as it has been withdrawn from status as an Excepted
Subsidiary by an Officers' Certificate hereinafter referred to, effective as of
the date of such Officers' Certificate, (b) effective as of the date of the
Officers' Certificate hereinafter referred to, any Subsidiary of the Company
which has been designated as an Excepted Subsidiary after the Effective Date by
an Officers' Certificate and has not been withdrawn from status as an Excepted
Subsidiary by a subsequent Officers' Certifi cate effective as of the date of
such subsequent Officers' Certificate; PROVIDED that no Subsidiary of the
Company may be designated as an Excepted Subsidiary unless, immediately after
giving effect to such designation, the Company could become liable with respect
to at least $1.00 of additional Funded Debt in compliance with Section 6.02(c)
hereof, and (c) every Subsidiary of one or more Excepted Subsidiaries.

     "EXISTING CREDIT AGREEMENT" means the Credit Agreement dated as of March
20, 1997, among the Company, the banks party thereto, J.P. Morgan Securities
Inc. and BancAmerica Securities, Inc., as co-syndication agents, The Chase
Manhattan Bank, as documentation agent, and The Bank of Nova Scotia, as
administrative agent, as amended by the First Amendment dated as of August 31,
1998 and the Second Amendment dated as of March 15, 1999.

     "FACILITY FEE" has the meaning assigned to that term in Section 2.08
hereof.

     "FIXED RATE LOAN" means any Competitive Loan made by a Bank pursuant to
Section 2.02 hereof based upon a fixed rate per annum offered by such Bank
(expressed as a percentage to 1/10,000 of one percent) and accepted by the
Company.

     "FUNDED DEBT" means, with respect to any Person, all Indebtedness of such
Person (a) maturing one year or more from the date of the creation thereof, (b)
directly or indirectly renewable or extendible, at the option of the debtor, by
its terms or by the terms of any instrument or agreement relating thereto, to a
date one year or more from the date of the creation thereof, and (c) under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of one year or more, even though such Indebtedness may also
conform to the definition of Short- Term Borrowing.

     "INCREASED COST CHANGE" has the meaning assigned to that term in Section
2.09(a) hereof.

     "INDEBTEDNESS" means, with respect to any Person, as of the date on which
Indebtedness is to be determined, (a) all items (except items of capital stock
or of

[NYCorp;1203895.1]

                                       11


surplus or of deferred credits and other liabilities combined with deferred
credits for financial reporting purposes or minority interests in Subsidiaries
of such Person) which in accordance with generally accepted accounting
principles applied in the preparation of the financial statements of the Company
and its Consolidated Subsidiaries would be included in determining total
liabilities as shown on the liability side of a balance sheet of such Person,
(b) all indebtedness secured by any mortgage on, or other security interest in,
any property or asset owned or held by such Person subject thereto, whether or
not the indebtedness secured thereby shall have been assumed by such Person and
(c) all indebtedness of others which such Person has directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business), discounted with recourse, agreed (contingently or
otherwise) to purchase or repurchase or otherwise acquire, or in respect of
which such Person has otherwise become directly or indirectly liable. For the
purpose of computing the Indebtedness of any Person, there shall be excluded any
particular Indebtedness which meets one or more of the following categories:

          (i) Indebtedness with respect to which sufficient cash or cash
     equivalents or securities shall have been deposited in trust to provide for
     the full payment, redemption or satisfaction of the principal of, premium,
     if any, and interest to accrue on, such Indebtedness to the stated maturity
     thereof or to the date of prepayment thereof, as the case may be, and as a
     result of such deposit such particular Indebtedness, in accordance with
     generally accepted accounting principles, shall no longer be required to be
     reported on a balance sheet of such Person as a liability, and such cash or
     cash equivalents or securities shall not be required to be reported as an
     asset;

          (ii) Indebtedness which is not classified as Indebtedness under clause
     (a) of the definition of Indebtedness and (x) which arises from any
     commitment of such Person relating to pipeline operations to pay for
     property or services substantially without regard to the non-delivery of
     such property or the non-furnishing of such services or (y) which is
     Indebtedness of a partnership, joint venture or similar entity less than a
     majority of the equity interest of which is at the time owned by such
     Person or by such Person and one or more Subsidiaries of such Person or, if
     such Person is a Subsidiary of the Company, by such Person and either the
     Company or one or more other Subsidiaries of the Company or by such Person
     and the Company and one or more other Subsidiaries of the Company and which
     is payable solely out of the property or assets owned or held by such
     partnership, joint venture or similar entity or is secured by a mortgage
     on, or other security interest in, the property or assets owned or held by
     such partnership, joint venture or similar entity, in either case without
     any further recourse to or liability of such Person; or

          (iii) Indebtedness which is not classified as Indebtedness under
     clause (a) of the definition of Indebtedness and which is payable solely
     out of certain property or assets of such Person, or is secured by a
     mortgage on, or other security interest

[NYCorp;1203895.1]

                                       12


     in, certain property or assets owned or held by such Person, in either case
     without any further recourse to or liability of such Person, to the extent
     such Indebtedness exceeds (x) if such Person records such property or
     assets on its books, the value for such property or assets recorded on such
     books or (y) if such Person does not record such property or assets on its
     books, (1) if such Indebtedness is a general obligation of the entity which
     does record such property or assets on its books, the net investment in or
     advances to such entity as recorded on the books of such Person or (2) if
     such Indebtedness is payable solely out of certain property or assets of
     such entity, the lesser of the value for such property or assets recorded
     on the books of such entity or the net investment in or advances to such
     entity as recorded on the books of such Person, in each case determined in
     accordance with generally accepted accounting principles.

     "INDEMNIFIED LIABILITIES" has the meaning assigned to that term in Section
10.07 hereof.

     "INDEMNITEES" and "INDEMNITEE" have the respective meanings assigned to
those terms in Section 10.07 hereof.

     "INDEX DEBT" means senior, unsecured, non-credit-enhanced, publicly-held,
long- term indebtedness for borrowed money of the Company.

     "INTEREST PAYMENT DATE" means (a) with respect to Alternate Base Rate
Loans, the last day of each Calendar Quarter, commencing with the first of such
dates to occur after the date of this Agreement, (b) with respect to any
Eurodollar Loan, Certificate of Deposit Loan or Term Federal Funds Loan, the
last day of the Interest Period applicable thereto and, in the case of a
Eurodollar Loan or a Certificate of Deposit Loan with an Interest Period of 6
months or 180 days, respectively, also the day that would have been the Interest
Payment Date for such Loan had an Interest Period of 3 months or 90 days,
respectively, been applicable to such Loan, and (c) in the case of a Fixed Rate
Loan, the last day of the Interest Period applicable thereto and in the case of
a Fixed Rate Loan with an Interest Period of more than 90 days, each day within
such Interest Period that would have been an Interest Payment Date had such Loan
been a series of consecutive Fixed Rate Loans with 90-day Interest Periods.

     "INTEREST PERIOD" means (a) as to any Eurodollar Loan, the period
commencing on the Borrowing Date of such Loan and ending on the numerically
corresponding day (or if there is no such corresponding day, the last day) in
the calendar month that is 1, 2, 3 or 6 months later, as the Company may elect,
(b) as to any Certificate of Deposit Loan, the period commencing on the
Borrowing Date of such Loan and ending 30, 60, 90 or 180 days later, as the
Company may elect, (c) as to any Term Federal Funds Loan, the period commencing
on the Borrowing Date of such Loan and ending 7 days later, (d) as to any
Alternate Base Rate Loan, the period commencing on the Borrowing Date of such
Loan and ending 90 days later or, if

[NYCorp;1203895.1]

                                       13



earlier, on the date of prepayment of such Loan, and (e) as to any Fixed Rate
Loan, the period commencing on the Borrowing Date of such Loan and ending on the
date specified in the Competitive Bid accepted by the Company with respect to
such Fixed Rate Loan, which period shall not be less than 8 days or more than
360 days; PROVIDED, HOWEVER, that (i) if any Interest Period would end on a day
which shall not be a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless, with respect to Eurodollar Loans only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day, and (ii)
no Interest Period may be selected that ends later than the Maturity Date.

     "INTEREST RATE" means the rate or rates of interest to be determined as
provided in Article III hereof.

     "LIEN" means and includes any mortgage, pledge, lien, security interest,
conditional sale or other title retention agreement or other similar
encumbrance.

     "LOANS" and "LOAN" mean, respectively, (a) all loans made by the Banks or
Competitive Bid Banks or a single Bank or Competitive Bid Bank (as the context
may indicate) to the Company pursuant to this Agreement (including any such loan
made as a result of the operation of Section 2.07, Section 2.09(e)(ii), Section
2.09(e)(iii), Section 2.13(c)(i), Section 2.14(i), Section 4.03(b)(ii) or
Section 4.03(b)(iii) hereof, as the case may be), and (b) a single such loan
made by any Bank or Competitive Bid Bank.

     "MANAGING AGENTS" has the meaning assigned to that term in the introduction
to this Agreement.

     "MARGIN" means, as to any Competitive Bid relating to a Eurodollar Loan or
a Certificate of Deposit Loan, the margin (expressed as a percentage rate per
annum and rounded, if necessary, to the nearest 1/10,000 of one percent) to be
added to or subtracted from the Eurodollar Rate or the Certificate of Deposit
Rate, as applicable, to determine the interest rate offered by such Competitive
Bid Bank with respect to such Eurodollar Loan or Certificate of Deposit Loan.

     "MATURITY DATE" means the earlier of January 4, 2006, or the date on which
the Revolving Credit Commitments shall terminate in accordance with the terms of
this Agreement.

     "MOODY'S" means Moody's Investors Service, Inc. or any successor thereto.

     "MULTIEMPLOYER PLAN" has the meaning assigned to the term "multiemployer
plan" in Section 3(37) of ERISA.

[NYCorp;1203895.1]

                                       14


     "NOTE" means a Competitive Note or a Revolving Credit Note executed and
delivered by the Company as provided in Section 2.06 hereof.

     "OFFICERS' CERTIFICATE" means a certificate executed on behalf of the
Company by its President or one of its Vice Presidents and by one of its other
Vice Presidents or its Treasurer or one of its Assistant Treasurers or its
Controller or one of its Assistant Controllers.

     "PARTICIPANTS" and "PARTICIPANT" mean, respectively, (a) the banks and
other entities referred to in Section 10.06(b) hereof, and (b) any one of such
banks or other entities.

     "PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.

     "PERSON" means a corporation, an association, a partnership, an
organization, a business, an individual, a government or a political subdivision
thereof or a govern mental agency.

     "PLAN" means (a) with respect to the Company, any plan described in Section
4021(a) of ERISA and not excluded pursuant to Section 4021(b) thereof, under
which the Company or any Related Person to the Company has contributed, and (b)
with respect to any other Person, any employee benefit plan or other plan
established or maintained by such Person for the benefit of such Person's
employees and to which Title IV of ERISA applies.

     "PLAN ADMINISTRATOR" has the meaning assigned to the term "administrator"
in Section 3(16)(A) of ERISA.

     "PLAN SPONSOR" has the meaning assigned to the term "plan sponsor" in
Section 3(16)(B) of ERISA.

     "PRINCIPAL SUBSIDIARIES" and "PRINCIPAL SUBSIDIARY" mean, respectively, (a)
the following Persons (or any other Person which is, directly or indirectly, the
survivor or successor in interest in any merger or consolidation involving, or
the transferee with respect to all or substantially all of the assets of, the
following Persons): Occidental Chemical Corporation, a New York corporation,
Occidental Chemical Holding Corporation, a California corporation, Occidental
International Exploration and Production Company, a California corporation,
Occidental Oil and Gas Holding Corporation, a California corporation, Occidental
Petroleum Investment Co., a California corporation, Oxy CH Corporation, a
California corporation, Oxy Chemical Corporation, a California corporation, OXY
USA Inc., a Delaware corporation, Occidental Permian Ltd., a Texas limited
partnership, Occidental Petrochem Partner 2, Inc., a Delaware corporation,
Occidental PVC LP, Inc., a Delaware corporation, OXY Oil Partners, Inc., a
Delaware corporation, Oxy Vinyls, LP, a

[NYCorp;1203895.1]

                                       15


Delaware limited partnership, and any other Person which shall have become a
Subsidiary of the Company after December 31, 1999, and shall have, according to
its most recent audited year-end financial statements (or, if there are no
audited financial statements for its most recent fiscal year, its most recent
unaudited year-end financial statements) available at the date it became a
Subsidiary, total assets in excess of 5% of the consolidated assets of the
Company and its Consolidated Subsidiaries shown on the Company's most recent
audited year-end financial statements available at such time, and (b) any one of
such Persons (or any other Person which is, directly or indirectly, the survivor
or successor in interest in any merger or consolidation involving, or the
transferee with respect to all or substantially all of the assets of, any one of
such Persons); PROVIDED that, notwithstanding the foregoing, no Excepted
Subsidiary and no Person which is not a Consolidated Subsidiary shall be a
Principal Subsidiary.

     "PROHIBITED TRANSACTION" has the respective meanings assigned to that term
in Section 4975 of the Code and in Section 406 of ERISA.

     "PROPORTIONAL SHARE" means, at the time any determination thereof is to be
made and when used with reference to any Bank and any described aggregate or
total amount, an amount equal to the result obtained by multiplying such
described aggregate or total amount by a fraction, the numerator of which shall
be such Bank's Revolving Credit Commitment at such time and the denominator of
which shall be the Total Commitment at such time; PROVIDED, HOWEVER, that if
prior to the time of such determination the Revolving Credit Commitments shall
have been terminated pursuant to Section 8.01 hereof, any determination of
Proportional Share shall be based upon the amounts of Revolving Credit
Commitments and Total Commitment in effect immediately prior to such
termination.

     "REFERENCE BANKS" and "REFERENCE BANK" mean, respectively, (a) the
following Persons: The Chase Manhattan Bank, The Bank of Nova Scotia, and ABN
AMRO Bank N.V., or any other Person hereafter appointed as a Reference Bank
pursuant to Section 10.08 hereof, and (b) any one of such Persons.

     "REFINANCING LOAN" means (A) any Revolving Credit Loan (i) which is made on
the date of repayment of any other Revolving Credit Loan and (ii) all of the
proceeds of which are applied, in accordance with Section 2.07 hereof, to the
repayment of such other Revolving Credit Loan, and (B) any Revolving Credit Loan
(i) which is made on the date of prepayment of any other Revolving Credit Loan
and (ii) all of the proceeds of which are applied, in accordance with Section
4.02 hereof, to the prepayment of such other Revolving Credit Loan. A
Refinancing Loan may be a Eurodollar Loan, a Certificate of Deposit Loan, a Term
Federal Funds Loan (except that a Term Federal Funds Loan may not be refinanced
with another Term Federal Funds Loan), an Alternate Base Rate Loan, or a
combination thereof, irrespective of whether the Loan or Loans being refinanced
with the proceeds of such Refinancing

[NYCorp;1203895.1]

                                       16


Loan were bearing interest based upon the same or a different interest rate
basis as such Refinancing Loan.

     "REGISTER" has the meaning assigned to that term in Section 10.06(e)
hereof.

     "REGULATION D" means Regulation D of the Board, as the same may at any time
be amended or modified and in effect.

     "REGULATION U" means Regulation U of the Board, as the same may at any time
be amended or modified and in effect.

     "REGULATION X" means Regulation X of the Board, as the same may at any time
be amended or modified and in effect.

     "RELATED PERSON" means, with respect to any Person, any trade or business
(whether or not incorporated) which, together with such Person, is under common
control as described in Section 414(c) of the Code.

     "REPLACEMENT LENDER" means a lending institution designated by the Company
pursuant to Section 2.09(e)(iv), Section 2.13(c)(ii), Section 2.14(ii), or
Section 4.03(b)(iv) hereof, which, at the time of such designation, is not a
Bank.

     "REPORTABLE EVENT" means a "reportable event" described in Section 4043(b)
of ERISA.

     "REQUIRED BANKS" means, at the time any determination thereof is to be
made, Banks whose Revolving Credit Commitments aggregate at least 51% of the
Total Commitment, or, if the Revolving Credit Commitments shall have been
terminated pursuant to Section 8.01 hereof, Banks whose Revolving Credit
Commitments immediately prior to such termination aggregated at least 51% of the
Total Commitment immediately prior to such termination.

     "REVOLVING CREDIT BORROWING" means a Borrowing (a) pursuant to Section
2.01(a) or Section 2.07 hereof consisting of simultaneous Revolving Credit Loans
from each of the Banks in accordance with their respective Proportional Share of
such Borrowing, or (b) made as a result of the operation of Section 2.09(e)(ii),
Section 2.09(e)(iii), Section 2.13(c)(i), Section 2.14(i), Section 4.03(b)(ii),
or Section 4.03(b)(iii) hereof.

     "REVOLVING CREDIT BORROWING REQUEST" means a request made pursuant to
Section 2.01(b) hereof substantially in the form of Exhibit E hereto.

     "REVOLVING CREDIT COMMITMENT" means, when used with reference to any Bank
at the time any determination thereof is to be made, the amount of such Bank's
commitment hereunder to extend credit to the Company as set forth in

[NYCorp;1203895.1]

                                       17


Section 2.01(a) hereof, which Revolving Credit Commitment, subject to Section
8.01 hereof, shall be the amount set forth opposite the name of such Bank on
Schedule I hereto or the amount set forth in an Addendum of such Bank delivered
in accordance with Section 10.16 hereof, as such commitment may from time to
time be adjusted under Section 2.09(e)(ii), Section 2.13(c)(i), Section 2.14(i)
or Section 4.03(b)(ii) hereof, reduced by the amount of any permanent
reduction(s) in such amount made pursuant to Section 4.01 or Section 4.03(a)
hereof.

     "REVOLVING CREDIT COMMITMENTS" means each Revolving Credit Commitment,
collectively.

     "REVOLVING CREDIT LOAN" shall have the meaning assigned to that term in
Section 2.01(a) hereof, and shall include, without limitation, any Substitute
Revolving Credit Loan.

     "REVOLVING CREDIT NOTES" and "REVOLVING CREDIT NOTE" mean, respectively,
(a) the promissory notes of the Company substantially in the form of Exhibit A-2
hereto, issued pursuant to and in accordance with this Agreement, as such
promissory notes may at any time be amended or modified and in effect, and (b) a
single such promissory note.

     "SECURED DEBT" means any Funded Debt of the Company or any Specified
Subsidiary secured by a Lien on assets of the Company or any Specified
Subsidiary, plus (without duplication) obligations of the Company or any
Specified Subsidiary reflected for financial reporting purposes as deferred
credits for revenue from sales of future production secured by a Lien on any
property of the Company or any Specified Subsidiary. For the purpose of
computing Secured Debt, the portion of any secured obligation which exceeds the
book value (as reflected on the Company's consolidated balance sheet) of the
assets of the Company and its Specified Subsidiaries securing such obligation
shall be excluded.

     "SHORT-TERM BORROWING" means, with respect to any Person, all Indebtedness
of such Person in respect of borrowed money maturing on demand or within one
year from the date of the creation thereof and not directly or indirectly
renewable or extendible, at the option of the debtor, by its terms or by the
terms of any instrument or agreement relating thereto, to a date one year or
more from the date of the creation thereof; PROVIDED that Indebtedness of such
Person in respect of borrowed money arising under a revolving credit or similar
agreement which obligates the lender or lenders to extend credit over a period
of one year or more shall constitute Funded Debt and not a Short-Term Borrowing
even though the same matures on demand or within one year from the date as of
which such Short-Term Borrowing is to be determined.

     "SPECIFIED SUBSIDIARY" means, at any time, any Consolidated Subsidiary, a
majority (by number of votes) of the Voting Securities of which is at such time

[NYCorp;1203895.1]

                                       18


owned directly by the Company or by one or more of its Specified Subsidiaries,
or by the Company and one or more of its Specified Subsidiaries, and which is
not at such time designated as an Excepted Subsidiary; PROVIDED that (i) at the
time any Subsidiary of the Company is withdrawn from status as an Excepted
Subsidiary, such Subsidiary shall not be liable with respect to any Indebtedness
which it could not become liable with respect to hereunder on the date of such
withdrawal if it were then a Specified Subsidiary, and (ii) immediately after
giving effect to such withdrawal, no Event of Default or Unmatured Event of
Default shall have occurred and be continuing.

     "S&P" means Standard & Poor's Corporation or any successor thereto.

     "STATUTORY RESERVES" means the result (expressed as a percentage and
rounded, if necessary, to the nearest 1/10,000 of one percent) obtained by
dividing the number one by the number one minus the reserve percentage
(expressed as a decimal) (including, without limitation, any marginal, special,
emergency, or supplemental reserves) established by the Board and to which the
Administrative Agent is subject for time deposits in Dollars of over $100,000
with maturities approximately equal to the applicable Interest Period. Such
reserve percentage shall include, without limitation, reserves imposed under
Regulation D. Statutory Reserves shall be adjusted from time to time on and as
of the effective date of any change in the reserve percentage of the
Administrative Agent.

     "SUBSIDIARY" means, with respect to any Person, any corporation,
association, partnership or other business entity, a majority (by number of
votes) of the Voting Securities of which is at the time owned by such Person or
by one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries.

     "SYNDICATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.

     "TANGIBLE NET WORTH" of any Person means the sum of the amounts set forth
on the balance sheet of such Person as (a) the par or stated value of all
outstanding capital stock, (b) the amount of the Capital Securities of such
Person, without duplication of the mandatorily redeemable capital trust
securities and the subordinated debentures of the Company in which the proceeds
of the issuance of such capital trust securities are invested; PROVIDED that the
aggregate amount of Capital Securities added pursuant to this clause (b) at any
time of issuance thereof shall not exceed 5% of the sum of Consolidated Debt and
Consolidated Adjusted Tangible Net Worth, calculated as of the time of such
issuance of any such securities and (c) capital surplus, earned surplus and
premium on capital stock LESS (i) the par or stated value of all redeemable
preferred stock, (ii) that portion of the book value of all assets which would
be treated as intangibles under generally accepted accounting principles,
including without limitation, all such items as goodwill, trademarks, trade
names, brands, copyrights, patents, licenses and rights with respect

[NYCorp;1203895.1]

                                       19


to the foregoing and unamortized debt discount and expenses, and (iii) all
investments in or advances to Excepted Subsidiaries appearing on the asset side
of such balance sheet.

     "TAXES" has the meaning assigned to that term in Section 2.13(a) hereof.

     "TERM FEDERAL FUNDS LOAN" means any Loan with respect to which the Company
shall have selected an Interest Rate based on the Term Federal Funds Rate in
accordance with the provisions of Article II hereof.

     "TERM FEDERAL FUNDS RATE" means, for any Interest Period with respect to
any Term Federal Funds Loan, the rate per annum which is equal to the arithmetic
average (as determined by the Administrative Agent (subject to Section 10.08
hereof) on the basis of quotations, if any, received by the Administrative Agent
from the Reference Banks, with such average expressed as a percentage and
rounded, if necessary, to the nearest 1/10,000 of one percent) of the rates per
annum at which each Reference Bank is offered term Federal funds in the term
Federal funds market as of 10:00 a.m., New York City time, on the first Business
Day of such Interest Period, for settlement on such day and for the number of
days comprised therein in an amount comparable to the amount of the Term Federal
Funds Loan of such Reference Bank to be outstanding for such Interest Period.

     "TOTAL COMMITMENT" means at any time the determination thereof is to be
made, the aggregate amount of the Revolving Credit Commitments of the Banks, as
in effect at such time.

     "TRANSFEREE" has the meaning assigned to that term in Section 10.06(g)
hereof.

     "UNMATURED EVENT OF DEFAULT" means an event, act or occurrence which with
the giving of notice or the lapse of time (or both) would become an Event of
Default.

     "VOTING SECURITIES" means stock or partnership interests of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association,
partnership or other business entity in question, other than stock or
partnership interests having the right so to vote solely by reason of the
happening of a contingency.

     SECTION 1.02. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles as in effect from time to time, including, without
limitation, applicable statements, bulletins and interpretations issued by the
Financial Accounting Standards Board and bulletins, opinions, interpretations
and statements issued by the American Institute of Certified Public Accountants
or its committees. In the event that an actual or anticipated change (which term
for all purposes of this Agreement

[NYCorp;1203895.1]

                                       20


includes, without limitation, the adoption of a new statement of financial
accounting standards) in generally accepted accounting principles would affect
the computation of any dollar amounts or ratios referred to in the financial
covenants herein, the parties to the Agreement will, promptly upon request,
enter into negotiations in good faith in an effort to agree upon amendments
which will most nearly preserve the original intent of such financial covenants.
Pending agreement on such amendments, such financial covenants will remain in
effect but will be measured by reference to generally accepted accounting
principles as in effect immediately prior to such change. When used herein, the
term "financial statements" shall include the notes and schedules thereto, but
need not include such notes or schedules when used with reference to such
statements of any Person as of any date other than the end of a fiscal year of
such Person.


                                   ARTICLE II

                                 LOAN PROVISIONS

     SECTION 2.01. REVOLVING CREDIT COMMITMENTS; PROCEDURE FOR REQUESTS. (a)
Subject to the terms and conditions of this Agreement, each Bank, severally and
not jointly, agrees to make revolving credit loans ("REVOLVING CREDIT LOANS") to
the Company at any time and from time to time on and after the Effective Date
and until the Maturity Date; PROVIDED, HOWEVER, that (i) at no time shall the
outstanding aggregate principal amount of all Revolving Credit Loans made by a
Bank exceed its Proportional Share of the outstanding aggregate principal amount
of all Revolving Credit Loans made by all Banks (notwithstanding the fact that
the aggregate principal amount outstanding at any time of all Revolving Credit
Loans and Competitive Loans made by a Bank may exceed the Revolving Credit
Commitment of such Bank then in effect) and (ii) at no time shall the sum of the
outstanding aggregate principal amount of all Revolving Credit Loans and
Competitive Loans exceed the Total Commitment; PROVIDED FURTHER that nothing
contained herein shall be deemed to prohibit the making of, or to relieve any
Bank of its obligation to make, Revolving Credit Loans the proceeds of which are
to be applied solely to the repayment of principal of any Loan pursuant to
Section 2.07 hereof. The Company may borrow, repay, prepay and reborrow
Revolving Credit Loans on and after the Effective Date and prior to the Maturity
Date. The Revolving Credit Commitments shall automatically and permanently
terminate on the Maturity Date.

     (b) To effect a Revolving Credit Borrowing, the Company shall give the
Administrative Agent notice (by telephone (confirmed promptly in writing) or
telecopier), substantially in the form of Exhibit E hereto, (i) in the case of a
Revolving Credit Borrowing consisting of Eurodollar Loans, not later than 12:00
noon, New York City time, three Business Days before such Revolving Credit
Borrowing, (ii) in the case of a Revolving Credit Borrowing consisting of
Certificate of Deposit Loans, not later than 12:00 noon, New York City time, two
Business Days

[NYCorp;1203895.1]

                                       21


before such Revolving Credit Borrowing, (iii) in the case of a Revolving Credit
Borrowing consisting of Term Federal Funds Loans, not later than 12:00 noon New
York City time, one Business Day before such Revolving Credit Borrowing, and
(iv) in the case of a Revolving Credit Borrowing consisting of Alternate Base
Rate Loans, not later than 1:00 p.m., New York City time, on the Business Day of
such Revolving Credit Borrowing. Such notice shall be irrevocable (except as
provided in Section 2.09(e)(i), Section 2.13(c)(iii), Section 3.03(b), Section
3.03(d) or Section 4.03(b)(i) hereof) and shall in each case refer to this
Agreement and specify (x) whether the Loans then being requested are to be
Eurodollar Loans, Certificate of Deposit Loans, Term Federal Funds Loans or
Alternate Base Rate Loans, or a combination thereof, (y) the Borrowing Date with
respect to such Loans (which shall be a Business Day) and the aggregate
principal amount thereof, and (z) in the case of Eurodollar Loans and
Certificate of Deposit Loans, the Interest Period with respect thereto. If no
Interest Period with respect to any Eurodollar Loan or Certificate of Deposit
Loan is specified in any such notice, then (i) in the case of a Eurodollar Loan,
the Company shall be deemed to have selected an Interest Period of one month's
duration, and (ii) in the case of a Certificate of Deposit Loan, the Company
shall be deemed to have selected an Interest Period of 30 days' duration. The
Administrative Agent shall promptly advise the other Banks by telecopier of any
notice given pursuant to this Section 2.01(b) and of each Bank's portion of the
requested Revolving Credit Borrowing.

     SECTION 2.02. COMPETITIVE LOANS; PROCEDURE FOR REQUESTS. (a) Subject to the
terms and conditions of this Agreement, the Company may from time to time
request Competitive Bid Banks to submit Competitive Bids, and the Competitive
Bid Banks may submit such Competitive Bids and, from time to time on and after
the Effective Date and prior to the Maturity Date, may make Competitive Loans in
accordance with the procedures set forth in this Section 2.02. At no time shall
(i) the outstanding aggregate principal amount of all Competitive Loans made by
a Competitive Bid Bank or (ii) the outstanding aggregate principal amount of all
Revolving Credit Loans and Competitive Loans made by all Banks exceed the Total
Commitment, notwithstanding the fact that the aggregate principal amount
outstanding at any time of all Competitive Loans made by a Competitive Bid Bank
may exceed the Revolving Credit Commitment of such Bank.

     (b) To request Competitive Bids, the Company shall give the Administrative
Agent (by telephone (confirmed in writing no later than 5:00 p.m., New York City
time, on the same day) or telecopier) a duly completed Competitive Bid Request
substantially in the form of Exhibit B hereto, to be received by the
Administrative Agent (i) in the case of Eurodollar Loans, not later than 12:00
noon, New York City time, five Business Days before a proposed Competitive
Borrowing, (ii) in the case of Certificate of Deposit Loans, not later than
12:00 noon, New York City time, four Business Days before a proposed Competitive
Borrowing, and (iii) in the case of Fixed Rate Loans, not later than 11:00 a.m.,
New York City time, one Business Day before a proposed Competitive Borrowing. No
Alternate Base Rate Loan or Term

[NYCorp;1203895.1]

                                       22


Federal Funds Loan shall be requested in, or made pursuant to, a Competitive Bid
Request. A Competitive Bid Request that does not conform substantially to the
format of Exhibit B hereto may be rejected in the Administrative Agent's sole
discretion, and the Administrative Agent shall promptly notify the Company of
such rejection by telephone (confirmed promptly in writing) or telecopier. A
Competitive Bid Request shall in each case refer to this Agreement and specify
(x) whether the Loans then being requested are to be Eurodollar Loans,
Certificate of Deposit Loans or Fixed Rate Loans, (y) the Borrowing Date with
respect to such Loans (which shall be a Business Day) and the aggregate
principal amount thereof (which shall be in amounts such that the aggregate
principal amount of all Loans outstanding immediately following the Borrowing of
the Loans pursuant to such Competitive Bid Request shall not exceed the Total
Commitment), and (z) the Interest Period with respect thereto. The aggregate
principal amount of the Competitive Borrowing requested pursuant to any
Competitive Bid Request shall not be less than $50,000,000. Promptly after its
receipt of a Competitive Bid Request that is not rejected as aforesaid, the
Administrative Agent shall invite by telecopier (in the form set forth in
Exhibit C hereto) the Competitive Bid Banks to bid, on the terms and conditions
of this Agreement, to make Competitive Loans pursuant to the Competitive Bid
Request.

     (c) Each Competitive Bid Bank may, in its sole discretion, make one or more
Competitive Bids to the Company responsive to the Competitive Bid Request. Each
Competitive Bid by a Competitive Bid Bank must be in the form of Exhibit D
hereto and must be received by the Administrative Agent by telecopier, (i) in
the case of Eurodollar Loans, not later than 2:00 p.m., New York City time, four
Business Days before a proposed Competitive Borrowing, (ii) in the case of
Certificate of Deposit Loans, not later than 2:00 p.m., New York City time,
three Business Days before a proposed Competitive Borrowing, and (iii) in the
case of Fixed Rate Loans, not later than 9:30 a.m., New York City time, on the
Borrowing Date of the proposed Competitive Borrowing. Competitive Bids that do
not conform substantially to the format of Exhibit D hereto may be rejected by
the Administrative Agent after conferring with, and upon the instruction of, the
Company, and the Administrative Agent shall notify the Competitive Bid Bank that
submitted such Competitive Bid of such rejection as soon as practicable. Each
Competitive Bid shall refer to this Agreement and specify (x) the principal
amount (which shall be in a minimum principal amount of $5,000,000 and in an
integral multiple of $l,000,000 and which may equal the entire aggregate
principal amount of the Competitive Borrowing requested by the Company) of the
Competitive Loan that the Competitive Bid Bank is willing to make to the
Company, (y) the Competitive Bid Rate at which the Competitive Bid Bank is
prepared to make the Competitive Loan, and (z) the Interest Period with respect
thereto. Except as provided in Section 2.09(e)(i), Section 2.13(c)(iii), Section
3.03(c), and Section 4.03(b)(i) hereof, a Competitive Bid submitted by a
Competitive Bid Bank pursuant to this Section 2.02(c) shall be irrevocable. If
any Competitive Bid Bank shall elect not to make a Competitive Bid with respect
to a proposed Competitive Borrowing, such Competitive Bid Bank shall

[NYCorp;1203895.1]

                                       23


so notify the Administrative Agent by telecopier (i) in the case of Eurodollar
Loans, not later than 2:00 p.m., New York City time, four Business Days before
such proposed Competitive Borrowing, (ii) in the case of Certificate of Deposit
Loans, not later than 2:00 p.m., New York City time, three Business Days before
such proposed Competitive Borrowing, and (iii) in the case of Fixed Rate Loans,
not later than 9:30 a.m., New York City time, on the Borrowing Date of such
proposed Competitive Borrowing; PROVIDED, HOWEVER, that the failure of any
Competitive Bid Bank to give such notice shall not cause such Bank to be
obligated to make any Competitive Loan as part of such Competitive Borrowing.

     (d) The Administrative Agent shall notify the Company of all the
Competitive Bids made, the Competitive Bid Rate and the principal amount of each
Competitive Loan in respect of which a Competitive Bid was made and the identity
of the Competitive Bid Bank that made each bid; such notice shall be given to
the Company by telephone (confirmed immediately by telecopier) not later than
(i) 45 minutes (in the case of Competitive Bids for Fixed Rate Loans) and (ii) 2
hours (in the case of other Competitive Bids) after the latest time by which
such Competitive Bids were required to be received by the Administrative Agent
pursuant to Section 2.02(c) hereof. The Administrative Agent shall send a copy
of all Competitive Bids to the Company for its records as soon as practicable
after completion of the bidding process set forth in this Section 2.02.

     (e) The Company may in its sole and absolute discretion, subject only to
the provisions of this Section 2.02(e), accept or reject any Competitive Bid
referred to in Section 2.02(d) hereof. The Company shall notify the
Administrative Agent (by telephone or telecopier) whether and to what extent it
has decided to accept or reject any or all of the Competitive Bids referred to
in Section 2.02(d) hereof, (i) in the case of Eurodollar Loans, not later than
12:00 noon, New York City time, three Business Days before a proposed
Competitive Borrowing, (ii) in the case of Certificate of Deposit Loans, not
later than 12:00 noon, New York City time, two Business Days before a proposed
Competitive Borrowing, and (iii) in the case of Fixed Rate Loans, not later than
10:30 a.m., New York City time, on the Borrowing Date of the proposed
Competitive Borrowing; PROVIDED, HOWEVER, that (v) the failure by the Company to
give such notice shall be deemed to be a rejection of all the Competitive Bids
referred to in Section 2.02(d) hereof, (w) the Company shall not accept a
Competitive Bid made at a particular Competitive Bid Rate if the Company has
rejected a Competitive Bid made at a lower Competitive Bid Rate, (x) the
aggregate principal amount of the Competitive Borrowing to be made may not
exceed the principal amount of Competitive Loans requested by the Company
pursuant to the related Competitive Bid Request, (y) if the Company shall accept
Competitive Bids made at a particular Competitive Bid Rate but shall be
restricted by other conditions hereof from borrowing the aggregate principal
amount of Competitive Loans in respect of which Competitive Bids at such
Competitive Bid Rate have been made, then, to the extent of the aggregate
principal amount of the Competitive Borrowing to be made, the Company shall
accept a PRO RATA portion of each Competitive Bid

[NYCorp;1203895.1]

                                       24


made at such Competitive Bid Rate based as nearly as possible on the respective
principal amounts of Competitive Loans for which such Competitive Bids were made
(PROVIDED that if the available principal amount of Competitive Loans to be so
allocated is not sufficient to enable Competitive Loans to be so allocated to
each such Competitive Bid Bank in a minimum principal amount of $5,000,000 and
in integral multiples of $1,000,000, the Company shall select the Competitive
Bid Banks to be allocated such Competitive Loans and shall round allocations up
or down to the next higher or lower multiple of $1,000,000 as it shall deem
appropriate), and (z) no Competitive Bid shall be accepted for a Competitive
Loan unless such Competitive Loan is in a minimum principal amount of $5,000,000
and an integral multiple of $1,000,000. If telephonic notice of acceptance or
rejection of a Competitive Bid is given by the Company to the Administrative
Agent pursuant to the immediately preceding sentence, such notice shall be
confirmed in writing no later than (A) in the case of Eurodollar Loans or
Certificate of Deposit Loans, 5:00 p.m., New York City time, on the day such
notice is given, or (B) in the case of Fixed Rate Loans, 1:00 p.m., New York
City time, on the day such notice is given. Except as provided in Section
2.09(e)(i), Section 2.13(c)(iii), Section 3.03(c), and Section 4.03(b)(i)
hereof, a notice given by the Company pursuant to this Section 2.02(e) shall be
irrevocable.

     (f) The Administrative Agent shall promptly notify by telecopier each of
the Competitive Bid Banks which has submitted a Competitive Bid whether or not
their Competitive Bids have been accepted (and if so, in what amount and at what
Competitive Bid Rate), and each successful Competitive Bid Bank shall thereupon
become bound to make the Competitive Loan in respect of which its Competitive
Bid has been accepted.

     (g) A Competitive Borrowing shall not be made within five Business Days of
the Borrowing Date of any other Competitive Borrowing, unless the Company and
the Administrative Agent shall mutually agree otherwise.

     (h) If the Administrative Agent shall elect to submit a Competitive Bid in
its capacity as a Competitive Bid Bank, it shall submit such bid to the Company
one quarter of an hour earlier than the latest time at which the other
Competitive Bid Banks are required to submit their bids to the Administrative
Agent pursuant to Section 2.02(c) hereof.

     SECTION 2.03.  [Intentionally deleted.]

     SECTION 2.04.  [Intentionally deleted.]

     SECTION 2.05. GENERAL TERMS RELATING TO THE LOANS. (a) Each Borrowing made
by the Company on any Borrowing Date shall be (i) in the case of Competitive
Loans, in an integral multiple of $1,000,000 and in a minimum aggregate
principal amount of $5,000,000 and (ii) in the case of Revolving Credit Loans,
in an integral

[NYCorp;1203895.1]

                                       25



multiple of $10,000,000 and in a minimum aggregate principal amount of
$50,000,000. Competitive Loans shall be made by the Competitive Bid Banks in
accordance with Section 2.02(e) hereof, Revolving Credit Loans shall be made by
the Banks ratably in accordance with their respective Revolving Credit
Commitments on the Borrowing Date of the Revolving Credit Borrowing; PROVIDED,
HOWEVER, that the failure of any Bank to make any Loan shall not in itself
relieve any other Bank of its obligation to lend hereunder.

     (b) Each Competitive Loan shall be a Eurodollar Loan, a Certificate of
Deposit Loan or a Fixed Rate Loan, and each Revolving Credit Loan shall be a
Eurodollar Loan, a Certificate of Deposit Loan, a Term Federal Funds Loan or an
Alternate Base Rate Loan, as the Company may request subject to and in
accordance with Section 2.01 or Section 2.02 hereof, as applicable. Each Bank
may at its option make any Eurodollar Loan by causing a foreign branch or
affiliate of such Bank to make such Loan; PROVIDED, HOWEVER, that (i) any
exercise of such option shall not affect the obligation of the Company to repay
such Loan to such Bank in accordance with the terms of the applicable Note, (ii)
such Bank shall promptly advise the Company of the exercise of such option, the
name and address of such foreign branch or affiliate and such other information
with respect to such branch or affiliate as the Company may reasonably request,
and (iii) the exercise of such option, as of the time of such exercise, shall
not materially increase the amounts which would have been payable by the Company
to such Bank under this Agreement and the Notes. Revolving Credit Loans of more
than one interest rate option may be outstanding at the same time; PROVIDED,
HOWEVER, that, unless the Administrative Agent and the Company shall otherwise
agree, the Company shall not be entitled to request any Revolving Credit Loan or
Competitive Loan which, if made, would result in an aggregate of more than ten
separate Revolving Credit Loans of any Bank and ten separate Competitive Loans
being outstanding hereunder at any one time. For purposes of the foregoing,
Revolving Credit Loans having different Interest Periods, regardless of whether
they commence on the same date, and Revolving Credit Loans having different
interest rate options, shall be considered separate Loans.

     (c) Subject to Section 2.07 hereof, each Bank shall make available its
portion, as appropriate, of each Competitive Borrowing and Revolving Credit
Borrowing on the proposed Borrowing Date thereof by paying the amount required
to the Administrative Agent in New York, New York, in Dollars, in immediately
available funds not later than 11:00 a.m. (or 12:00 noon in the case of Fixed
Rate Loans or 2:00 p.m. in the case of Alternate Base Rate Loans), New York City
time, and the Administrative Agent shall by 1:00 p.m. (or 3:00 p.m. in the case
of Alternate Base Rate Loans), New York City time, credit the amounts so
received (or, subject to Section 2.05(d) hereof, its own funds but, in either
case, in Dollars in immediately available funds) to such account of the Company
as it shall designate in writing to the Administrative Agent or, if Loans are
not made on such date because any condition precedent to a Borrowing herein
specified shall not have been met, promptly return the amounts so received to
the respective Banks.

[NYCorp;1203895.1]

                                       26


     (d) Unless the Administrative Agent shall have been notified by a Bank
prior to the Borrowing Date of any Loan that such Bank does not intend to make
available to the Administrative Agent such Bank's portion of the Loan to be made
on such Borrowing Date, the Administrative Agent may assume that such Bank has
made such proceeds available to the Administrative Agent on such date, and the
Administrative Agent may in reliance upon such assumption (but shall not be
required to) make available to the Company a corresponding amount. If, and only
if, such notice is not given and such corresponding amount is not in fact made
available to the Administrative Agent by such Bank, the Administrative Agent
shall be entitled to recover such amount on demand from such Bank (or, if such
Bank fails to pay such amount forthwith upon such demand, from the Company)
together with interest thereon in respect of each day during the period
commencing on the date such amount was made available to the Company and ending
on (but excluding) the date the Administrative Agent recovers such amount at a
rate per annum equal to (i) in the case of such Bank, the Federal Funds
Effective Rate and (ii) in the case of the Company, the applicable Interest Rate
in respect of such Loan.

     SECTION 2.06. NOTES. The Competitive Loans made by each Competitive Bid
Bank shall be evidenced by a single Competitive Note duly executed on behalf of
the Company, dated the date of this Agreement, in substantially the form
attached hereto as Exhibit A-1 with the blanks appropriately filled, payable to
the order of such Competitive Bid Bank in a principal amount equal to the Total
Commitment. The Revolving Credit Loans made by each Bank shall be evidenced by a
single Revolving Credit Note duly executed on behalf of the Company, dated the
date of this Agreement, in substantially the form attached hereto as Exhibit A-2
with the blanks appropriately filled, payable to the order of such Bank in a
principal amount equal to the Revolving Credit Commitment of such Bank. The
outstanding principal balance of each Revolving Credit Loan and each Competitive
Loan, as evidenced by the relevant Note, shall be payable on the last day of the
Interest Period applicable to such Loan. Each Note shall bear interest from the
date thereof on the outstanding principal balance thereof as set forth in
Section 3.01 hereof. Each Bank shall, and is hereby authorized by the Company
to, endorse on the schedule attached to the relevant Note held by such Bank (or
on a continuation of such schedule attached to each such Note and made a part
thereof) an appropriate notation evidencing the Borrowing Date and amount of
each Loan of such Bank, each payment or prepayment (including any deemed
repayment pursuant to Section 2.07 hereof) of principal of any Loan and the
other information provided for on such schedule; PROVIDED, HOWEVER, that the
failure of any Bank to make such a notation or any error therein shall not in
any manner affect the obligation of the Company to repay the Loans made by such
Bank in accordance with the terms of the relevant Note.

     SECTION 2.07. REFINANCINGS. The Company may refinance all or any part of
any Loan with a Loan or Loans of the same or a different type made pursuant to
Section 2.01 or Section 2.02 hereof; PROVIDED, HOWEVER, that (i) no Term Federal
Funds Loan may be refinanced with another Term Federal Funds Loan, and (ii) the

[NYCorp;1203895.1]

                                       27


aggregate principal amount of the new Borrowings shall not exceed the aggregate
principal amount of the Loans being refinanced. Any Loan or part thereof so
refinanced shall be deemed to be repaid in accordance with Section 2.06 hereof
with the proceeds of a new Borrowing hereunder; PROVIDED, HOWEVER, that with
respect to any new Borrowing which results in any Bank extending a Loan in a
different princi pal amount than such Bank extended in the Loan being refinanced
(E.G., the refinancing of a Revolving Credit Loan with a Competitive Advance
Loan), (i) if the principal amount extended by a Bank in a refinancing is
greater than the principal amount extended by such Bank in the Borrowing being
refinanced, such Bank shall pay such difference to the Administrative Agent for
distribution to the Banks described in (ii) below, and (ii) if the principal
amount extended by a Bank in the Borrowing being refinanced is greater than the
principal amount being extended by such Bank in the refinancing, the
Administrative Agent shall return the difference to such Bank out of amounts
received pursuant to (i) above. If the Company shall not have repaid any
Revolving Credit Loan on the last day of the Interest Period with respect
thereto and shall not have given notice with respect to the refinancing of such
Loan in accordance with the applicable provisions of Section 2.01 or Section
2.02 hereof, as appropriate, it shall be deemed to have elected to refinance
such Loan with a Revolving Credit Loan which is an Alternate Base Rate Loan to
be made on the last day of the Interest Period of the Loan so refinanced.

     SECTION 2.08. FACILITY FEE. The Company agrees to pay to each Bank, through
the Administrative Agent, on each March 31, June 30, September 30 and December
31 (the first such payment to be made on December 31, 2000) and on the date on
which the Revolving Credit Commitment of such Bank shall be terminated or the
Maturity Date, whichever shall first occur, in immediately available funds, a
facility fee (a "FACILITY FEE") at a rate per annum equal to the Applicable
Facility Fee Percentage from time to time in effect on the average daily amount
of the Revolving Credit Commitment of such Bank, whether used or unused, during
the Calendar Quarter (or shorter period ending on December 31, 2000 or the
Maturity Date, as the case may be) then ended; PROVIDED, HOWEVER, that the
amount payable by the Company under this paragraph shall be reduced by any
amounts paid on account of the Facility Fees pursuant to Section 4.01 hereof.
All Facility Fees shall be computed on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be, and shall commence to
accrue on the Effective Date.

     SECTION 2.09. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES. (a) If after
the date of this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof (whether or not having the
force of law but with respect to which similarly situated banks generally
comply) (any such change, an "INCREASED COST CHANGE") (i) shall change the basis
of taxation of payments to any Bank of the principal of or interest on any
Eurodollar Loan, Term Federal Funds Loan, Certificate of Deposit Loan or Fixed
Rate Loan made by such Bank or any other fees or amounts payable hereunder
(other than (x) taxes imposed

[NYCorp;1203895.1]

                                       28


on the overall net income of such Bank by the jurisdiction in which such Bank
has its principal or lending office or by any political subdivision or taxing
authority therein (or any tax which is enacted or adopted by such jurisdiction,
political subdivision or taxing authority as a direct substitute for any such
taxes) or (y) any tax, assessment, or other governmental charge that would not
have been imposed but for the failure of any Bank to comply with any
certification, information, documentation, or other reporting requirement), or
(ii) shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, such Bank (except any such requirement reflected in the Base
CD Rate or the Certificate of Deposit Rate) or (iii) shall impose on such Bank
or on the London Interbank Market, the Certificate of Deposit market or the term
Federal funds market any other condition affecting this Agreement or any
Eurodollar Loan, Term Federal Funds Loan or Certificate of Deposit Loan made by
such Bank, and the result of any of the foregoing shall be to increase the cost
to such Bank of making or maintaining any Eurodollar Loan, Term Federal Funds
Loan or Certificate of Deposit Loan or to reduce the amount of any sum received
or receivable by such Bank hereunder (whether of principal, interest or
otherwise) in respect thereof by an amount deemed in good faith by such Bank to
be material, then, subject to Section 2.09(d) hereof, such additional amount or
amounts as will compensate such Bank for such increase or reduction will be paid
by the Company to such Bank as provided in Section 2.09(c) hereof. Any such
amount determined pursuant to this Section 2.09(a) shall be computed on the
basis of the net effect of any Increased Cost Changes incurred by such Bank from
time to time after the Effective Date of this Agreement.

     (b) If any Bank shall have determined in good faith that the adoption or
issuance, after the date of this Agreement, of any applicable law, rule,
regulation, guideline, request or directive regarding capital adequacy (whether
or not having the force of law but with respect to which similarly situated
banks generally comply) (a "CAPITAL ADEQUACY RULE"), or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof (any such adoption, issuance or change of a Capital
Adequacy Rule being called a "CAPITAL ADEQUACY CHANGE"), or compliance therewith
by any Bank (or any lending office of such Bank or any corporation controlling
such Bank), has the net effect of reducing the rate of return on such Bank's
capital as a consequence of its commitment to make, or the making or maintaining
of, any Loans hereunder to a level below that which such Bank (or any such
corporation controlling such Bank) would have achieved but for such adoption,
change or compliance (taking into consideration such Bank's policies with
respect to capital adequacy and any Capital Adequacy Rule in effect as of the
date of this Agreement) by an amount deemed by such Bank to be material, then
from time to time the Company shall, subject to Section 2.09(d) hereof, pay to
such Bank such additional amount or amounts as will compensate such Bank for
such reduction as provided in Section 2.09(c) hereof; PROVIDED, HOWEVER, that to
the extent (i) a Bank shall increase its level of capital above the level
maintained by such Bank on

[NYCorp;1203895.1]

                                       29


the date of this Agreement and there has not been a Capital Adequacy Change, or
(ii) there has been a Capital Adequacy Change and a Bank shall increase its
level of capital by an amount greater than the increase attributable (taking
into consideration the same variables taken into consideration in determining
the level of capital maintained by such Bank on the date of this Agreement) to
such Capital Adequacy Change, the Company shall not be required to pay any
amount or amounts under this Agreement with respect to any such increase in
capital. Thus, for example, a Bank which is "adequately capitalized" (as such
term or any similar term is used by any applicable bank regulatory agency having
authority with respect to such Bank) may not require the Company to make
payments in respect of increases in such Bank's level of capital made under the
circumstances described in clause (i) or (ii) above which improve its capital
position from "adequately capitalized" to "well capitalized" (as such term or
any similar term is used by any applicable bank regulatory agency having
authority with respect to such Bank).

     (c) A certificate of each Bank setting forth such amount or amounts as
shall be necessary to compensate such Bank (or Participant pursuant to Section
10.06(b) hereof) as specified in paragraph (a) or (b) of this Section 2.09, as
the case may be, shall be delivered to the Company at the end of each Calendar
Quarter during which such Bank is an Affected Bank and upon the taking by the
Company in respect of such Bank of one of the actions described in paragraph
(e)(ii) or (e)(iv) of this Section 2.09 and shall, if submitted in good faith,
be conclusive absent manifest error; PROVIDED that any certificate delivered by
a Bank pursuant to this Sec tion 2.09(c) shall (i) in the case of a certificate
in respect of amounts payable pursuant to paragraph (a) of this Section 2.09,
set forth in reasonable detail the basis for and the calculation of such
amounts, and (ii) in the case of a certificate in respect of amounts payable
pursuant to paragraph (b) of this Section 2.09, (A) set forth at least the same
amount of detail in respect of the calculation of such amount as such Bank
provides in similar circumstances to other similarly situated borrowers from
such Bank, and (B) include a statement by such Bank that it has allocated to its
Revolving Credit Commitment or outstanding Loans a proportionately equal amount
of any reduction of the rate of return on such Bank's capital due to a Capital
Adequacy Rule as it has allocated to each of its other commitments to lend or to
each of its other outstanding loans that are affected similarly by such Capital
Adequacy Rule. The Company shall pay each Bank the amount shown as due on any
such certificate upon the earlier of (i) the date on which the Company takes one
of the actions in respect of any such Bank described in paragraph (e)(ii) or
(e)(iv) of this Section 2.09 and (ii) 30 days after receipt by the Company of
such certificate.

     (d) Subject to the following provisions of this Section 2.09(d), failure on
the part of any Bank to demand compensation for any amounts payable pursuant to
para graphs (a) or (b) of this Section 2.09 with respect to any Interest Period
shall not constitute a waiver of such Bank's rights to demand compensation for
any such amounts with respect to any other Interest Period. In the case of any
Increased Cost Change which is given retroactive effect to a date prior to the
adoption thereof, a

[NYCorp;1203895.1]

                                       30


Bank shall be entitled to seek compensation in respect thereof pursuant to para
graph (a) of this Section 2.09 for the period commencing on such retroactive
effective date and ending on the date on which the Company takes one of the
actions in respect of such Bank described in paragraph (e)(ii) or (e)(iv) of
this Section 2.09; PROVIDED, HOWEVER, that (i) if such Bank shall fail to notify
the Company within 30 days after the date of official promulgation of such
Increased Cost Change that it will demand such compensation, the period for
which such Bank shall be entitled to seek compensation in respect thereof shall
commence on the date which is 30 days prior to such Bank's notice that it will
demand compensation, and (ii) if any Increased Cost Change is given retroactive
effect to a date which is more than three months prior to the date of adoption
thereof, the Company's liability to pay compensation to such Bank in respect
thereof for any period prior to the date which is three months prior to the
adoption thereof shall, subject to the foregoing clause (i) of this proviso, be
equal to 50% of the amount required to compensate such Bank in respect of such
Increased Cost Change with respect to such period. In the case of any Increased
Cost Change which is given only prospective effect, a Bank shall be entitled to
seek compensation in respect thereof pursuant to paragraph (a) of this Section
2.09 for the period commencing on the later of (A) the date on which such
Increased Cost Change becomes effective and (B) the date 30 days prior to the
notice by such Bank that it will demand such compensation, and ending on the
date on which the Company takes one of the actions in respect of such Bank
described in paragraph (e)(ii) or (e)(iv) of this Section 2.09. In the case of
any Capital Adequacy Change, a Bank shall be entitled to seek compensation in
respect thereof pursuant to paragraph (b) of this Section 2.09 only with respect
to costs or reductions commencing on the later of (A) the date on which such
Capital Adequacy Rule becomes effective and (B) the date 45 days prior to the
notice by such Bank that it will demand such compensation, and ending on the
date on which the Company takes one of the actions in respect of such Bank
described in paragraph (e)(ii) or (e)(iv) of this Section 2.09.

     (e) In the event that any Affected Bank shall have given notice that it is
entitled to claim compensation pursuant to this Section 2.09, the Company may
exercise any one or more of the following options:

          (i) If any such claim for compensation relates to Loans then being
     requested by the Company pursuant to a notice of Borrowing as provided in
     this Article II (or, in the case of claims for compensation pursuant to
     paragraph (g) of this Section 2.09, any such claim relates to Loans
     outstanding during the Interest Period most recently ended and the Company
     has requested Eurodollar Loans pursuant to such a notice of Borrowing), the
     Company may, not later than 12:00 noon, New York City time, on the day
     which is three (3) Business Days prior to the date on which the requested
     Loans were to have been made, in the case of Eurodollar Loans, or two (2)
     Business Days prior to the date on which the requested Loans were to have
     been made, in the case of Certificate of Deposit Loans, or not later than
     9:00 a.m., New York City time, on the date on which the requested Loans
     were to have been made, in the case of Term Federal Funds

[NYCorp;1203895.1]

                                       31


     Loans, Fixed Rate Loans or Alternate Base Rate Loans, by giving notice (by
     telephone (confirmed in writing promptly thereafter) or telecopier) to the
     Administrative Agent (which notice the Administrative Agent shall transmit
     to each of the Banks otherwise required to participate in the requested
     Loans as soon as practicable thereafter) irrevocably withdraw such notice
     of Borrowing.

         (ii) The Company may request one or more of the non-Affected Banks to
     take over all (but not part) of each or any Affected Bank's then
     outstanding Loan(s) and to assume all (but not part) of each or any
     Affected Bank's Revolving Credit Commitment and obligations hereunder. If
     one or more Banks shall so agree in writing (in this Section 2.09(e)(ii),
     in Section 2.13(c)(i) hereof, in Section 2.14(i) hereof and in Section
     4.03(b)(ii) hereof, collectively called the "ASSENTING BANKS" and
     individually called an "ASSENTING BANK") with respect to an Affected Bank,
     (x) the Revolving Credit Commitment of each Assenting Bank and the
     obligations of such Assenting Bank under this Agreement shall be increased
     by its respective Allocable Share of the Revolving Credit Commitment and of
     the obligations of such Affected Bank under this Agreement, and (y) each
     Assenting Bank shall make Loans to the Company, according to such Assenting
     Bank's respective Allocable Share, in an aggregate principal amount equal
     to the outstanding principal amount of the Loan(s) of such Affected Bank,
     on a date mutually acceptable to the Assenting Banks and the Company. The
     proceeds of such Loans, together with funds of the Company, shall be used
     to prepay the Loan(s) of such Affected Bank, together with all interest
     accrued thereon and all other amounts owing to such Affected Bank hereunder
     (including any amounts payable pursuant to Section 3.04 hereof in
     connection with such prepayment), and, upon such assumption by the
     Assenting Bank and prepayment by the Company, such Affected Bank shall
     cease to be a "Bank" for purposes of this Agreement and shall no longer
     have any obligations hereunder (except as provided in Section 2.13(b),
     Section 10.02 and Section 10.07 hereof).

         (iii) Upon notice (by telephone (confirmed in writing promptly
     thereafter) or telecopier) to the Administrative Agent (which shall advise
     each Bank thereof as soon as practicable thereafter), the Company may
     terminate the obligations of the Banks to make or maintain Loans which
     result in the Affected Banks making a demand for compensation pursuant to
     this Section 2.09 and, in such event, the Company shall refinance all such
     Loans with Loans which, at the time of such refinancing, would not result
     in such Banks making such demand for compensation, such refinancing to be
     conducted in the manner contemplated by and pursuant to Section 2.07 or
     Section 4.02 hereof.

         (iv) (A) The Company may designate one or more Replacement Lenders
     mutually acceptable to the Company and the Administrative Agent (whose
     consent shall not be unreasonably withheld) to assume the Revolving Credit
     Commitment and the obligations of any such Affected Bank hereunder, and to
     purchase the outstanding Notes of such Affected Bank and such Affected
     Bank's

[NYCorp;1203895.1]

                                       32


     rights hereunder and with respect thereto, without recourse upon, or
     warranty by, or expense to, such Affected Bank, for a purchase price equal
     to the outstanding principal amount of the Loan(s) of such Affected Bank
     plus all interest accrued and unpaid thereon and all other amounts owing to
     such Affected Bank hereunder (including the amount which would be payable
     to such Affected Bank pursuant to Section 3.04 hereof if the purchase of
     its Notes constituted a prepayment thereof contemplated by clause (ii) of
     the first sentence of Section 3.04 hereof), and upon such assumption and
     purchase by the Replacement Lenders, each such Replacement Lender shall be
     deemed to be a "Bank" for purposes of this Agreement and such Affected Bank
     shall cease to be a "Bank" for purposes of this Agreement and shall no
     longer have any obligations hereunder (except as provided in Section
     2.13(b), Section 10.02 and Section 10.07 hereof).

         (B) As an alternative, the Company may designate one or more
     Replacement Lenders mutually acceptable to the Company and the
     Administrative Agent (whose consent shall not be unreasonably withheld)
     which shall upon a date mutually agreed upon by the Company and such
     Replacement Lenders assume the Revolving Credit Commitment and the
     obligations of such Affected Bank under this Agreement and shall upon such
     date make Loans to the Company in an aggregate principal amount equal to
     the outstanding principal amount of the Loan(s) of such Affected Bank. The
     proceeds of such Loans, together with funds of the Company, shall be used
     to prepay the Loan(s) of such Affected Bank, together with all interest
     accrued thereon and all other amounts owing to such Affected Bank hereunder
     (including any amounts payable pursuant to Section 3.04 hereof in
     connection with such prepayment), and, upon such Replacement Lenders making
     such Loans and such prepayment by the Company, such Replacement Lenders
     shall be deemed to be "Banks" for purposes of this Agreement and such
     Affected Bank shall cease to be a "Bank" for purposes of this Agreement and
     shall no longer have any obligations hereunder (except as provided in
     Section 2.13(b), Section 10.02 and Section 10.07 hereof). Each such
     Replacement Lender shall execute and deliver to the Administrative Agent
     such documentation to evidence its status as a "Bank" hereunder as shall be
     mutually acceptable to the Company and the Administrative Agent. The
     effectiveness of each Replacement Lender's Revolving Credit Commitment, the
     making of such Loans by such Replacement Lenders and the prepayment by the
     Company of the Loan(s) of such Affected Bank shall be deemed to have
     occurred simultaneously for all purposes hereof.

     (f) If in respect of any Interest Period for a Eurodollar Loan made by a
Bank under Section 2.01 hereof such Bank shall be required to maintain reserves
against "Eurocurrency liabilities" under Regulation D, the Company shall pay to
such Bank in accordance with this Section 2.09(f) an additional amount
representing such Bank's actual costs, if any, incurred during such Interest
Period as a result of the applicability of the foregoing reserves to such
Eurodollar Loan, which amount (i) shall be based on the effective rate at which
such reserve requirements are

[NYCorp;1203895.1]

                                       33


imposed on such Bank for such Interest Period, (ii) shall be allocated to the
Company in no proportionately greater amount than such Bank would allocate such
costs to its other borrowers of Eurodollars to which such costs are applicable
if the provisions of this Section 2.09(f) applied to all such borrowers, and
(iii) in any event shall not exceed the product of the following for each day of
such Interest Period:

         (A) the principal amount of the Eurodollar Loan outstanding on such day
     made by such Bank to which such Interest Period relates; and

         (B) a percentage equal to (x) the result obtained by dividing the
     Eurodollar Rate applicable to such Eurodollar Loan by the number one minus
     the maximum rate (expressed as a decimal) at which such reserve
     requirements are imposed by the Board on such date, minus (y) the
     Eurodollar Rate applicable to such Eurodollar Loan; and

         (C) a fraction the numerator of which is one and the denominator of
     which is 360.

To be entitled to compensation pursuant to this Section 2.09(f) in respect of
any Interest Period, such Bank must notify the Company of its demand for such
compensation within 30 days after the end of such Interest Period. A certificate
of such Bank setting forth in reasonable detail the basis for and the
calculation of such amount necessary to compensate such Bank pursuant to this
Section 2.09(f) shall be delivered to the Company with such notice and shall be
conclusive absent manifest error. In no event shall the Company be obligated to
make any payment to any Bank pursuant to this Section 2.09(f) if such payment
would result in a duplication of payments pursuant to this Section 2.09(f) and
any other provision of this Section 2.09.

     (g) In the event that any Affected Bank shall have given notice that it is
entitled to claim compensation pursuant to paragraph (f) of this Section 2.09,
the Company may exercise any one or more of the options set forth in Section
2.09(e) hereof.

     (h) In the event that the Company shall take any of the actions
contemplated by Section 2.09(e)(ii) or Section 2.09(e)(iv) hereof, the Company
shall provide replacement Notes to any Assenting Bank or any Replacement Lender,
as the case may be, to reflect the identity of, and/or the outstanding amount of
the Loans of, and/or the principal amount of such Notes issued to, such
Assenting Bank or such Replacement Lender, and Schedule I and Schedule II hereto
shall be deemed amended to reflect the addition of such Replacement Lender and
any increases or decreases in the Revolving Credit Commitments of the Affected
Banks and the Assenting Banks, as the case may be.

     SECTION 2.10. PRO RATA TREATMENT. Except as permitted under Section 2.07,
Section 2.09, Section 2.13, Section 2.14 and Section 4.03 hereof, (i) each
payment

[NYCorp;1203895.1]

                                       34


by the Company on account of any fees pursuant to Section 2.08 hereof shall be
made PRO RATA in accordance with the respective amounts due and owing, (ii) each
payment by the Company on account of principal of and interest on the Loans
shall be made PRO RATA according to the respective amounts due and owing, and
(iii) each prepayment on account of principal of the Loans shall be applied to
the Revolving Credit Loans and the Competitive Loans, as directed by the
Company, PRO RATA according to the respective amounts outstanding.

     SECTION 2.11. PAYMENTS. Except for payments made directly to a Bank or
Banks under other provisions of this Agreement, the Company shall make each
payment hereunder and under any instrument delivered hereunder not later than
12:00 noon (New York City time) on the day when due, in Dollars, to the
Administrative Agent at its offices at One Liberty Plaza, New York, New York
10006, for the account of the Banks, in immediately available funds. The
Administrative Agent shall promptly distribute to each Bank its proper share of
each payment so received.

     SECTION 2.12. PAYMENTS ON BUSINESS DAYS. Whenever any payment to be made
hereunder shall be due on a day which is not a Business Day, then such payment
shall be made on the next succeeding Business Day (unless, with respect to a
payment relating to a Eurodollar Loan, such day would fall in another calendar
month, in which event payment shall be made on the next preceding Business Day).

     SECTION 2.13. NET PAYMENTS. (a) All payments under this Agreement shall be
made without setoff or counterclaim and in such amounts as may be necessary in
order that all such payments (after deduction or withholding for or on account
of any present or future taxes, levies, imposts, duties or other charges of
whatsoever nature imposed by any government or any political subdivision or
taxing authority thereof (herein collectively called the "Taxes") other than any
Taxes on or measured by the net income, net worth or shareholders' capital of a
Bank or a Participant pursuant to the income tax laws of the jurisdiction where
such Bank's principal or lending office is located or where such Participant's
principal or participating office is located) shall not be less than the amounts
otherwise specified to be paid under this Agreement and the Notes; PROVIDED that
if any Bank or any Participant fails to comply with the applicable provisions of
Section 10.06(g) hereof or paragraph (b) of this Section 2.13, as the case may
be, then, all such payments to such Bank or to any Bank which has sold a
participation pursuant to Section 10.06(b) hereof shall be net of any amounts
the Company is required to withhold under applicable law. For a Bank to be
entitled to compensation pursuant to this Section 2.13 (i) in the case of
compensation for United States Federal income or withholding Taxes in respect of
any Interest Period, such Bank must notify the Company within 30 days after the
end of such Interest Period and (ii) in the case of compensation for any United
States Tax other than a United States Federal income or withholding Tax in
respect of any Interest Period, such Bank must notify the Company within 30 days
after such Bank receives a written claim for such Tax from any government,
political subdivision or taxing

[NYCorp;1203895.1]

                                       35


authority with respect to such Interest Period. A certificate as to any
additional amounts payable to any Bank under this Section 2.13 submitted to the
Company by such Bank shall show in reasonable detail the amount payable and the
calculations used to determine such amount and shall be conclusive and binding
upon the parties hereto, in the absence of manifest error. With respect to each
deduction or withholding for or on account of any Taxes, the Company shall
promptly (and in any event not later than 45 days thereafter) furnish to each
Bank such certificates, receipts and other documents as may be required (in the
reasonable judgment of such Bank) to establish any tax credit to which such Bank
may be entitled.

     (b) Each Bank that is not incorporated under the laws of the United States
or any State thereof agrees to file with the Administrative Agent and the
Company, in duplicate, (i) on or before the later of (A) the Effective Date and
(B) the date such Bank becomes a Bank under this Agreement and (ii) thereafter,
for each third taxable year of such Bank during which interest or fees arising
under this Agreement are received, unless not legally able to do so as a result
of a change in United States income tax law enacted, or treaty promulgated,
after the date specified in the preceding clause (i), on or prior to the
immediately following due date of any payment by the Company hereunder (or at
any other time as required under United States income tax law), a properly
completed and executed copy of either Internal Revenue Service Form W-8BEN or
Internal Revenue Service Form W-8ECI or Internal Revenue Service Form W-9 and
any additional form necessary for claiming complete exemption from United States
withholding taxes (or such other form as is required to claim complete exemption
from United States withholding taxes), if and as provided by the Code,
regulations or other pronouncements of the United States Internal Revenue
Service, and the Bank warrants to the Company that the form so filed will be
true and complete; PROVIDED that such Bank's failure to complete and execute
such Form W-8BEN, or Form W-8ECI or Form W-9, as the case may be, and any such
additional form (or any successor form or forms) shall not relieve the Company
of any of its obligations under this Agreement, except as otherwise provided in
this Section 2.13. In the event that the Company is required, or has been
notified by the relevant taxing authority that it will be required, to either
withhold or make payment of Taxes with respect to any payments to be made by the
Company under this Agreement or the Notes to any transferor Bank and such
requirement or notice arises as a result of the sale of a participation by such
transferor Bank pursuant to Section 10.06(b) hereof, such transferor Bank shall,
upon request by the Company, accompanied by a certificate setting forth in
reasonable detail the basis for such request, provide to the Company copies of
all tax forms required to be provided to such transferor Bank pursuant to
Section 10.06(g) hereof by the Participant which purchased such participation.
The obligation of each transferor Bank to provide to the Company such tax forms
shall survive the termination of this Agreement or, if earlier, the termination
of the Revolving Credit Commitment of such transferor Bank.

[NYCorp;1203895.1]

                                       35


     (c) In the event that any Affected Bank shall have given notice that it is
entitled to claim compensation pursuant to this Section 2.13, the Company may at
any time thereafter exercise any one or more of the following options:

         (i) The Company may request one or more of the non-Affected Banks to
     take over all (but not part) of each or any Affected Bank's then
     outstanding Loan(s) and to assume all (but not part) of each or any
     Affected Bank's Revolving Credit Commitment and obligations hereunder. If
     one or more Banks shall so agree in writing with respect to an Affected
     Bank, (x) the Revolving Credit Commitment of each Assenting Bank and the
     obligations of such Assenting Bank under this Agreement shall be increased
     by its respective Allocable Share of the Revolving Credit Commitment and of
     the obligations of such Affected Bank under this Agreement, and (y) each
     Assenting Bank shall make Loans to the Company, according to such Assenting
     Bank's respective Allocable Share, in an aggregate principal amount equal
     to the outstanding principal amount of the Loan(s) of such Affected Bank,
     on a date mutually acceptable to the Assenting Banks and the Company. The
     proceeds of such Loans, together with funds of the Company, shall be used
     to prepay the Loan(s) of such Affected Bank, together with all interest
     accrued thereon, and all other amounts owing to such Affected Bank
     hereunder (including any amounts payable pursuant to Section 3.04 hereof in
     connection with such prepayment), and, upon such assumption by the
     Assenting Banks and prepayment by the Company, such Affected Bank shall
     cease to be a "Bank" for purposes of this Agreement and shall no longer
     have any obligations hereunder (except as provided in Section 2.13(b),
     Section 10.02 and Section 10.07 hereof).

          (ii) (A) The Company may designate one or more Replacement Lenders
     mutually acceptable to the Company and the Administrative Agent (whose
     consent shall not be unreasonably withheld) to assume the Revolving Credit
     Commitment and the obligations of any such Affected Bank hereunder, and to
     purchase the outstanding Notes of such Affected Bank and such Affected
     Bank's rights hereunder and with respect thereto, without recourse upon, or
     warranty by, or expense to, such Affected Bank, for a purchase price equal
     to the outstanding principal amount of the Loan(s) of such Affected Bank
     plus all interest accrued thereon and all other amounts owing to such
     Affected Bank hereunder (including the amount which would be payable to
     such Affected Bank pursuant to Section 3.04 hereof if the purchase of its
     Notes constituted a prepayment thereof contemplated by clause (ii) of the
     first sentence of Section 3.04 hereof), and upon such assumption and
     purchase by the Replacement Lenders, each such Replacement Lender shall be
     declared to be a "Bank" for purposes of this Agreement and such Affected
     Bank shall cease to be a "Bank" for purposes of this Agreement and shall no
     longer have any obligations hereunder (except as provided in Section
     2.13(b), Section 10.02 and Section 10.07 hereof).

[NYCorp;1203895.1]

                                       37


         (B) As an alternative, the Company may designate one or more
     Replacement Lenders mutually acceptable to the Company and the
     Administrative Agent (whose consent shall not be unreasonably withheld)
     which shall upon a date mutually agreed upon by the Company and such
     Replacement Lenders assume the Revolving Credit Commitment and the
     obligations of such Affected Bank under this Agreement and shall upon such
     date make Loans to the Company in an aggregate principal amount equal to
     the outstanding principal amount of the Loan(s) of such Affected Bank. The
     proceeds of such Loans, together with funds of the Company, shall be used
     to prepay the Loan(s) of such Affected Bank, together with all interest
     accrued thereon and all other amounts owing to such Affected Bank hereunder
     (including any amounts payable pursuant to Section 3.04 hereof in
     connection with such prepayment), and, upon such Replacement Lenders making
     such Loans and such prepayment by the Company, such Replacement Lenders
     shall be deemed to be "Banks" for purposes of this Agreement and such
     Affected Bank shall cease to be a "Bank" for purposes of this Agreement and
     shall no longer have any obligations hereunder (except as provided in
     Section 2.13(b), Section 10.02 and Section 10.07 hereof). Each such
     Replacement Lender shall execute and deliver to the Administrative Agent
     such documentation to evidence its status as a "Bank" hereunder as shall be
     mutually acceptable to the Company and the Administrative Agent. The
     effectiveness of each Replacement Lender's Revolving Credit Commitment, the
     making of such Loans by such Replacement Lenders and the prepayment by the
     Company of the Loan(s) of such Affected Bank shall be deemed to have
     occurred simultaneously for all purposes hereof.

         (iii) If any such claim for compensation relates to Loans then being
     requested by the Company pursuant to a notice of Borrowing as provided in
     Article II hereof, the Company may, not later than 12:00 noon, New York
     City time, on the day which is three (3) Business Days prior to the date on
     which the requested Loans were to have been made, in the case of Eurodollar
     Loans, or two (2) Business Days prior to the date on which the requested
     Loans were to have been made, in the case of Certificate of Deposit Loans,
     or not later than 9:00 a.m., New York City time, on the date on which the
     requested Loans were to have been made, in the case of Term Federal Funds
     Loans, Fixed Rate Loans or Alternate Base Rate Loans, by giving notice (by
     telephone (confirmed in writing promptly thereafter) or telecopier) to the
     Administrative Agent (which notice the Administrative Agent shall transmit
     to each of the Banks otherwise required to participate in the requested
     Loans as soon as practicable thereafter) irrevocably withdraw such notice
     of Borrowing.

     (d) The Company shall provide replacement Notes to any Assenting Bank or
any Replacement Lender, as the case may be, to reflect the identity of, and/or
the outstanding amount of the Loans of, and/or the principal amount of such
Notes issued to, such Assenting Bank or such Replacement Lender, and Schedule I
and Schedule II hereto shall be deemed amended to reflect the addition of such
Replacement Lender

[NYCorp;1203895.1]

                                       38


and any increases or decreases in the Revolving Credit Commitments of the
Affected Banks and the Assenting Banks, as the case may be.

     SECTION 2.14. FAILED AND CREDIT-IMPAIRED BANKS. If (a) a Bank shall be
adjudged a bankrupt or insolvent, or if a receiver of a Bank or of its property
shall be appointed, or if any public officer shall take charge or control of a
Bank or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, or if a Bank shall default in respect of its
obligation to make Loans hereunder, (b) any of Moody's, S&P or Thomson
BankWatch, Inc. shall assign a rating to the senior, unsecured,
non-credit-enhanced, long-term indebtedness for borrowed money of a Bank which
shall be classified by such rating agency as below investment grade, or, in the
case of Thomson BankWatch, Inc., such rating shall be below C/D, or (c) the
Company shall deliver to the Administrative Agent a notice stating that, as to
any Bank which has senior, unsecured, non-credit-enhanced, long-term
indebtedness for borrowed money which is not rated by any of the rating agencies
referred to in the preceding clause (b), that it reasonably believes such Bank
will become subject to any of the events referred to in clause (a) above or
become unable to perform its obligations as a Bank hereunder, then the Company
may at any time thereafter, subject to applicable law, exercise any one or more
of the following options:

         (i) The Company may request one or more of the non-Affected Banks to
     take over all (but not part) of each or any Affected Bank's then
     outstanding Loan(s) and to assume all (but not part) of each or any
     Affected Bank's Revolving Credit Commitment and obligations hereunder. If
     one or more Banks shall so agree in writing with respect to an Affected
     Bank, (x) the Revolving Credit Commitment of each Assenting Bank and the
     obligations of such Assenting Bank under this Agreement shall be increased
     by its respective Allocable Share of the Revolving Credit Commitment and of
     the obligations of such Affected Bank under this Agreement, and (y) each
     Assenting Bank shall make Loans to the Company, according to such Assenting
     Bank's respective Allocable Share, in an aggregate principal amount equal
     to the outstanding principal amount of the Loan(s) of such Affected Bank,
     on a date mutually acceptable to the Assenting Banks and the Company. The
     proceeds of such Loans, together with funds of the Company, shall be used
     to prepay the Loan(s) of such Affected Bank, together with all interest
     accrued thereon and all other amounts owing to such Affected Bank hereunder
     (excluding, in the case of an event referred to in clause (a) of Section
     2.14, any amounts payable pursuant to Section 3.04 hereof in connection
     with such prepayment), and, upon such assumption by the Assenting Bank and
     prepayment by the Company, such Affected Bank shall cease to be a "Bank"
     for purposes of this Agreement and shall no longer have any obligations
     hereunder (except as provided in Section 2.13(b), Section 10.02 and Section
     10.07 hereof).

         (ii) (A) The Company may designate one or more Replacement Lenders
     mutually acceptable to the Company and the Administrative Agent (whose
     consent shall not be unreasonably withheld) to assume the Revolving Credit

[NYCorp;1203895.1]

                                       39


     Commitment and the obligations of any such Affected Bank hereunder, and to
     purchase the outstanding Notes of such Affected Bank and such Affected
     Bank's rights hereunder and with respect thereto, without recourse upon, or
     warranty by, or expense to, such Affected Bank, for a purchase price equal
     to the outstanding principal amount of the Loan(s) of such Affected Bank
     plus all interest accrued and unpaid thereon and all other amounts owing to
     such Affected Bank hereunder (including the amount which would be payable
     to such Affected Bank pursuant to Section 3.04 hereof if the purchase of
     its Notes constituted a prepayment thereof contemplated by clause (ii) of
     the first sentence of Section 3.04 hereof), and upon such assumption and
     purchase by the Replacement Lenders, each such Replacement Lender shall be
     deemed to be a "Bank" for purposes of this Agreement and such Affected Bank
     shall cease to be a "Bank" for purposes of this Agreement and shall no
     longer have any obligations hereunder (except as provided in Section
     2.13(b), Section 10.02 and Section 10.07 hereof).

         (B) As an alternative, the Company may designate one or more
     Replacement Lenders mutually acceptable to the Company and the
     Administrative Agent (whose consent shall not be unreasonably withheld)
     which shall upon a date mutually agreed upon by the Company and such
     Replacement Lenders assume the Revolving Credit Commitment and the
     obligations of such Affected Bank under this Agreement and shall upon such
     date make Loans to the Company in an aggregate principal amount equal to
     the outstanding principal amount of the Loan(s) of such Affected Bank. The
     proceeds of such Loans, together with funds of the Company, shall be used
     to prepay the Loan(s) of such Affected Bank, together with all interest
     accrued thereon and all other amounts owing to such Affected Bank hereunder
     (including any amounts payable pursuant to Section 3.04 hereof in
     connection with such prepayment), and, upon such Replacement Lenders making
     such Loans and such prepayment by the Company, such Replacement Lenders
     shall be deemed to be "Banks" for purposes of this Agreement and such
     Affected Bank shall cease to be a "Bank" for purposes of this Agreement and
     shall no longer have any obligations hereunder (except as provided in
     Section 2.13(b), Section 10.02 and Section 10.07 hereof). Each such
     Replacement Lender shall execute and deliver to the Administrative Agent
     such documentation to evidence its status as a "Bank" hereunder as shall be
     mutually acceptable to the Company and the Administrative Agent. The
     effectiveness of each Replacement Lender's Revolving Credit Commitment, the
     making of such Loans by such Replacement Lenders and the prepayment by the
     Company of the Loan(s) of such Affected Bank shall be deemed to have
     occurred simultaneously for all purposes hereof.

     The Company shall provide replacement Notes to any Assenting Bank or any
Replacement Lender, as the case may be, to reflect the identity of, and/or the
outstanding amount of the Loans of, and/or the principal amount of such Notes
issued to, such Assenting Bank or such Replacement Lender, and Schedule I and
Schedule II hereto shall be deemed amended to reflect the addition of such
Replacement Lender

[NYCorp;1203895.1]

                                       40


and any increases or decreases in the Revolving Credit Commitments of the
Affected Banks and the Assenting Banks, as the case may be.


                                   ARTICLE III

                               INTEREST PROVISIONS

     SECTION 3.01. INTEREST ON LOANS. (a) Subject to the provisions of Section
3.02 hereof, each Eurodollar Loan shall bear interest at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 360
days) equal to the Eurodollar Rate for the Interest Period in effect for such
Loan plus (i) in the case of each Competitive Loan, the Margin specified by a
Bank with respect to such Loan in its Competitive Bid submitted pursuant to
Section 2.02(c) hereof, and (ii) in the case of each Revolving Credit Loan, the
Applicable Margin. Interest on each Eurodollar Loan shall be payable on each
Interest Payment Date applicable thereto.

     (b) Subject to the provisions of Section 3.02 hereof, each Certificate of
Deposit Loan shall bear interest at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 360 days) equal to the
Certificate of Deposit Rate for the Interest Period in effect for such Loan plus
(i) in the case of each Competitive Loan, the Margin specified by a Bank with
respect to such Loan in its Competitive Bid submitted pursuant to Section
2.02(c) hereof, and (ii) in the case of each Revolving Credit Loan, the
Applicable Margin. Interest on each Certificate of Deposit Loan shall be payable
on each Interest Payment Date applicable thereto.

     (c) Subject to the provisions of Section 3.02 hereof, each Alternate Base
Rate Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed (i) over a year of 365 or 366 days, as the case
may be, if the Alternate Base Rate is based on the Prime Rate, and (ii) over a
year of 360 days if the Alternate Base Rate is based on the Base CD Rate or the
Federal Funds Effective Rate) equal to the Alternate Base Rate plus the
Applicable Margin. Interest on each Alternate Base Rate Loan shall be payable on
each Interest Payment Date applicable thereto.

     (d) Subject to the provisions of Section 3.02 hereof, each Fixed Rate Loan
shall bear interest at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to the fixed rate of
interest offered by the Competitive Bid Bank making such Loan and accepted by
the Company pursuant to Section 2.02 hereof. Interest on each Fixed Rate Loan
shall be payable on each Interest Payment Date applicable thereto.

     (e) Subject to the provisions of Section 3.02 hereof, each Term Federal
Funds Loan shall bear interest at a rate per annum (computed on the basis of the
actual

[NYCorp;1203895.1]

                                       41


number of days elapsed over a year of 360 days) equal to the Term Federal Funds
Rate for the Interest Period in effect for such Loan plus the Applicable Margin.
Interest on each Term Federal Funds Loan shall be payable on each Interest
Payment Date applicable thereto.

     (f) Interest on each Loan shall accrue from and including the first day of
the Interest Period with respect to such Loan to but excluding the last day of
such Interest Period.

     SECTION 3.02. INTEREST ON OVERDUE AMOUNTS. If the Company shall default in
the payment when due of the principal of any Loan or of any other amount due
hereunder (other than any amount not paid as a result of a Bank Funding Default
for the period from which such Bank Funding Default commences to the date on
which the failure to pay such amount due would become an Event of Default), the
Company shall on demand from time to time pay interest, to the extent permitted
by law, on such defaulted amount from the date such amount shall have become due
up to (but not including) the date of actual payment thereof (x) for other than
Eurodollar Loans, accruing on a daily basis, at a rate per annum (computed on
the basis of a year of 365 or 366 days, as the case may be, if the Alternate
Base Rate is based on the Prime Rate or on the basis of a year of 360 days if
the Alternate Base Rate is based on the Base CD Rate or the Federal Funds
Effective Rate) which is equal to the sum of (i) the Alternate Base Rate from
time to time in effect, plus (ii) the Applicable Margin plus (iii) two percent
(2%) per annum, or (y) for Eurodollar Loans, accruing on a daily basis at a rate
per annum (computed on the basis of a year of 360 days) which is two and
one-half percent (2-1/2%) per annum in excess of the rate determined by the
Administrative Agent two (2) Business Days prior to the beginning of periods of
one day, one week, one month, two months or three months (as the Administrative
Agent shall select in its sole discretion from time to time during the
continuation of such default), the first of which periods shall commence on the
date such amount shall have become due, as the rate at which the Administrative
Agent is offered deposits in Dollars as of 11:00 a.m., London time, by prime
banks in the London Interbank Eurodollar market for delivery on the first day of
any such period and for the approximate number of days comprised therein, in an
amount comparable to the aggregate amount due. If the Company shall default in
the payment when due of the principal of any Loan or of any other amount due
hereunder as a result of a Bank Funding Default, for the period from which such
Bank Funding Default commences to the date on which the failure to pay such
amount due would become an Event of Default or, if earlier, to (but not
including) the date of actual payment thereof, the Company shall on demand from
time to time pay interest, to the extent permitted by law, on such defaulted
amount at a rate per annum equal to (x) for other than Eurodollar Loans, the
Alternate Base Rate (computed on the basis of a year of 365 or 366 days, as the
case may be, if the Alternate Base Rate is based on the Prime Rate or on the
basis of a year of 360 days if the Alternate Base Rate is based on the Base CD
Rate or the Federal Funds Effective Rate), or (y) for any Eurodollar Loan, until
the last day of the Interest Period therefor, at the Interest Rate applicable to
such

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                                       42


Eurodollar Loan determined in accordance with the provisions of Section 3.01(a)
hereof, and thereafter, in accordance with clause (x) above; PROVIDED, HOWEVER,
that interest payable by the Company for the period set forth above on defaulted
amounts not paid to a Bank as a result of such Bank's Bank Funding Default shall
be payable at a rate per annum equal to the lesser of (i) the Interest Rate that
would have been applicable to the Loan or Loans that were the subject of such
Bank's Bank Funding Default, and (ii) the applicable Interest Rate set forth in
clause (x) or (y) above, as the case may be.

     SECTION 3.03. INABILITY TO DETERMINE CERTIFICATE OF DEPOSIT RATE, TERM
FEDERAL FUNDS RATE OR EURODOLLAR RATE. (a) In the event, and on each occasion,
that the Company has accepted a Competitive Bid with respect to a Certificate of
Deposit Loan and, on or before the date on which the Certificate of Deposit Rate
for the Interest Period relating to such Loan is to be determined, the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the parties hereto in the absence of manifest error)
that such Certificate of Deposit Rate cannot be determined as a result of the
inability of the Reference Banks to obtain sufficient bids in accordance with
the terms of the definition of Fixed Certificate of Deposit Rate, the
Administrative Agent shall immediately give notice of such determination by
telephone (confirmed by telecopier) to the Company and the Competitive Bid Bank
which submitted such Competitive Bid. In the event of any such determination,
(i) any such request by the Company for a Competitive Bid with respect to a
Certificate of Deposit Loan shall be deemed to be a request for an Alternate
Base Rate Loan, and (ii) the Company may, not later than 9:00 a.m., New York
City time, on the date on which such Loans were to have been made, by giving
notice (by telephone (confirmed in writing promptly thereafter) or telecopier)
to the Administrative Agent (which notice the Administrative Agent shall
transmit to each of the Banks as soon as practicable thereafter) irrevocably
withdraw such notice of Borrowing. Each such determination shall be conclusive
and binding upon the parties hereto in the absence of manifest error.

     (b) In the event, and on each occasion, that the Company has submitted a
Revolving Credit Borrowing Request for a Certificate of Deposit Loan or a Term
Federal Funds Loan and, on or before the date on which the Certificate of
Deposit Rate or Term Federal Funds Rate, as the case may be, for such Loan is to
be determined, the Administrative Agent shall have determined that such
Certificate of Deposit Rate or Term Federal Funds Rate, as the case may be,
cannot be determined as a result of the inability of the Reference Banks to
obtain sufficient bids or quotations, respectively, in accordance with the terms
of the definition of Fixed Certificate of Deposit Rate or Term Federal Funds
Rate, as the case may be, or the Required Banks shall determine that the
Certificate of Deposit Rate or Term Federal Funds Rate, as the case may be, for
such Loan will not adequately and fairly reflect the cost to such Banks of
making or maintaining such Loan during such Interest Period, the Administrative
Agent, or, as the case may be, the Required Banks, acting through the
Administrative Agent, shall forthwith give notice thereof (by telephone

[NYCorp;1203895.1]

                                       43


(confirmed in writing promptly thereafter) or telecopier) to the Company. In the
event of any such determination, (i) any such request by the Company for a
Certificate of Deposit Loan or Term Federal Funds Loan, as the case may be,
shall be deemed to be a request for an Alternate Base Rate Loan, and (ii) the
Company may, not later than 9:00 a.m., New York City time, on the date on which
such Loans were to have been made, by giving notice (by telephone (confirmed in
writing promptly thereafter) or telecopier) to the Administrative Agent (which
notice the Administrative Agent shall transmit to each of the Banks as soon as
practicable thereafter) irrevocably withdraw such notice of Borrowing. Each such
determination shall be conclusive and binding upon the parties hereto in the
absence of manifest error.

     (c) In the event, and on each occasion, that the Company has accepted a
Competitive Bid with respect to a Eurodollar Loan and, on or before the date on
which the Eurodollar Rate for the Interest Period relating to such Loan is to be
determined, the Administrative Agent shall have determined that by reason of
circumstances affecting the London Interbank Eurodollar market or affecting the
position of any Reference Bank in such market, adequate and fair means do not
exist for ascertaining the Interest Rate applicable to such Loan during such
Interest Period, then, and in any such event, the Competitive Bid Request
submitted by the Company with respect to such Loan and the Competitive Bid
submitted by the Competitive Bid Bank and accepted by the Company with respect
to such Loan shall both be deemed to be rescinded and of no force and effect
whatsoever. The Administrative Agent shall immediately give notice of such
determination by telephone (confirmed by telecopier) to the Company and to such
Competitive Bid Bank. Each such determination by the Administrative Agent shall
be conclusive and binding upon the parties hereto in the absence of manifest
error.

     (d) In the event, and on each occasion, that the Company has submitted a
Revolving Credit Borrowing Request for a Eurodollar Loan and, on or before the
date on which the Eurodollar Rate for the Interest Period relating to such Loan
is to be determined, the Administrative Agent shall have determined that by
reason of circumstances affecting the London Interbank Eurodollar market or
affecting the position of any Reference Bank in such market, adequate and fair
means do not exist for ascertaining the Interest Rate applicable to such Loan
during such Interest Period, then, and in any such event, such Revolving Credit
Borrowing Request shall be deemed to be rescinded and of no force and effect
whatsoever. The Administrative Agent shall immediately give notice of such
determination by telephone (confirmed by telecopier) to the Company and the
Banks. Each such determination by the Administrative Agent shall be conclusive
and binding upon the parties hereto in the absence of manifest error.

     SECTION 3.04. INDEMNITY. The Company shall compensate each Bank, upon
written request by such Bank (which request shall set forth the basis for
requesting such amounts), for all reasonable losses and expenses in respect of
any interest paid

[NYCorp;1203895.1]

                                       44


by such Bank (or its lending branch or affiliate) to lenders of funds borrowed
by it or deposited with it to make or maintain its Loans (other than Alternate
Base Rate Loans) which such Bank (or its lending branch or affiliate) may
sustain, to the extent not otherwise compensated for hereunder and not mitigated
by the reemployment of such funds: (i) if for any reason (other than a default
by such Bank) a Borrowing of any Loan does not occur on a date specified
therefor in a notice of Borrowing given pursuant to Article II hereof, (ii) if
any prepayment (other than a prepayment under Section 2.14(i) resulting from an
event referred to in clause (a) of Section 2.14 hereof) or repayment of its
Loans (other than Alternate Base Rate Loans) occurs on a date which is not the
expiration date of the relevant Interest Period, (iii) if any prepayment of its
Loans (other than Alternate Base Rate Loans) is not made on any date specified
in a notice of prepayment given by the Company (regardless of whether such
notice may be revoked under Section 4.01 and is revoked in accordance
therewith), or (iv) as a consequence of any default by the Company under this
Agreement. Without prejudice to the foregoing, the Company shall indemnify each
Bank against any loss or expense which such Bank (or its lending branch or
affiliate) may sustain or incur as a consequence of the default by the Company
in payment of principal of or interest on any Loan (other than any Alternate
Base Rate Loan), or any part thereof, or of any amount due under this Agreement,
including, but not limited to, any premium or penalty incurred by such Bank (or
its lending branch or affiliate), in respect of funds borrowed by it or
deposited with it for the purpose of making or maintaining such Loan (other than
any Alternate Base Rate Loan), as determined by such Bank in the exercise of its
sole discretion. A certificate as to any such loss or expense (including
calculations, in reasonable detail, showing how such Bank computed such loss or
expense) shall be promptly submitted by such Bank to the Company (with a copy to
the Administrative Agent) and shall, in the absence of manifest error, be
conclusive and binding as to the amount thereof.

     SECTION 3.05. RATE DETERMINATION CONCLUSIVE. The applicable Interest Rate
for each Interest Period with respect to each Loan (other than any Fixed Rate
Loan) shall be determined by the Administrative Agent and shall be conclusive
and, subject to Section 3.03 and Section 4.03 hereof, binding upon the parties
hereto, in the absence of manifest error. The Administrative Agent shall, at the
request in writing of the Company or any Bank, deliver to the Company or such
Bank a statement showing the computations used by the Administrative Agent in
determining any Interest Rate in respect of the Loans payable by the Company.


                                   ARTICLE IV

                         REDUCTION OR TERMINATION OF THE
                  REVOLVING CREDIT COMMITMENTS AND PREPAYMENTS

     SECTION 4.01. REDUCTION OR TERMINATION OF THE TOTAL COMMITMENT. The Company
may, from time to time on at least five (5) Business Days' prior notice (by

[NYCorp;1203895.1]

                                       45


telephone (confirmed in writing promptly thereafter) or telecopier) received by
the Administrative Agent (which shall advise each Bank thereof as soon as
practicable thereafter), permanently reduce the Total Commitment (such reduction
shall reduce each Bank's Revolving Credit Commitment ratably according to its
respective Proportional Share of the amount of such reduction and Schedule I
hereto shall be deemed amended to reflect the reduction in such Revolving Credit
Commitments) but only upon (a) repayment of that portion of the aggregate unpaid
principal amount of all Revolving Credit Loans which, together with the
aggregate principal amount of all Competitive Loans then outstanding, exceeds
the amount of the Total Commitment as so reduced (such repayment to be applied
to each Bank's Revolving Credit Loans in the same proportion as its Revolving
Credit Commitment is reduced), and (b) payment to the Administrative Agent, for
the ratable account of the Banks, of the Facility Fees on the portion of the
Total Commitment so reduced which have accrued through the date of such
reduction; PROVIDED, HOWEVER, the Company may not so reduce the Total Commitment
at any time to an amount less than the aggregate principal amount of all
Competitive Loans then outstanding. Any such reduction shall be in an aggregate
amount of $50,000,000 or an integral multiple of $10,000,000 in excess of
$50,000,000. The Company may at any time, on like notice, terminate the Total
Commitment (and each Bank's Revolving Credit Commitment) upon payment in full of
all Loans and the accrued interest thereon and the Facility Fees accrued through
the date of such termination; PROVIDED, HOWEVER, that the Company may not
terminate the Total Commitment at any time that Competitive Loans are then
outstanding. Each notice delivered by the Company pursuant to this Section 4.01
shall be irrevocable; PROVIDED that a notice of termination of the Total
Commitment delivered by the Company may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Company (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied.

     SECTION 4.02. PREPAYMENTS. (a) The Company may from time to time, upon at
least (i) two (2) Business Days' prior notice (in the event such notice pertains
to Domestic Loans) or (ii) three (3) Business Days' prior notice (in the event
such notice pertains to Eurodollar Loans) (by telephone (confirmed in writing
promptly thereafter) or telecopier) received by the Administrative Agent (prior
to 12:00 noon, New York City time, in the event such notice pertains to Domestic
Loans) (which shall advise each Bank thereof as soon as practicable thereafter),
prepay any Revolving Credit Borrowing in whole or in part, without, except as
provided in Section 3.04 hereof, premium or penalty (such prepayment to be PRO
RATA to the Banks according to the respective unpaid principal amounts of the
Revolving Credit Notes held by them); PROVIDED, HOWEVER, that each such
prepayment shall be in an aggregate amount of $50,000,000 or an integral
multiple of $10,000,000 in excess of $50,000,000. Except as provided in Section
2.09(e)(ii), Section 2.09(e)(iii), Section 2.13(c)(i), Section 2.14(i), Section
4.03(a), Section 4.03(b)(ii) or Section 4.03(b)(iii) hereof, the Company shall
not have the right to prepay any Competitive Borrowing.

[NYCorp;1203895.1]

                                       46


     (b) Each notice of prepayment shall specify the Borrowing to be prepaid,
the prepayment date and the aggregate principal to be prepaid, and shall be
irrevocable; PROVIDED that, if a notice of prepayment is given in connection
with a conditional notice of termination of the Total Commitment as contemplated
by Section 4.01, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 4.01. All prepayments under
this Section 4.02 shall be accompanied by accrued interest on the principal
amount being prepaid to the date of prepayment.

     SECTION 4.03. REQUIRED TERMINATION OF THE REVOLVING CREDIT COMMITMENTS AND
PREPAYMENT. (a) In the event that at any time any Affected Bank shall have
reasonably determined in good faith (which determination shall be conclusive and
binding upon the parties hereto, in the absence of manifest error) that the
making or continuation of its Revolving Credit Commitment to make Eurodollar
Loans or its Eurodollar Loans have become unlawful under any applicable law,
governmental rule, requirement, regulation, guideline or order, then, and in any
such event, such Affected Bank shall as soon as practicable give notice (by
telephone (confirmed in writing promptly thereafter) or telecopier) to the
Company and to the Administrative Agent (which shall transmit such notice to
each of the Banks as soon as practicable thereafter), of such determination.
Thereupon, the Revolving Credit of such Affected Bank and the obligation of such
Affected Bank to make or maintain its Loan(s) shall be terminated and the
Company shall forthwith, and in any event no later than the earlier of (x) the
next succeeding Interest Payment Date with respect to such Loan(s) or (y) ten
(10) days after receipt of notice from such Affected Bank under this Section
4.03(a), prepay the outstanding Loan(s) of such Affected Bank without premium or
penalty, together with all interest accrued thereon and all other amounts owing
to such Affected Bank hereunder (including any amounts payable pursuant to
Section 3.04 hereof in connection with such prepayment).

     (b) In lieu of prepaying the Loan(s) of the Affected Bank as required by
Section 4.03(a) hereof, the Company may exercise any one or more of the
following options:

          (i) If such determination by an Affected Bank relates to Eurodollar
     Loans then being requested by the Company pursuant to a notice of Borrowing
     as provided in Sections 2.01, 2.02 or 2.07 hereof, the Company may, not
     later than 9:00 a.m., New York City time, on the day which is three (3)
     Business Days prior to the date on which such Loans were to have been made
     by giving notice (by telephone (confirmed in writing promptly thereafter)
     or telecopier) to the Administrative Agent (which shall transmit such
     notice to each of the Banks otherwise required to participate in such Loans
     as soon as practicable thereafter) irrevocably withdraw such notice of
     Borrowing.

         (ii) The Company may request one or more of the non-Affected Banks to
     take over all (but not part) of each Affected Bank's then outstanding
     Loan(s)

[NYCorp;1203895.1]

                                       47


     and to assume all (but not part) of each Affected Bank's Revolving Credit
     Commitment and obligations hereunder. If one or more Banks shall so agree
     in writing with respect to an Affected Bank, (x) the Revolving Credit
     Commitment of each Assenting Bank and the obligations of such Assenting
     Bank under this Agreement shall be increased by its respective Allocable
     Share of the Revolving Credit Commitment and of the obligations of such
     Affected Bank under this Agreement, and (y) each Assenting Bank shall make
     Loans to the Company, according to such Assenting Bank's respective
     Allocable Share, in an aggregate principal amount equal to the outstanding
     principal amount of the Loan(s) of such Affected Bank, on a date mutually
     acceptable to the Assenting Banks, such Affected Bank and the Company. The
     proceeds of such Loans, together with funds of the Company, shall be used
     to prepay the Loan(s) of such Affected Bank, together with all interest
     accrued thereon, and all other amounts owing to such Affected Bank
     hereunder (including any amounts payable pursuant to Section 3.04 hereof in
     connection with such prepayment), and, upon such assumption by the
     Assenting Banks and prepayment by the Company, such Affected Bank shall
     cease to be a "Bank" for purposes of this Agreement and shall no longer
     have any obligations hereunder (except as provided in Section 2.13(b),
     Section 10.02 and Section 10.07 hereof). Any such prepayment shall occur
     prior to the time any prepayment pursuant to Section 4.03(a) hereof is
     required to be made.

         (iii) Upon notice (by telephone (confirmed in writing promptly
     thereafter) or telecopier) to the Administrative Agent (which shall advise
     each Bank thereof as soon as practicable thereafter), the Company may
     terminate the obligations of the Banks to make or maintain Loans as
     Eurodollar Loans and, in such event, the Company shall, prior to the time
     any prepayment pursuant to Section 4.03(a) hereof is required to be made,
     refinance all of the Eurodollar Loans with Domestic Loans, or prepay such
     Eurodollar Loans, in the manner contemplated by and pursuant to Section
     2.07 or Section 4.02 hereof, respectively.

          (iv) (A) The Company may designate one or more Replacement Lenders
     mutually acceptable to the Company and the Administrative Agent (whose
     consent shall not be unreasonably withheld) to assume the Revolving Credit
     Commitment and the obligations of each such Affected Bank hereunder, and to
     purchase, prior to the time any prepayment pursuant to Section 4.03(a)
     hereof is required to be made, the outstanding Notes of such Affected Bank
     and such Affected Bank's rights hereunder and with respect thereto, without
     recourse upon, or warranty by, or expense to, such Affected Bank, for a
     purchase price equal to the outstanding principal amount of the Loan(s) of
     such Affected Bank plus all interest accrued thereon and all other amounts
     owing to such Affected Bank hereunder (including the amount which would be
     payable to such Affected Bank pursuant to Section 3.04 hereof if the
     purchase of its Notes constituted a prepayment thereof contemplated by
     clause (ii) of the first sentence of Section 3.04 hereof), and upon such
     assumption and purchase by the Replace-

[NYCorp;1203895.1]

                                       48


     ment Lenders, each such Replacement Lender shall be deemed to be a "Bank"
     for purposes of this Agreement and such Affected Bank shall cease to be a
     "Bank" for purposes of this Agreement and shall no longer have any
     obligations hereunder (except as provided in Section 2.13(b), Section 10.02
     and Section 10.07 hereof).

         (B) As an alternative, the Company may designate one or more
     Replacement Lenders mutually acceptable to the Company and the
     Administrative Agent (whose consent shall not be unreasonably withheld)
     which shall upon a date mutually agreed upon by the Company and such
     Replacement Lenders assume the Revolving Credit Commitment and the
     obligations of such Affected Bank under this Agreement and shall upon such
     date make Loans to the Company in an aggregate principal amount equal to
     the outstanding principal amount of the Loan(s) of such Affected Bank. The
     proceeds of such Loans, together with funds of the Company, shall be used
     to prepay the Loan(s) of such Affected Bank, together with all interest
     accrued thereon and all other amounts owing to such Affected Bank hereunder
     (including any amounts payable pursuant to Section 3.04 hereof in
     connection with such prepayment), and, upon such Replacement Lenders making
     such Loans and such prepayment by the Company, such Replacement Lenders
     shall be deemed to be "Banks" for purposes of this Agreement and such
     Affected Bank shall cease to be a "Bank" for purposes of this Agreement and
     shall no longer have any obligations hereunder (except as provided in
     Section 2.13(b), Section 10.02 and Section 10.07 hereof). Each such
     Replacement Lender shall execute and deliver to the Administrative Agent
     such documentation to evidence its status as a "Bank" hereunder as shall be
     mutually acceptable to the Company and the Administrative Agent. The
     effectiveness of each Replacement Lender's Revolving Credit Commitment, the
     making of such Loans by such Replacement Lenders and the prepayment by the
     Company of the Loan(s) of such Affected Bank shall be deemed to have
     occurred simultaneously for all purposes hereof.

     The Company shall provide replacement Notes to any Assenting Bank or any
Replacement Lender, as the case may be, to reflect the identity of, and/or the
outstanding amount of the Loans of, and/or the principal amount of such Notes
issued to, such Assenting Bank or such Replacement Lender, and Schedule I and
Schedule II hereto shall be deemed amended to reflect the addition of such
Replacement Lender and any increases or decreases in the Revolving Credit
Commitments of the Affected Banks and the Assenting Banks, as the case may be.

[NYCorp;1203895.1]

                                       49


                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

     SECTION 5.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Banks, the Agents and the Managing Agents as
follows:

         (a) COMPANY'S ORGANIZATION; CORPORATE POWER. The Company is a
     corporation duly incorporated, validly existing and in good standing under
     the laws of the State of Delaware; the Company is duly qualified or
     licensed and in good standing as a foreign corporation authorized to do
     business in each other jurisdiction where, because of the nature of its
     activities or properties, such qualification or licensing is required,
     except for such jurisdictions where the failure to be so qualified or
     licensed will not materially adversely affect the financial condition,
     business or operations of the Company and its Consolidated Subsidiaries,
     taken as a whole, or prevent the enforcement of contracts to which the
     Company is a party; and the Company has all requisite corporate power and
     authority (i) to own its assets and to carry on the business in which it is
     engaged, (ii) to execute, deliver and perform its obligations under this
     Agreement and the Notes, (iii) to borrow in the manner and for the purpose
     contemplated by this Agreement, (iv) to issue the Notes in the manner and
     for the purpose contemplated by this Agreement, and (v) to execute, deliver
     and perform its obligations under all other agreements and instruments
     executed and delivered by the Company pursuant to or in connection with
     this Agreement.

         (b) DOMESTIC SPECIFIED SUBSIDIARIES; ORGANIZATION; CORPORATE POWER. As
     of the Effective Date, each domestic Specified Subsidiary is a corporation
     or other entity (as the case may be) duly incorporated or formed, validly
     existing and in good standing under the laws of the state or jurisdiction
     of its incorporation or formation; and, as of the Effective Date, each
     domestic Specified Subsidiary has all requisite corporate power and
     authority to own its assets and to carry on the business in which it is
     engaged.

          (c) COMPANY'S CORPORATE AUTHORITY; NO CONFLICT. The execution and
     delivery by the Company of this Agreement and the Notes, the performance by
     the Company of its obligations under this Agreement and the Notes, the
     Borrowings by the Company in the manner and for the purpose contemplated by
     this Agreement, the issuance by the Company of the Notes in the manner and
     for the purpose contemplated by this Agreement, the execution and delivery
     by the Company of all other agreements and instruments which shall have
     been executed and delivered by the Company pursuant hereto or in connection
     here with, and the performance by the Company of its obligations under all
     other agreements and instruments which shall have been executed and
     delivered by the Company pursuant hereto or in connection herewith, have
     been duly authorized

[NYCorp;1203895.1]

                                       50


     by all necessary corporate action (including any necessary stockholder
     action) on the part of the Company, and do not and will not (i) violate any
     provision of any law, rule or regulation (including, without limitation,
     Regulation U and Regulation X) presently in effect having applicability to
     the Company (or any Specified Subsidiary), or of any order, writ, judgment,
     decree, determination or award (which is, individually or in the aggregate,
     material to the consolidated financial condition, business or operations of
     the Company and its Consolidated Subsidiaries) presently in effect having
     applicability to the Company (or any Specified Subsidiary) or of the
     charter or by-laws of the Company (or any Specified Subsidiary), or (ii)
     subject to the Company's compliance with any applicable covenants
     pertaining to its incurrence of unsecured indebtedness, result in a breach
     of or constitute a default under any indenture or loan or credit agreement,
     or result in a breach of or constitute a default under any other agreement
     or instrument (which is, individually or in the aggregate, material to the
     consolidated financial condition, business or operations of the Company and
     its Consolidated Subsidiaries), to which the Company or any Specified
     Subsidiary is a party or by which the Company or any Specified Subsidiary
     or its respective properties may be bound or affected, or (iii) result in,
     or require, the creation or imposition of any Lien of any nature upon or
     with respect to any of the properties now owned or hereafter acquired by
     the Company (other than any right of setoff or banker's lien or attachment
     that any Bank or other holder of a Note may have under applicable law), and
     the Company is not in default under or in violation of its charter or
     by-laws.

          (d) VALID AND BINDING OBLIGATIONS OF THE COMPANY. This Agreement
     constitutes, and (when executed and delivered by the Company) the Notes and
     each other agreement or instrument executed and delivered by the Company
     pursuant hereto or in connection herewith will each constitute, the legal,
     valid and binding obligation of the Company, enforceable against the
     Company in accordance with its respective terms, except as enforcement may
     be limited by bankruptcy, insolvency, reorganization, moratorium or other
     similar laws affecting the enforcement of creditors' rights generally and
     by general principles of equity, including, without limitation, concepts of
     materiality, reasonableness, good faith and fair dealing and the possible
     unavailability of specific performance or injunctive relief (regardless of
     whether such enforceability is considered in a proceeding in equity or at
     law).

          (e) COMPANY'S FINANCIAL CONDITION. The Company's audited consolidated
     financial statements as at December 31, 1999, copies of which have been
     furnished to each Bank, have been prepared in conformity with generally
     accepted accounting principles applied on a basis consistent with that of
     the preceding fiscal year and fairly present the consolidated financial
     condition of the Company and its Consolidated Subsidiaries as at such date
     and the results of their operations for the period then ended; since
     December 31, 1999 to and including the Effective Date, there has been no
     material adverse change in their

[NYCorp;1203895.1]

                                       51


     consolidated financial condition, business or operations, except as set
     forth in the Company's annual report on Form 10-K for the year ended
     December 31, 1999, its quarterly reports on Form 10-Q for the quarters
     ended March 31, 2000, June 30, 2000 and September 30, 2000, or its current
     report on Form 8-K dated November 16, 2000, in each case to the Securities
     and Exchange Commission, (copies of each of which have been furnished to
     each Bank) or as disclosed in writing to the Banks prior to the Effective
     Date; and, since the Effective Date, there has been no material adverse
     change in their consolidated financial condition from the most recent
     consolidated financial statements of the Company and its Consolidated
     Subsidiaries which have been furnished to the Banks pursuant to this
     Agreement, except as disclosed in writing to the Banks.

         (f) LITIGATION WITH RESPECT TO THE COMPANY OR ITS SUBSIDIARIES. As of
     the Effective Date, no litigation (including, without limitation,
     derivative actions), arbitration proceedings or governmental proceedings
     are pending or, to the knowledge of the Company, threatened against the
     Company or any Subsidiary of the Company which are likely (to the extent
     not covered by insurance) materially and adversely to affect the
     consolidated financial condition of the Company and its Consolidated
     Subsidiaries or materially to impair the Company's ability to perform its
     obligations under this Agreement and the Notes, except as set forth in the
     Company's annual report on Form 10-K for the year ended December 31, 1999,
     its quarterly reports on Form 10-Q for the quarters ended March 31, 2000,
     June 30, 2000 and September 30, 2000, or its current report on Form 8-K
     dated November 16, 2000, to the Securities and Exchange Commission, or as
     disclosed in writing to the Banks prior to the Effective Date.

          (g) REGULATORY APPROVALS WITH RESPECT TO THIS AGREEMENT. No
     authorization, consent, approval, license or formal exemption from, nor any
     filing, declaration or registration with, any court, governmental agency or
     regulatory authority (Federal, state, local or foreign), including, without
     limitation, the Securities and Exchange Commission, or with any securities
     exchange, is or will be required in connection with the execution and
     delivery by the Company of this Agreement or the Notes, the performance by
     the Company of its obligations under this Agreement and the Notes, the
     Borrowings by the Company in the manner and for the purpose contemplated by
     this Agreement, or the issuance by the Company of the Notes in the manner
     and for the purpose contemplated by this Agreement (except for such
     authorizations, consents, approvals, licenses, exemptions, filings,
     declarations or registrations, if any, which may be required to be obtained
     or made subsequent to the Effective Date, all of which, if then required,
     will have been duly obtained or made on or before each date on which the
     foregoing representation and warranty shall be made, deemed made or
     reaffirmed, as the case may be, will be sufficient for all purposes thereof
     and will be in full force and effect on each such date).

[NYCorp;1203895.1]

                                       52


         (h) ERISA. As of the Effective Date, no material liability to the PBGC
     has been, or is expected by the Company or any Related Person to the
     Company to be, incurred by the Company or any Related Person to the
     Company. No Reportable Event which presents a material risk of termination
     of any Plan maintained by the Company or a Related Person to the Company
     has occurred and is continuing at the Effective Date. No Plan maintained by
     the Company or a Related Person to the Company had an Accumulated Funding
     Deficiency, whether or not waived, as of the last day of the most recent
     fiscal year of such Plan ending prior to the Effective Date. Neither the
     Company nor any Related Person to the Company has engaged in a Prohibited
     Transaction prior to the Effective Date.

         (i)  INVESTMENT COMPANY ACT.  The Company is not an "investment
     company" or a company "controlled" by an "investment company", within the
     meaning of the Investment Company Act of 1940, as amended.

         (j) PUBLIC UTILITY HOLDING COMPANY ACT. The Company is not a "holding
     company", or a "subsidiary company" of a "holding company", or an
     "affiliate" of a "holding company" or of a "subsidiary company" of a
     "holding company", within the meaning of the Public Utility Holding Company
     Act of 1935, as amended.

         (k) REGULATION U; REGULATION X. The Company is not engaged principally,
     or as one of its important activities, in the business of extending, or
     arranging for the extension of, credit for the purpose of purchasing or
     carrying any margin stock within the meaning of Regulation U, and no part
     of the proceeds of any Loan will be used for any purpose which would be in
     violation of such regula tions or in violation of Regulation X.

         (l) COMPANY'S TAX RETURNS AND TAX LIABILITY. The Company and its
     Subsidiaries, except for any Subsidiary (x) incorporated under the laws of
     any jurisdiction other than the United States of America or any State
     thereof or the District of Columbia or (y) having substantially all of its
     properties and assets or conducting substantially all of its business
     outside the United States of America and having assets immaterial in
     comparison to the assets of the Company and its Consolidated Subsidiaries,
     have filed all tax returns required to be filed by them and have paid or
     provided adequate reserves or obtained adequate indemnity for the payment
     of all taxes and assessments payable by them which have become due, other
     than (i) those not yet delinquent, (ii) those the nonpayment of which would
     not be reasonably likely to result in a material adverse effect on the
     consolidated financial condition of the Company and its Consolidated
     Subsidiaries, (iii) those being contested in good faith and (iv) those
     involving foreign taxes and assessments which are involved in a good faith
     dispute.

[NYCorp;1203895.1]

                                       53


     (m) ENVIRONMENTAL AND PUBLIC AND EMPLOYEE HEALTH AND SAFETY MATTERS. As of
the Effective Date, the Company and each Subsidiary has complied with all
applicable Federal, state, and other laws, rules and regulations relating to
environmental pollution or to environmental regulation or control or to public
or employee health or safety, except (i) to the extent that the failure to so
comply would not be reasonably likely to result in a material and adverse effect
on the consolidated financial condition of the Company and its Consolidated
Subsidiaries or (ii) as set forth in the Company's annual report on Form 10-K
for the year ended December 31, 1999, its quarterly reports on Form 10-Q for the
quarters ended March 31, 2000, June 30, 2000 and September 30, 2000, or its
current report on Form 8-K dated November 16, 2000, to the Securities and
Exchange Commission, or as disclosed in writing to the Banks prior to the
Effective Date. As of the Effective Date, the Company's and the Subsidiaries'
facilities do not manage any hazardous wastes, hazardous substances, hazardous
materials, toxic substances or toxic pollutants regulated under the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Hazardous Materials Transportation Act, the
Toxic Substance Control Act, the Clean Air Act, the Clean Water Act or any other
applicable law relating to environmental pollution or public or employee health
and safety, in violation of any such law, or any rules or regulations
promulgated pursuant thereto, except (A) for violations that would not be
reasonably likely to result in a material and adverse effect on the consolidated
financial condition of the Company and its Consolidated Subsidiaries or (B) as
set forth in the Company's annual report on Form 10-K for the year ended
December 31, 1999, its quarterly reports on Form 10-Q for the quarters ended
March 31, 2000, June 30, 2000 and September 30, 2000, or its current report on
Form 8-K dated November 16, 2000, to the Securities and Exchange Commission, or
as disclosed in writing to the Banks prior to the Effective Date. As of the
Effective Date, the Company is aware of no events, conditions or circumstances
involving environmental pollution or contamination or public or employee health
or safety, in each case applicable to it or its Subsidiaries, that would be
reasonably likely to result in a material and adverse effect on the consolidated
financial condition of the Company and its Consolidated Subsidiaries except as
set forth in the Company's annual report on Form 10-K for the year ended
December 31, 1999, its quarterly reports on Form 10- Q for the quarters ended
March 31, 2000, June 30, 2000 and September 30, 2000, or its current report on
Form 8-K dated November 16, 2000, to the Securities and Exchange Commission, or
as disclosed in writing to the Banks prior to the Effective Date.

     (n) TRUE AND COMPLETE DISCLOSURE. To the best of the Company's knowledge
and belief, all factual information heretofore or contemporaneously furnished by
or on behalf of the Company or any Subsidiary of the Company to any Bank, any
Agent or any Managing Agent for purposes of or in connection with this Agreement
or any transaction contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of the Company or any Subsidiary
of the Company to any Bank, any Agent or any Managing Agent will be, true and
accurate (taken as a whole)

[NYCorp;1203895.1]

                                       54


on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time.


                                   ARTICLE VI

                                    COVENANTS

     SECTION 6.01.  AFFIRMATIVE COVENANTS OF THE COMPANY.  So long as any Loan
shall remain unpaid or any Bank shall have any Revolving Credit Commitment
hereunder, the Company will, unless the Required Banks shall have otherwise con
sented in writing:

         (a)  REPORTS, CERTIFICATES AND OTHER INFORMATION. Furnish to each Bank:

              (i) INTERIM REPORTS. Within 60 days after the end of each of the
         first three quarterly fiscal periods in each fiscal year of the
         Company, a consolidated balance sheet of the Company as at the end of
         such period (setting forth in comparative form the consolidated figures
         as of the end of the previous fiscal year), the related consolidated
         statement of operations for such period and (in the case of the second
         and third quarterly periods) for the period from the beginning of the
         current fiscal year to the end of such quarterly period (setting forth
         in each case in comparative form the consolidated figures for the
         corresponding periods of the previous fiscal year) and the related
         consolidated statement of cash flows for the period from the beginning
         of the current fiscal year to the end of such quarterly period (setting
         forth in comparative form the consolidated figures from the
         corresponding period of the previous fiscal year), all in reasonable
         detail and certified, subject to changes resulting from year-end audit
         adjustments, by a financial officer of the Company (it being understood
         that the delivery of (A) the Company's Form 10-Q setting forth such
         statements for each such period and (B) a certification by a financial
         officer of the Company to the effect that such statements fairly
         present in all material respects the financial condition and results of
         operations of the Company on a consolidated basis (subject to changes
         resulting from year-end audit adjustments) shall satisfy the
         requirements of this Section 6.01(a)(i)).

               (ii) ANNUAL REPORTS. Within 120 days after the end of each fiscal
          year of the Company, a consolidated balance sheet of the Company as at
          the end of such year, and the related consolidated statements of
          operations and cash flows for such year, setting forth in each case in
          comparative form the consolidated figures for the previous fiscal
          year, accompanied by the opinion thereon of independent public
          accountants of recognized national standing selected by the Company,
          which opinion shall be prepared in accordance with

[NYCorp;1203895.1]

                                       55


          generally accepted auditing standards relating to reporting and shall
          be based upon an audit by such accountants of the relevant accounts
          (it being understood that the delivery of the Company's Form 10-K
          setting forth such statements for such year shall satisfy the
          requirements of this Section 6.01(a)(ii)).

              (iii) OFFICERS' CERTIFICATES. Together with each delivery of
         financial statements pursuant to Sections 6.01(a)(i) and 6.01(a)(ii)
         hereof, an Officers' Certificate (A) stating that the signers have
         reviewed the relevant terms of this Agreement and of the Notes and have
         made, or caused to be made under their supervision, a review of the
         transactions and condition of the corporation or corporations covered
         by such financial statements during the accounting period in question,
         and that such review has not disclosed the existence during such
         accounting period, and that the signers do not otherwise have knowledge
         of the existence as at the date of such Officers' Certificate, of any
         Event of Default or Unmatured Event of Default, or, if any such Event
         of Default or Unmatured Event of Default existed or exists, specifying
         the nature and period of existence thereof and what action the Company
         has taken or is taking or proposes to take with respect thereto and (B)
         demonstrating in reasonable detail compliance during such accounting
         period with Sections 6.01(h), 6.02(b) and 6.02(c) hereof.

              (iv) ACCOUNTANTS' CERTIFICATES. Together with each delivery of
         financial statements pursuant to Section 6.01(a)(ii) hereof, a
         certificate signed by the independent public accountants reporting
         thereon (A) briefly setting forth the scope of their examination (which
         shall include a review of the Notes, of this Section 6.01(a) and of
         Sections 6.01(b), 6.01(e), 6.01(h) and 6.02 (other than Section
         6.02(e)) hereof), (B) stating whether or not their examination has
         disclosed the existence, during the fiscal year covered by such
         financial statements, of any Event of Default or Unmatured Event of
         Default and, if their examination has disclosed such an Event of
         Default or Unmatured Event of Default, specifying the nature and period
         of existence thereof, and (C) stating that they have examined the
         Officers' Certificate delivered therewith pursuant to Section
         6.01(a)(iii) hereof.

              (v) REPORTS TO SEC AND TO STOCKHOLDERS. Promptly upon their
         becoming publicly available, copies of all financial statements,
         reports, notices and proxy statements sent by the Company to its
         stockholders, and of all regular and periodic reports filed by the
         Company or any of its Specified Subsidiaries with the Securities and
         Exchange Commission or any governmental authority succeeding to any of
         its functions, which in each case have not been delivered under
         paragraph (a)(i) or (a)(ii) of this Section 6.01.

              (vi) OFFICERS' CERTIFICATES AS TO STATUS OF EXCEPTED SUBSIDIARIES.
         (A) Promptly after the designation of a Subsidiary of the Company as an

[NYCorp;1203895.1]

                                       56


         Excepted Subsidiary or the withdrawal of such designation, an Officers'
         Certificate setting forth the name of the Subsidiary and whether it is
         being designated as, or withdrawn from designation as, an Excepted
         Subsidiary, and (B) as soon as practicable after the designation of a
         Subsidiary of the Company as an Excepted Subsidiary or the withdrawal
         of such designation, or, at the option of the Company, together with
         the next delivery of any financial statements to the Banks pursuant to
         Section 6.01(a)(i) or Section 6.01(a)(ii) hereof, an Officers'
         Certificate setting forth in reasonable detail, and certifying the
         correctness of, all facts and computations required in order to
         establish that such designation or withdrawal of designation is
         permitted in accordance with this Agreement, and listing all
         Subsidiaries of the Company that are designated as Excepted
         Subsidiaries at such time.

              (vii) OFFICERS' CERTIFICATES AS TO STATUS OF PRINCIPAL
         SUBSIDIARIES. As soon as practicable after the determination that a
         Person which shall have become a Subsidiary of the Company after
         December 31, 1999, is a Principal Subsidiary or, at the option of the
         Company, together with the next delivery of any financial statements to
         the Banks pursuant to Section 6.01(a)(i) or Section 6.01(a)(ii) hereof,
         an Officers' Certificate confirming the same.

              (viii) NOTICE OF DEFAULT. Forthwith upon any principal officer of
         the Company obtaining knowledge of the occurrence of an Event of
         Default or an Unmatured Event of Default, an Officers' Certificate
         specifying the nature and period of existence thereof and what action
         the Company has taken or is taking or proposes to take with respect
         thereto.

              (ix) OTHER INFORMATION. With reasonable promptness, such other
         information and data with respect to the Company or any of its
         Specified Subsidiaries as from time to time may be reasonably requested
         by any Bank.

         (b) TAXES. Pay or provide adequate reserves or obtain adequate
     indemnity for the payment of, and cause each Subsidiary to pay or provide
     adequate reserves or obtain adequate indemnity for the payment of, all
     taxes and assessments payable by it which become due, other than (i) those
     not yet delinquent, (ii) those the nonpayment of which would not be
     reasonably likely to result in a material adverse effect on the
     consolidated financial condition of the Company and its Consolidated
     Subsidiaries, (iii) those being contested in good faith and (iv) those
     involving foreign taxes and assessments which are involved in a good faith
     dispute with respect to tax or other matters.

          (c) PRESERVATION OF CORPORATE EXISTENCE, ETC. Subject to Section
     6.02(a) hereof, do or cause to be done all things necessary to preserve and
     keep in full force and effect the corporate existence and the rights
     (charter and statutory) of

[NYCorp;1203895.1]

                                       57


     the Company and each Specified Subsidiary; PROVIDED, HOWEVER, that the
     Company shall not be required to preserve any such right or franchise if
     the Company shall determine that the preservation thereof is no longer
     desirable in the conduct of the business of the Company or any Specified
     Subsidiary and that the loss thereof is not disadvantageous in any material
     respect to the Banks under this Agreement.

         (d) INSPECTIONS; DISCUSSIONS. Permit any authorized representatives
     designated by a Bank, at such Bank's expense, to make reasonable
     inspections of any of the properties of the Company or any of its Specified
     Subsidiaries, including its and their books of account, and to discuss its
     and their affairs, finances and accounts with its and their officers, all
     at such reasonable times and as often as may be reasonably requested by
     such Bank; PROVIDED that if required by the Company, any such Bank shall,
     as a condition to being permitted to make any such inspection, certify to
     the Company that the same is being made solely in order to assist such Bank
     in evaluating its extension of credit to the Company evidenced by the
     Notes.

         (e) BOOKS AND RECORDS. Maintain, and cause each of its Consolidated
     Subsidiaries to maintain, a system of accounting established and
     administered in accordance with generally accepted accounting principles
     applied on a consistent basis, and set aside, and cause each of its
     Consolidated Subsidiaries to set aside, on its books all such proper
     reserves as shall be required by generally accepted accounting principles.

         (f) MAINTENANCE OF PROPERTIES. Cause all properties used or useful in
     the conduct of its business or the business of a Specified Subsidiary to be
     maintained and kept in good condition, repair and working order and
     supplied with all necessary equipment, and cause to be made all necessary
     repairs, renewals, replacements, betterments and improvements thereof, all
     as in the judgment of the Company may be necessary so that the business
     carried on in connection therewith may be properly and advantageously
     conducted at all times; PROVIDED, HOWEVER, that nothing in this Section
     6.01(f) shall prevent the Company from discontinuing the operation or
     maintenance, or both the operation and maintenance, of any of such
     properties if such discontinuance is, in the judgment of the Company,
     desirable in the conduct of its business or the business of any Specified
     Subsidiary and not disadvantageous in any material respect to the Banks
     under this Agreement.

          (g) MAINTENANCE OF INSURANCE. Insure and keep insured, and cause each
     Specified Subsidiary to insure and keep insured, with reputable insurance
     companies, so much of its respective properties, to such an extent and
     against such risk (including fire), as companies engaged in similar
     businesses and of similar size customarily insure properties of a similar
     character; or, in lieu thereof, in the case of itself or of any one or more
     of its Specified Subsidiaries, maintain or cause to be maintained a system
     or systems of self-insurance which

[NYCorp;1203895.1]

                                       58


     will accord with the approved practices of companies owning or operating
     properties of a similar character in maintaining such systems.

         (h)  CONSOLIDATED ADJUSTED TANGIBLE NET WORTH.  Maintain Consolidated
     Adjusted Tangible Net Worth at least equal to $2,600,000,000 at all times.

         (i) COMPLIANCE WITH LAWS, ETC. Not violate any laws, rules,
     regulations, or governmental orders to which it is subject (including any
     such laws, rules, regulations or governmental orders relating to the
     protection of the environment or to public or employee health or safety),
     which violation would be reasonably likely to result in a material adverse
     effect on the consolidated financial condition of the Company and its
     Consolidated Subsidiaries; and not permit any Subsidiary of the Company to
     violate any laws, rules, regulations, or governmental orders of Federal,
     state or local governmental entities within the United States to which it
     is subject (including any such laws, rules, regulations or governmental
     orders relating to the protection of the environment or to public or
     employee health or safety), which violation would be reasonably likely to
     result in a material adverse effect on the consolidated financial condition
     of the Company and its Consolidated Subsidiaries.

          (j) DELIVERY OF CERTAIN DOCUMENTATION WITH RESPECT TO PLANS. (i) As
     soon as possible and in any event within 30 days after it knows or has
     reason to know that, regarding any Plan with respect to the Company or a
     Related Person to the Company, a Prohibited Transaction or a Reportable
     Event which presents a material risk of termination of any Plan maintained
     by the Company or a Related Person to the Company has occurred (whether or
     not the requirement for notice of such Reportable Event has been waived by
     the PBGC), deliver to the Syndication Agent and each Bank a certificate of
     a responsible officer of the Company setting forth the details of such
     Prohibited Transaction or Reportable Event, (ii) upon request of the
     Syndication Agent or any Bank made from time to time after the occurrence
     of any such Prohibited Transaction or Reportable Event, deliver to the
     Syndication Agent and each Bank a copy of the most recent actuarial report
     and annual report completed with respect to any Plan maintained by the
     Company or a Related Person to the Company, and (iii) as soon as possible,
     and in any event within 10 days, after it knows or has reason to know that
     any of the following have occurred with respect to any Plan maintained by
     the Company or a Related Person to the Company: (A) any such Plan has been
     terminated, (B) the Plan Sponsor intends to terminate any such Plan, (C)
     the PBGC has instituted or will institute proceedings under Section 4042 of
     ERISA to terminate any such Plan, or (D) the Company or any Related Person
     to the Company withdraws from any such Plan, deliver to the Syndication
     Agent and each Bank a written notice thereof. For purposes of this Section
     6.01(j), the Company shall be deemed to have knowledge of all facts known
     by the Plan Administrator of any Plan or Employee Benefit Plan of which the
     Company or any Related Person to the Company is the Plan Sponsor.

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                                       59


         (k) CONTRIBUTIONS TO PLANS. Pay, and use its best efforts to cause each
     Related Person with respect to the Company to pay, when due, all
     contributions required to meet the minimum funding standards set forth in
     Sections 302 through 308 of ERISA with respect to each Plan maintained by
     the Company or a Related Person to the Company.

          (l) USE OF PROCEEDS. Use the proceeds of the Loans for general
     corporate purposes and not for any purpose which is in violation of
     Regulation U or Regulation X.

     SECTION 6.02. NEGATIVE COVENANTS OF THE COMPANY. So long as any Loan shall
remain unpaid or any Bank shall have any Revolving Credit Commitment hereunder,
the Company will not, without the prior written consent of the Required Banks:

          (a) MERGERS, CONSOLIDATIONS, SALES. Consolidate with or merge into any
     other corporation or convey or transfer its properties substantially as an
     entirety to any Person, unless:

              (i) the corporation formed by such consolidation or into which the
         Company is merged or the Person which acquires by conveyance or
         transfer the properties and assets of the Company substantially as an
         entirety, shall be a corporation organized and existing under the laws
         of the United States or any state or the District of Columbia, and
         shall expressly assume the due and punctual payment of the principal of
         and interest on all the Notes and the performance of every covenant of
         this Agreement on the part of the Company to be performed or observed;
         and

              (ii) immediately after giving effect to such transaction, no Event
         of Default or Unmatured Event of Default shall have occurred and be
         continuing.

     Upon any consolidation or merger by the Company with or into any other
     corporation, or any conveyance or transfer by the Company of its properties
     and assets substantially as an entirety to any Person which is permitted by
     this Section 6.02(a), the successor corporation formed by such
     consolidation or into which the Company is merged or to which such
     conveyance or transfer is made shall succeed to, and be substituted for,
     and may exercise every right and power of, the Company under this Agreement
     with the same effect as if such successor corporation had been named as the
     Company herein; and, in the event of such conveyance or transfer, the
     Company (which term shall for this purpose mean the Person named as the
     "COMPANY" in the introduction to this Agreement or any successor
     corporation which shall theretofore become such in the manner described in
     this Section 6.02(a)) shall be discharged from all obligations and

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     covenants under this Agreement and the Notes and may be dissolved and
     liquidated.

         (b) RESTRICTION ON SECURED DEBT. Incur, create, assume, guarantee or
     otherwise become liable with respect to, or permit any Specified Subsidiary
     to incur, create, assume, guarantee or otherwise become liable with respect
     to, any Secured Debt, which would cause Consolidated Secured Debt to exceed
     15% of the sum of (x) the principal amount of the additional Funded Debt
     permitted at the time of calculation under Section 6.02(c) hereof and (y)
     Consolidated Debt at the time of calculation.

         (c) RESTRICTION ON CONSOLIDATED DEBT. Create, incur, assume, guarantee
     or in any other way become liable for, or permit any Specified Subsidiary
     to create, incur, assume, guarantee or in any other way become liable for,
     any Indebtedness included in Consolidated Debt (other than in connection
     with any renewal, extension or refunding of such Indebtedness which does
     not increase the net amount of the Consolidated Debt outstanding), unless
     immediately thereafter, and after giving effect thereto, the ratio of
     Consolidated Debt to Consolidated Adjusted Tangible Net Worth would not
     exceed 2.6 to 1.0.

         (d) RESTRICTION ON DIVIDENDS FROM PRINCIPAL SUBSIDIARIES. Enter into
     any agreement, or permit any Principal Subsidiary to enter into any
     agreement, containing any provision which would limit or restrict the
     declaration or payment of dividends by such Principal Subsidiary (i) if
     such agreement is an agreement for borrowed money, to an amount which is
     less than 75% of such Principal Subsidiary's cumulative net income, as
     determined in accordance with generally accepted accounting principles and
     computed on a consolidated basis for such Principal Subsidiary and its
     Subsidiaries, from the first day of the fiscal year of such Principal
     Subsidiary in which such agreement is executed, and (ii) if such agreement
     is not for borrowed money, to an amount which would materially adversely
     affect the Company's ability to perform its obligations under this
     Agreement and the Notes.

          (e) CHANGE IN CONTROL. Permit any Person or group (within the meaning
     of Rule 13d-5 of the Securities and Exchange Commission as in effect on the
     date hereof) beneficially to own more than 50% (by number of votes) of the
     Voting Securities of the Company unless such Voting Securities shall have
     been acquired in a transaction or series of transactions approved prior to
     such acquisition by the Board of Directors of the Company, and the
     directors so approving shall include directors who constitute a majority of
     the Board of Directors and who are persons either (i) who are directors on
     the date hereof or (ii) who were nominated or elected by a majority of the
     directors who (A) are directors on the date hereof or (B) shall have been
     nominated or elected as described in this clause (ii).

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                                   ARTICLE VII

                              CONDITIONS OF CREDIT

     The obligations of the Banks to make Loans hereunder are subject to (a) the
Revolving Credit Commitments having become effective as provided in Section 7.01
below and (b) the satisfaction of the conditions set forth in Section 7.02
below.

     SECTION 7.01. CONDITIONS TO EFFECTIVENESS OF COMMITMENTS. The Revolving
Credit Commitments shall become effective at such time as the following
conditions shall have been satisfied:

         (a) The Company shall have executed and delivered to the Syndication
     Agent for the account of each Bank a Competitive Note and Revolving Credit
     Note (appropriately completed).

         (b)  State Certificates as to the Company:

              (i) The Syndication Agent shall have received (with a photocopy
         for each Bank) a copy of the Restated Certificate of Incorporation of
         the Company and each amendment, if any, thereto (but not the
         certificates of designation of preferences of preferred stock),
         certified by the Secretary of State of the State of Delaware (as of a
         date shortly before the Effective Date) as being true and correct
         copies of such documents on file in the office of such Secretary of
         State.

              (ii) The Syndication Agent shall have received (with a photocopy
         for each Bank) the signed Certificate or Certificates of the Secretary
         of State of the State of Delaware, in regular form (as of a date
         shortly before the Effective Date), listing the Restated Certificate of
         Incorporation of the Company and each amendment, if any, thereto,
         together with the certificates of designation of preferences of
         preferred stock and the certificates of merger or ownership, on file in
         the office of such Secretary of State and stating that such documents
         are the only charter documents of the Company on file in such office
         filed on the date the Restated Certificate of Incorporation was filed
         or thereafter and that the Company is duly incorporated and in good
         standing in the State of Delaware and as to the franchise tax status of
         the Company.

          (c) The Syndication Agent and the Administrative Agent shall have
     received (with a photocopy for each Bank) the signed certificate of the
     President or a Vice President and the Secretary or an Assistant Secretary
     of the Company, dated the Effective Date and in the form of Exhibit F
     hereto (appropriately completed), certifying, among other things, (i) a
     true and correct copy of resolutions adopted by the Board of Directors or
     Executive Committee of the Board of Directors of

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     the Company authorizing the execution, delivery and performance by the
     Company of this Agreement and the Notes and authorizing the issuance by the
     Company of the Notes in the manner and for the purpose contemplated by this
     Agreement, (ii) a true and correct copy of the By-laws of the Company as in
     effect on the Effective Date, and (iii) the incumbency and specimen
     signatures of officers of the Company executing (x) the documents specified
     in clause (i) above, and (y) any other documents delivered to the
     Syndication Agent or the Administrative Agent on the Effective Date.

         (d) The Syndication Agent and the Administrative Agent shall have
     received (with a photocopy for each Bank) the signed opinion of Robert E.
     Sawyer, Esq., Associate General Counsel of the Company and counsel to the
     Company, dated the Effective Date and given upon the express instructions
     of the Company, in the form of Exhibit H hereto, with such changes (if any)
     therein as shall be acceptable to the Syndication Agent and special counsel
     to the Agents, and as to such other matters as the Syndication Agent may
     reasonably request.

         (e) The Syndication Agent and the Administrative Agent shall have
     received (with a photocopy for each Bank) the signed opinion of Cravath,
     Swaine & Moore, special counsel to the Agents, dated the Effective Date, in
     the form of Exhibit I hereto, with such changes (if any) therein as shall
     be acceptable to the Syndication Agent.

         (f) The Syndication Agent and the Administrative Agent shall have
     received (with a photocopy for each Bank) such other instruments and
     documents as the Syndication Agent and the Administrative Agent may have
     reasonably requested.

         (g) The Existing Credit Agreement shall have been or shall
     simultaneously be terminated and the principal of and interest accrued on
     all loans outstanding thereunder and all fees accrued thereunder shall have
     been or shall simultaneously be paid in full.

         (h) Each of the Agents, the Managing Agents and the Company shall have
     executed one or more counterparts of this Agreement.

         (i) The Syndication Agent shall have received satisfactory evidence
     that banks with Revolving Credit Commitments which cause the Total
     Commitment to equal $1,000,000,000 have executed one or more counterparts
     of this Agreement or of an Addendum.

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     SECTION 7.02. CONDITIONS PRECEDENT TO ALL LOANS. The obligation of each
Bank to make each Loan shall be subject to the fulfillment at or prior to the
time of the making of such Loan of each of the following further conditions:

         (a) The representations and warranties on the part of the Company
     contained in this Agreement shall be true and correct in all material
     respects at and as of the Borrowing Date for each Loan (other than any
     Refinancing Loan), as though made on and as of such date (except to the
     extent that such representations and warranties expressly relate solely to
     an earlier date).

         (b) Both before and after giving effect to such Loan (other than any
     Refinancing Loan), the Company shall be in compliance with the requirements
     of any applicable covenants pertaining to its incurrence of unsecured
     indebtedness.

         (c) No Event of Default and no Unmatured Event of Default (other than
     any Unmatured Event of Default which occurs as a result of a Bank Funding
     Default) shall have occurred and be continuing on the Borrowing Date for
     such Loan (other than any Refinancing Loan), or would result from the
     making of such Loan.

Each Borrowing by the Company shall be deemed to be a representation and
warranty by the Company on the date of such Borrowing that each of the
conditions contained in this Section 7.02 has been satisfied.


                                  ARTICLE VIII

                                EVENTS OF DEFAULT

     SECTION 8.01.  EVENTS OF DEFAULT.  If any of the following events, acts or
occurrences (herein called an "EVENT OF DEFAULT") shall occur and be continuing:

         (a) default, and continuance thereof for three (3) Business Days or, in
     the case of any default which results from a Bank Funding Default, five (5)
     Business Days after the Company shall have been advised by the Syndication
     Agent or the Administrative Agent of such Bank Funding Default, in the
     payment when due of any amount owing by the Company hereunder or under the
     Notes in respect of the principal of, or interest on, any Loan or in
     respect of the Facility Fee; or

         (b) any representation or warranty on the part of the Company contained
     in this Agreement or in any certificate, letter or other writing or
     instrument furnished or delivered to any Bank or the Syndication Agent or
     the Administrative Agent pursuant hereto or in connection herewith, shall
     at any time

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     prove to have been incorrect in any material respect when made, deemed made
     or reaffirmed, as the case may be; or

         (c) the Company shall default in the performance or observance of any
     term, covenant, condition or agreement on its part to be performed or
     observed under Section 6.01(h), 6.02(b), 6.02(c) or 6.02(d) hereof (other
     than a default which would not have occurred or would not be continuing if
     the calculations pursuant to the aforesaid Sections were made without
     giving effect to changes in generally accepted accounting principles which
     require implementation after the Effective Date); or

         (d) the Company shall default in any material respect in the
     performance or observance of any other term, covenant, condition or
     agreement on its part to be performed or observed hereunder (and not
     constituting an Event of Default under any other clause of this Section
     8.01), and such default shall continue unremedied for thirty (30) days
     after written notice thereof shall have been given to the Company by the
     Syndication Agent or any Bank; or

         (e) either (i) the Company or any Specified Subsidiary shall generally
     fail to pay, or admit in writing its inability to pay, its debts as they
     become due, or shall voluntarily commence any case or proceeding or file
     any petition under any bankruptcy, insolvency or similar law or seeking
     dissolution, liquidation or reorganization or the appointment of a
     receiver, trustee, custodian or liquidator for itself or a substantial
     portion of its property, assets or business or to effect a plan or other
     arrangement with its creditors (except the voluntary dissolution, not under
     any bankruptcy or insolvency law, of a Specified Subsidiary), or shall file
     any answer admitting the jurisdiction of the court and the material
     allegations of any involuntary petition filed against it in any bankruptcy,
     insolvency or similar case or proceeding, or shall be adjudicated bankrupt,
     or shall make a general assignment for the benefit of creditors, or shall
     consent to, or acquiesce in the appointment of, a receiver, trustee,
     custodian or liquidator for itself or a substantial portion of its
     property, assets or business, or (ii) corporate action shall be taken by
     the Company or any Specified Subsidiary for the purpose of effectuating any
     of the foregoing; or

         (f) involuntary proceedings or an involuntary petition shall be
     commenced or filed against the Company or any Specified Subsidiary under
     any bankruptcy, insolvency or similar law or seeking the dissolution,
     liquidation or reorganization of the Company or such Specified Subsidiary
     (as the case may be) or the appointment of a receiver, trustee, custodian
     or liquidator for the Company or such Specified Subsidiary (as the case may
     be) or of a substantial part of the property, assets or business of the
     Company or such Specified Subsidiary (as the case may be), or any writ,
     judgment, warrant of attachment, execution or similar process shall be
     issued or levied against a substantial part of the property, assets or
     business of the Company or any Specified Subsidiary, and such proceedings

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                                       65


     or petition shall not be dismissed, or such writ, judgment, warrant of
     attachment, execution or similar process shall not be released, vacated or
     fully bonded, within sixty (60) days after commencement, filing or levy, as
     the case may be; or

         (g) (i) the Company or any Specified Subsidiary shall default (as
     principal or guarantor or other surety) in the payment when due (subject to
     any applicable notice or grace period), whether at stated maturity or
     otherwise, of any principal of or interest on (howsoever designated) any
     indebtedness for borrowed money, whether such indebtedness now exists or
     shall hereafter be created, or (ii) an event of default (with respect to
     the Company or any Specified Subsidiary) as defined in any mortgage,
     indenture or instrument under which there may be issued, or by which there
     may be secured or evidenced, any indebtedness for borrowed money of, or
     guaranteed by, the Company or any Specified Subsidiary, whether such
     indebtedness now exists or shall hereafter be created, shall occur and
     shall permit such indebtedness to become due and payable prior to its
     stated maturity or due date; PROVIDED that no default under this subsection
     (g) shall be deemed to exist as a result of a default or event of default
     (as described in clause (i) or clause (ii) above) in respect of any such
     indebtedness (1) which is payable solely out of the property or assets of a
     partnership, joint venture or similar entity of which the Company or any
     Specified Subsidiary is a participant, or is secured by a mortgage on, or
     other security interest in, the property or assets owned or held by such
     entity, in either case without any further recourse to or liability of the
     Company or any Specified Subsidiary as a participant in such entity, or (2)
     if the principal of and interest on such indebtedness, when added to the
     principal of and interest on all other such indebtedness then in default
     (exclusive of indebtedness under clause (1) above), does not exceed
     $100,000,000; or

         (h) with respect to any Plan (other than a Multiemployer Plan) as to
     which the Company or any Related Person to the Company may have any
     liability, there shall exist an unfunded current liability under the Code
     which is material to the consolidated financial condition of the Company
     and its Consolidated Subsidi aries, and (x) steps are undertaken to
     terminate such Plan or (y) such Plan is terminated or (z) any Reportable
     Event which presents a material risk of termination with respect to such
     Plan shall occur;

then, and in any such event (x) if such event relates to the Company and is
described in clause (e) or clause (f) of this Section 8.01, (i) the Revolving
Credit Commitments shall immediately terminate, and (ii) all sums then owing by
the Company hereunder and under the Notes (and, in the event payment is to be
made on a day which is not the expiration date of the relevant Interest Period,
together with such amounts as will compensate each Bank in such Bank's sole
discretion for any losses incurred by it (or its lending branch or affiliate) in
respect of funds borrowed by it or deposited with it for the purpose of making
or maintaining its Loans hereunder) shall become and be immediately due and
payable, without presentment, demand, protest or notice of

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                                       66


any kind, all of which are hereby expressly waived by the Company, and (y) in
the case of any other such event, the Syndication Agent shall, at the direction
of the Required Banks, at the same or different times, take one or more of the
following actions: (i) declare the Revolving Credit Commitments to be
terminated, whereupon the Revolving Credit Commitments shall forthwith
terminate, or (ii) declare all sums then owing by the Company hereunder and
under the Notes to be forthwith due and payable, whereupon all such sums (and,
in the event payment is to be made on a day which is not the expiration date of
the relevant Interest Period, together with such amounts as will compensate each
Bank in such Bank's sole discretion for any losses incurred by it (or its
lending branch or affiliate) in respect of funds borrowed by it or deposited
with it for the purpose of making or maintaining its Loans hereunder) shall
become and be immediately due and payable without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived by the Company.
Promptly following the making of any such declaration, the Syndication Agent
shall give notice thereof to the Company and each Bank, but failure to do so or
any delay in so doing shall not impair the effect of such declaration.


                                   ARTICLE IX

                  THE AGENTS, THE MANAGING AGENTS AND THE BANKS

     SECTION 9.01. APPOINTMENT AND POWERS OF THE ADMINISTRATIVE AGENT AND THE
SYNDICATION AGENT. Each Bank hereby irrevocably designates and appoints each of
the Syndication Agent and the Administrative Agent its agent hereunder and
hereby authorizes each such Agent to take such action on its behalf and to
exercise such rights, remedies, powers and privileges hereunder as are
specifically authorized to be exercised by such Agent by the terms hereof,
together with such rights, remedies, powers and privileges as are reasonably
incidental thereto. Each of the Syndication Agent and the Administrative Agent
may execute any of its respective duties as such Agent hereunder by or through
agents or attorneys-in-fact and shall be entitled to retain counsel and to act
in reliance upon the advice of such counsel concerning all matters pertaining to
the agency hereby created and its duties hereunder, and shall not be liable for
the negligence or misconduct of any agents or attorneys-in-fact selected by it
with reasonable care. The Administrative Agent, the Syndication Agent, the
Co-Documentation Agents and the Managing Agents shall have no duties or
responsibilities to any Bank, except those expressly set forth in this
Agreement, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent,
the Syndication Agent, any Co-Documentation Agent or any Managing Agent.

     SECTION 9.02. EXCULPATORY PROVISIONS. No Bank, Agent or Managing Agent, nor
any of their respective directors, officers or employees shall be liable for any
action taken or omitted to be taken by them hereunder or in connection herewith,

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                                       67


except for their own gross negligence or wilful misconduct; nor shall any Bank,
Agent or Managing Agent be responsible in any manner to any Person for the
representations, warranties or other statements made by any other Person or for
the due execution or delivery, validity, effectiveness, genuineness, value,
sufficiency or enforceability against the Company or any other obligor of this
Agreement, the Notes or any other document furnished pursuant thereto or in
connection herewith. Neither the Agents, the Managing Agents nor any of their
respective officers shall be under any obligation to any Bank to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Company or any of its Subsidiaries.

     SECTION 9.03. RELIANCE BY THE ADMINISTRATIVE AGENT AND THE SYNDICATION
AGENT. Each of the Syndication Agent and the Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Company), independent accountants and other experts selected by any such Agent.
Each such Agent may deem and treat the payee of any Note as the owner thereof
for all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with such Agent. Each of the Syndication Agent and
the Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other documents executed and delivered in
connection herewith unless it shall first receive such advice or concurrence of
the Required Banks as it deems appropriate or it shall first be indemnified to
its satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Neither the Syndication Agent nor the Administrative Agent shall be liable to
any Bank for acting, or refraining from acting, under this Agreement or any
other documents executed and delivered in connection herewith in accordance with
a request of the Required Banks, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Banks and all
future holders of the Notes.

     SECTION 9.04. NOTICE OF DEFAULT. Neither the Syndication Agent nor the
Administrative Agent shall be deemed to have knowledge or notice of the
occurrence of any Event of Default or Unmatured Event of Default hereunder
unless it has received notice from a Bank or the Company referring to this
Agreement, describing such Event of Default or Unmatured Event of Default and
stating that such notice is a "notice of default". In the event that the
Syndication Agent or the Administrative Agent receives such a notice, it shall
give notice thereof to the Banks and to such other Agent. The Syndication Agent
shall take such action with respect to such Event of Default or Unmatured Event
of Default as shall be reasonably directed by

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                                       68


the Required Banks; PROVIDED, HOWEVER, that unless and until the Syndication
Agent shall have received such direction, the Syndication Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Event of Default or Unmatured Event of Default as it shall deem
advisable in the best interests of the Banks; PROVIDED FURTHER that the
Syndication Agent shall have the right, power and authority to take the
affirmative action specified in Section 8.01 hereof only upon the direction of
the Required Banks.

     SECTION 9.05. INDEMNIFICATION. Each Bank hereby agrees, in the ratio that
such Bank's Revolving Credit Commitment from time to time bears to the Total
Commitment from time to time, to indemnify and hold harmless each Agent and each
Managing Agent, as agents hereunder, from and against any and all losses,
liabilities (including liabilities for penalties), actions, suits, judgments,
demands, damages, costs and expenses (including, without limitation, attorneys'
fees and expenses) incurred or suffered by such Agent or Managing Agent in such
capacity as a result of any action taken or omitted to be taken by such Agent or
Managing Agent in such capacity or otherwise incurred or suffered by, made upon,
or assessed against such Agent or Managing Agent in such capacity; PROVIDED that
no Bank shall be liable for any portion of any such losses, liabilities
(including liabilities for penalties), actions, suits, judgments, demands,
damages, costs or expenses resulting from or attributable to gross negligence or
wilful misconduct on the part of such Agent or Managing Agent or its officers,
employees or agents. Without limiting the generality of the foregoing, each Bank
hereby agrees, in the ratio aforesaid, to reimburse each Agent and Managing
Agent promptly following its demand for any out-of-pocket expenses (including,
without limitation, attorneys' fees and expenses) incurred by such Agent or
Managing Agent hereunder and not reimbursed to such Agent or Managing Agent by
the Company. Each Bank's obligations under this paragraph shall survive the
termination of this Agreement or, if earlier, the termination of the Revolving
Credit Commitment of such Bank, and the discharge of the Company's obligations
hereunder.

     SECTION 9.06. NONRELIANCE ON THE AGENTS, THE MANAGING AGENTS AND OTHER
BANKS. Each Bank expressly acknowledges that neither any Agent, any Managing
Agent nor any of their respective officers, directors, employees, agents,
attorneys-in- fact or affiliates has made any representations or warranties to
it and that no act by any such Agent or Managing Agent hereafter taken,
including any review of the affairs of the Company, shall be deemed to
constitute any representation or warranty by such Agent or Managing Agent to any
Bank. Each Bank represents to each Agent and Managing Agent that it has,
independently and without reliance upon any Agent or Managing Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of the Company and
made its own decision to make its Loans hereunder and enter into this Agreement.
Each Bank also represents that it will, independently and without reliance upon
any Agent or Managing Agent or any other Bank, and based on such

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                                       69


documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Company.

     SECTION 9.07. THE AGENTS AND THE MANAGING AGENTS IN THEIR INDIVIDUAL
CAPACITIES. Each Agent and each Managing Agent and their affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Company as though such Agent or Managing Agent were not an Agent or Managing
Agent hereunder. With respect to its Loans made or renewed by it and any Note
issued to it, each Agent and Managing Agent shall have the same rights and
powers under this Agreement as any Bank and may exercise the same as though it
were not an Agent or Managing Agent, and the terms "Bank" and "Banks" shall
include each Agent and Managing Agent in its individual capacity.

     SECTION 9.08. EXCESS PAYMENTS. Except for payments made pursuant to Section
2.09, Section 2.13, Section 2.14 or Section 4.03 hereof, if any Bank or other
holder of a Note shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of offset or otherwise) on account of principal of
or interest on any Revolving Credit Note in excess of its PRO RATA share of
payments and other recoveries obtained by all Banks or holders on account of
principal of and interest on Revolving Credit Notes then held by them, such Bank
or other holder shall purchase from the other Banks or holders such
participation in the Revolving Credit Notes held by them as shall be necessary
to cause such purchasing Bank or holder to share the excess payment or other
recovery ratably with each of them; PROVIDED, HOWEVER, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Bank or holder, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest. The Company
agrees that any Bank or holder so purchasing a participation from another Bank
or holder pursuant to this Section 9.08 may, to the fullest extent permitted by
law, exercise all its rights of payment (including offset) with respect to such
participation as fully as if such Bank or holder were the direct creditor of the
Company in the amount of such participation.

     SECTION 9.09. OBLIGATIONS SEVERAL. The obligations of the Banks hereunder
are several, and neither any Bank nor the Agents or the Managing Agents shall be
responsible for the obligations of any other Person hereunder, nor will the
failure of any Bank to perform any of its obligations hereunder relieve the
Syndication Agent or the Administrative Agent or any other Bank from the
performance of its respective obligations hereunder. Nothing contained in this
Agreement, and no action taken by the Banks or any Agent or Managing Agent
pursuant hereto or in connection herewith or pursuant to or in connection with
the Notes, shall be deemed to constitute the Banks, together or with the Agents
and the Managing Agents, a partnership, association, joint venture or other
entity.

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     SECTION 9.10. RESIGNATION BY ANY AGENT OR MANAGING AGENT. Any Agent and any
Managing Agent may resign as such at any time upon at least 30 days' prior
notice to the Company and the Banks. In the event of such resignation by the
Syndication Agent or the Administrative Agent, the Required Banks (with the
consent of the Company (which shall not be unreasonably withheld) in the event
that there then does not exist an Event of Default or Unmatured Event of
Default), shall as promptly as practicable appoint a successor Syndication Agent
or Administrative Agent, as the case may be.


                                    ARTICLE X

                                  MISCELLANEOUS

     SECTION 10.01. NO WAIVER; MODIFICATIONS IN WRITING. No failure or delay on
the part of the Syndication Agent or the Administrative Agent or any Bank in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Syndication
Agent or the Administrative Agent or any Bank at law, in equity or otherwise.
Each request by the Company for any amendment, modification, supplement,
termination or waiver of or to any provision of this Agreement shall be directed
to the Syndication Agent, and no such amendment, modification, supplement,
termination or waiver of or to any provision of this Agreement, nor consent to
any departure by the Company therefrom, shall be effective unless the same shall
be in writing and signed by the Company and by or on behalf of the Syndication
Agent and the Required Banks; PROVIDED, HOWEVER, that no such amendment,
modification, supplement, termination, waiver or consent, as the case may be,
which has the effect of (x) reducing the rate or amount, or extending the stated
maturity or due date, of any sum payable by the Company to any Bank hereunder or
under such Bank's Notes, or (y) except as provided in Section 2.09(e)(ii),
Section 2.13(c)(i), Section 2.14(i), Section 4.03(b)(ii) and Section 10.06(c)
hereof, increasing the amount, or extending the stated expiration or termination
date, of any Bank's Revolving Credit Commitment hereunder, or (z) changing this
Section 10.01, Section 10.06 or Section 10.07 hereof or the definitions of the
terms "Allocable Share", "Applicable Facility Fee Percentage", "Applicable
Margin", "Event of Default", "Proportional Share", "Reference Bank", "Reference
Banks", "Required Banks", "Revolving Credit Commitment", "Total Commitment" and
"Unmatured Event of Default", or changing the designation of the "Required
Banks" as the Banks entitled to direct the Syndication Agent pursuant to Section
8.01 hereof shall be effective unless the same shall be signed by or on behalf
of each Bank; PROVIDED FURTHER that no such amendment, modification, supplement,
termination, waiver or consent, as the case may be, which has the effect of (x)
increasing the duties or obligations of any Agent or any Managing Agent

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hereunder, or (y) increasing the standard of care or performance required on the
part of any Agent or any Managing Agent hereunder, or (z) reducing or
eliminating the indemnities or immunities to which any Agent or Managing Agent
is entitled hereunder (including, without limitation, any amendment or
modification of this Section 10.01) shall be effective unless the same shall be
signed by or on behalf of the Agent or Managing Agent affected thereby. Any
waiver of any provision of this Agreement, and any consent to any departure by
the Company from the terms of any provision of this Agreement, shall be
effective only in the specific instance and for the specific purpose for which
given. No notice to or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances.

     SECTION 10.02. CONFIDENTIALITY. Each Bank shall maintain in confidence and
not publish, disseminate or disclose in any manner or to any Person and shall
not use (x) any material, nonpublic information relating to the Company and its
Subsidiaries or (y) any technical, nonfinancial information, data or know-how
which is identified in writing as confidential by the Company, in either case
which may be furnished pursuant to this Agreement, including any such
information which may be furnished pursuant to Article VI hereof (hereinafter
collectively called "CONFIDENTIAL INFORMATION"), subject to each Bank's (a)
obligation to disclose any such Confidential Information pursuant to a request
or order under applicable laws and regulations or pursuant to a subpoena or
other legal process, (b) right to disclose any such nontechnical or financial
Confidential Information to bank examiners, its affiliates, auditors, counsel,
other professional advisors, other Banks, and other banks or other entities in
connection with an offer by such Bank to sell a Participation to such other bank
or other entity or to make an assignment pursuant to Section 10.06(c) hereof,
(c) right to use any such Confidential Information in connection with the
transactions set forth herein, and (d) right to disclose any such Confidential
Information in connection with the transactions set forth herein or in
connection with any litigation or dispute involving the Banks and the Company or
any of its Subsidiaries or any transfer or other disposition by such Bank of any
of its loans or other extensions of credit to the Company or any of the
Company's Subsidiaries; PROVIDED, HOWEVER, that Confidential Information
disclosed pursuant to clause (b) or (d) of this sentence shall be so disclosed
subject to such procedures as are reasonably calculated to maintain the
confidentiality thereof; and PROVIDED FURTHER that Confi dential Information
disclosed pursuant to applicable laws, regulations, subpoenas or other legal
process shall be so disclosed subject to such confidentiality provisions, if
any, as may be provided under applicable law. The Banks agree, to the extent
permitted by applicable law, to use their best efforts promptly to notify the
Company in writing of each order, subpoena or other legal process providing for
the disclosure and/or production of Confidential Information and shall, to the
extent permitted by applicable law, use their best efforts promptly to supply
the Company with a copy of such order, subpoena or other legal process, in order
that the Company may intervene in the relevant administrative or legal
proceeding or take other appropriate legal action to protect the confidentiality
of such Confidential Information.

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Notwithstanding the foregoing provisions of this Section 10.02, (i) the
foregoing obligation of confidentiality shall not apply to any such Confidential
Information that was known to such Bank or any of its affiliates prior to the
time it received such Confidential Information from the Company or its
Subsidiaries pursuant to this Agreement, other than as a result of the
disclosure thereof by a Person who, to the knowledge or reasonable belief of
such Bank, was prohibited from disclosing it by any duty of confidentiality
arising (under this Agreement or otherwise) by contract or law, and (ii) the
foregoing obligation of confidentiality shall not apply to any such Confidential
Information that becomes part of the public domain independently of any act of
such Bank not permitted hereunder (through publication, the issuance of a patent
disclosing such information or otherwise) or when identical or substantially
similar information is received by such Bank without restriction as to its
disclosure or use, from a Person who, to the knowledge or reasonable belief of
such Bank, was not prohibited from disclosing it by any duty of confidentiality
arising (under this Agreement or otherwise) by contract or law. The obligations
of each Bank under this Section 10.02 shall survive the termination of this
Agreement or, if earlier, the termination of the Revolving Credit Commitment of
such Bank.

     SECTION 10.03. NOTICES, ETC. Except where telephonic instructions or
notices are authorized herein to be given, all notices, demands, instructions
and other communications required or permitted to be given to or made upon any
party hereto shall be in writing and (except for financial statements and other
documents to be furnished pursuant to Article VI hereof (with the exception of
notices of the occurrence of an Event of Default or an Unmatured Event of
Default which is continuing), which, if sent by mail, may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by registered or
certified mail, postage prepaid, return receipt requested, or by telecopier, and
shall be deemed to be given for purposes of this Agreement on the day that such
writing is delivered or sent to the intended recipient thereof in accordance
with the provisions of this Section 10.03. Unless otherwise specified in a
notice sent or delivered in accordance with the foregoing provisions of this
Section 10.03, notices, demands, instructions and other communications in
writing shall be given to or made upon the respective parties hereto at their
respective addresses (or to their respective telecopier numbers) indicated on
Schedule II hereto, and, in the case of telephonic instructions or notices, by
calling the telephone number or numbers indicated for such party on such
Schedule.

     Anything herein to the contrary notwithstanding, notices from the Company
pursuant to Sections 2.01, 2.02, 2.07, 2.09, 2.13, 2.14, 4.01, 4.02 and 4.03
hereof shall be effective, for the purposes of this Agreement, only when
actually received by all Persons to whom such notices are required to be sent or
given.

     SECTION 10.04. COSTS, EXPENSES AND TAXES. The Company agrees to pay all
costs and expenses of the Syndication Agent and the Administrative Agent in
connection with the arrangement of the credit facilities provided for herein and
the

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negotiation, preparation, printing, reproduction, execution and delivery of this
Agreement, the Notes, any amendments or modifications of (or supplements to) any
of the foregoing and any and all other documents furnished in connection with
the execution and delivery of this Agreement, including the reasonable fees and
out-of- pocket expenses of outside counsel to the Administrative Agent and the
Syndication Agent relative thereto (limited, however, to such fees and expenses
of only one outside counsel who shall represent the Administrative Agent and
Syndication Agent), and all costs and expenses (whether of the Syndication Agent
and the Administrative Agent or any Bank or otherwise and including, without
limitation, attorneys' fees and expenses), if any, in connection with the
enforcement of this Agreement, the Notes or any other agreement furnished
pursuant hereto or in connection herewith. In addition, the Company shall pay
all stamp, transfer and other transaction taxes payable or determined to be
payable in connection with the execution and delivery of this Agreement, and the
Company shall pay all such transaction taxes payable or determined to be payable
in connection with the issuance of the Notes or the making of any Loan by any
Bank, and the Company agrees to save and hold each Agent, each Managing Agent
and each Bank harmless from and against any and all liabilities with respect to
or resulting from any delay in paying or omission to pay such transaction taxes.
If any action, suit or proceeding arising from any of the foregoing is brought
against any Agent or any Managing Agent, any Bank, or any other Person
indemnified or intended to be indemnified pursuant to this Section 10.04, the
Company, to the extent and in the manner directed by the Person or Persons
indemnified or intended to be indemnified, will resist and defend such action,
suit or proceeding or cause the same to be resisted and defended by counsel
designated by the Company (which counsel shall be satisfactory to the Person or
Persons indemnified or intended to be indemnified). If the Company shall fail to
do any act or thing which it has covenanted to do hereunder or any
representation or warranty on the part of the Company contained herein shall be
breached, the Syndication Agent may (but shall not be obligated to) do the same
or cause it to be done or remedy any such breach, and may expend its funds for
such purpose. Any and all amounts so expended by the Syndication Agent shall be
repayable to it by the Company immediately upon the Syndication Agent's demand
therefor, with interest at a rate per annum (computed on the basis of a year
consisting of 365 or, when appropriate, 366 days) equal to the sum of (i) the
Alternate Base Rate in effect from time to time during the period from and
including the date so expended by such Agent to the date of repayment, PLUS (ii)
two percent (2%) per annum. The obligations of the Company under this Section
10.04 shall survive the termination of this Agreement and the discharge of the
Company's other obligations hereunder.

     SECTION 10.05. CONFIRMATIONS. The Company and each Bank agree from time to
time, upon written request received by one from the other, to confirm to the
other in writing the aggregate unpaid principal amount of the Loans of such Bank
then outstanding under the Note or Notes held by it, and each such Bank agrees
from time to time, upon written request received by it from the Company, to make
the

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Note or Notes held by it (including the schedule attached thereto) available for
reasonable inspection by the Company at the office of such Bank.

     SECTION 10.06. SUCCESSORS AND ASSIGNS; PARTICIPATIONS. (a) This Agreement
shall be binding upon and inure to the benefit of the Company, the Banks, the
Agents, the Managing Agents, and their respective successors and permitted
assigns; PROVIDED, HOWEVER, that any assignment or transfer by a Bank of any or
all of its rights hereunder shall not materially increase the amount which would
have been payable to the Bank making such assignment or transfer by the Company
under this Agreement and the Notes in the absence of such assignment or
transfer; and PROVIDED FURTHER that except in accordance with the provisions of
Section 6.02(a) hereof, the Company may not assign its rights hereunder or in
connection herewith or any interest herein without the prior written consent of
all of the Banks. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
each of their respective successors and permitted assigns.

     (b) Any Bank may without the consent of the Company sell participations to
one or more banks or other entities that, in the ordinary course of their
business, regularly extend credit of the types and in the amounts extended by
Banks under this Agreement (such banks and other entities hereinafter referred
to, collectively, as "Participants") in all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Revolving Credit Commitment and the Loan or Loans owing to it and
the Note or Notes held by it); PROVIDED, HOWEVER, that (i) such Bank's
obligations under this Agreement shall remain unchanged, (ii) such Bank shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the Participants shall be entitled to the cost
protection provisions contained in Section 2.09, Section 2.13, and Section 3.04
hereof (PROVIDED that no Participant shall be entitled to receive any greater
amount pursuant to such provisions than the transferor Bank would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Bank to such Participant had no such transfer occurred and
PROVIDED FURTHER that such Participant shall have fully complied with the
provisions of Section 10.06(g) hereof) and the cost protection provisions of
Section 2.13 hereof shall be applied by assuming that such Bank did not sell any
participation to any Participant, (iv) the Company, the Agents, the Managing
Agents and the other Banks shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this Agreement
and in connection with the cost protection provisions of this Agreement to which
any Participant is entitled pursuant to this Sec tion 10.06(b), (v) such Bank
shall retain the sole right and responsibility to enforce the obligations of the
Company relating to the Loans, (vi) such Bank shall not, except with respect
only to changes in the amount of the Revolving Credit Commitment of such Bank,
or the principal amount of its Loans outstanding or the Interest Rate or
Interest Period with respect thereto, or the amount of any fees payable to it
hereunder or extension of the Maturity Date, enter into any agreement with any
Participant that

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would require the consent of such Participant with respect to the exercise by
such Bank of its voting rights under this Agreement, and (vii) each such sale
shall be made in the ordinary course of such Bank's commercial banking business
and in compliance with all applicable laws.

     (c) Any Bank may assign, with the prior written consent of the Company and
the Administrative Agent (which consent shall not unreasonably be withheld) and
after using reasonable efforts to identify an Eligible Assignee reasonably
acceptable to the Company, to one or more Eligible Assignees, or without the
consent of the Company or the Administrative Agent to one or more Banks, all or
a portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of its Revolving Credit
Commitment and the same portion of the applicable Loan or Loans at the time
owing to it and the applicable Note or Notes held by it, other than any
Competitive Notes held by it, which may, but need not, be assigned); PROVIDED,
HOWEVER, that (i) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Bank's rights and obligations under
this Agreement, the Loan or Loans at the time owing to such assigning Bank and
the Note or Notes held by it, other than any Competitive Notes held by it, which
may, but need not, be assigned, (ii) except in the case of an assignment of a
Bank's entire interest hereunder, the amount of the Revolving Credit Commitment
of the assigning Bank which it retains shall be in a principal amount of not
less than $15,000,000 and the amount of such Revolving Credit Commitment which
it assigns (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall be an
integral multiple of $5,000,000; PROVIDED, HOWEVER, that no assignment may be
made that, taken together with any simultaneous assignments, would result in any
Bank having a Revolving Credit Commitment which is less than $15,000,000, (iii)
the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance with respect to such assignment, together with any
Note or Notes subject to such assignment and a processing and recordation fee of
(A) $1,000 in the case of an assignment to any Bank and (B) $2,500 in all other
cases (except that such fee shall not be payable if the Eligible Assignee is an
affiliate of the assignor Bank), (iv) each such assignment shall be made in the
ordinary course of the assigning Bank's commercial banking business and in
compliance with all applicable laws, (v) no such assignment shall be effective
unless the Eligible Assignee to which such assignment is made has fully complied
with the provisions of Section 10.06(g) hereof, and (vi) the Company shall have
received a copy of the Assignment and Acceptance signed by the parties thereto.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, (x) the
Eligible Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Bank
hereunder, (y) the assignor Bank thereunder shall, to the extent provided in
such Assignment and Acceptance, be released (except as provided in Section
2.13(b), Section 10.02 and Section 10.07 hereof) from its

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obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Bank's rights
and obligations under this Agreement, such Bank shall cease to be a party
hereto), and (z) Schedule I and Schedule II hereto shall be deemed amended to
reflect the addition of such Eligible Assignee and the decrease in the Revolving
Credit Commitment of the assignor Bank. Each assignee of an interest under this
Agreement and any Note shall take such interest subject to any request made,
waiver or consent given or other action taken hereunder prior to the effective
date of the Assignment and Acceptance related to such assignment, and, until the
effective date of such Assignment and Acceptance, the Syndication Agent, the
Administrative Agent and the Company shall be entitled conclusively to assume
that no assignment of any interest under this Agreement and any Note has been
made by any Bank or any assignee. Notwithstanding any other provision of this
Section 10.06, any Bank may at any time assign all or any portion of its rights
under this Agreement and the Note or Notes held by it to a Federal Reserve Bank;
PROVIDED that no such assignment shall release a Bank from any of its
obligations hereunder.

     (d) By executing and delivering an Assignment and Acceptance, the assignor
Bank and the Eligible Assignee thereunder confirm to and agree with each other
and the other parties hereto as follows: (i) the assignor Bank represents and
warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, (ii) such assignor Bank
makes no representation or warranty, and assumes no responsibility with respect
to any statements, warranties or representations made by the Company, in or in
connection with this Agreement or with the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto, (iii) such assignor Bank makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or the performance or observance by the
Company of its obligations under this Agreement or any other instrument or
document furnished pursuant hereto, (iv) such Eligible Assignee confirms that it
has received a copy of this Agreement together with copies of the financial
statements and other documents referred to in Section 5.01(e), Section 6.01(a)
(i), Section 6.01(a)(ii) and Section 6.01(a)(v) hereof and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance, (v) such Eligible
Assignee will, independently and without reliance upon any Agent or any Managing
Agent, such assignor Bank or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement, (vi) such
Eligible Assignee appoints and authorizes each of the Syndication Agent and the
Administrative Agent to take such action as such Agent on its behalf and to
exercise such powers under this Agreement as are delegated to such Agent by the
terms hereof, together with such powers as are reasonably incidental thereto,
(vii) such Eligible Assignee agrees that it will perform all of the obligations,
in accordance with the terms thereof, of the assignor Bank under this Agreement
which are assumed by

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such Eligible Assignee under such Assignment and Acceptance, and (viii) such
Eligible Assignee confirms that it is an Eligible Assignee.

     (e) The Administrative Agent shall maintain at its address listed on
Schedule II hereto a copy of each Assignment and Acceptance delivered to it and
a register for the recordation of the names and addresses of the Banks and the
Revolving Credit Commitment of, and principal amount of the Loans owing to, each
Bank from time to time (the "REGISTER"). The entries in the Register shall be
conclusive, in the absence of manifest error, and the Company, the Agents, the
Managing Agents and the Banks may treat each person whose name is recorded in
the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Company or any Bank at any
reasonable time and from time to time upon reasonable prior notice.

     (f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an Eligible Assignee, together with any Note or Notes subject
to such assignment and the written consent of the Company to such assignment,
the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is precisely in the form of Exhibit G hereto (or as agreed upon by
the Company and the Administrative Agent), (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register, (iii)
give prompt notice thereof to the Company, and (iv) deliver a copy of such
Assignment and Acceptance to the Syndication Agent and the Company. Within five
Business Days after receipt of such Assignment and Acceptance, the Company, at
its own expense, shall execute and deliver to the Administrative Agent in
exchange for the surrendered Note or Notes a new Note or Notes to the order of
such Eligible Assignee in an amount equal to its portion of the Revolving Credit
Commitment assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Bank has retained any Revolving Credit Commitment hereunder, a new
Note or Notes to the order of the assigning Bank in an amount equal to the
Revolving Credit Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A-1 or Exhibit A-2 hereto, as appropriate. The Notes surrendered by
the assigning Bank shall be marked "canceled" and returned by the Administrative
Agent to the Company.

     (g) If, pursuant to this Section 10.06, any interest in this Agreement, any
Loan or any Note is transferred to any Participant (a "Transferee") which is
organized under the laws of any jurisdiction other than the United States or any
state thereof, the transferor Bank shall cause such Transferee, concurrently
with the effectiveness of such transfer, (i) to represent to the transferor Bank
(for the benefit of the transferor Bank, the Administrative Agent and the
Company) that under applicable law and treaties no taxes will be required to be
withheld by the Administrative Agent, the Company or the transferor Bank with
respect to any payments to be made to such

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Transferee in respect of the Loans, (ii) to furnish to the transferor Bank in
duplicate, for each taxable year of such Transferee during which interest
arising under or in connection with this Agreement is received, and before
payment by the Company of any such interest during such year (or at any other
time as required under United States income tax law), a properly completed and
executed copy of either Internal Revenue Service Form W-8BEN or Internal Revenue
Service Form W-8ECI or Internal Revenue Service Form W-9 and any additional form
(or such other form) as is necessary to claim complete exemption from United
States withholding taxes (wherein such Transferee claims entitlement to complete
exemption from United States withholding taxes on all payments hereunder), (iii)
to agree (for the benefit of the transferor Bank, the Administrative Agent and
the Company) to provide to the transferor Bank a new Internal Revenue Service
Form W-8BEN or Internal Revenue Service Form W-8ECI or Internal Revenue Service
Form W-9 and any such additional form (or any successor form or forms) upon the
expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable United States laws and regulations and
amendments duly executed and completed by such Transferee, and to comply from
time to time with all applicable United States laws and regulations with regard
to such withholding tax exemption, and (iv) to represent to the transferor Bank
(for the benefit of the transferor Bank, the Administrative Agent and the
Company) that the form or forms so filed will be true and complete.

     SECTION 10.07. INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by the Banks and the agreement to extend and maintain
the credit provided hereunder, the Company hereby agrees to indemnify, exonerate
and hold each of the Banks, the Agents, the Managing Agents, and each of the
officers, directors, employees and agents of each of the Banks, the Agents and
the Managing Agents, and each Person, if any, who controls any such Bank, such
Agent or any such Managing Agent, or any such officer, director, employee or
agent, within the meaning of the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended (herein collectively called the
"INDEMNITEES" and individually called an "INDEMNITEE"), free and harmless from
and against any and all actions, claims, causes of action, suits, losses,
liabilities, damages and expenses, including without limitation, reasonable
attorneys' fees and disbursements (herein collectively called the "INDEMNIFIED
LIABILITIES"), which may be incurred by or asserted against the Indemnitees or
any Indemnitee as a result of, or arising out of, or relating to, or in
connection with, any investigation, litigation or proceeding related to (i) any
use made or proposed to be made by the Company of the proceeds of any Loan, (ii)
the consummation of the transactions contemplated by any such use or proposed
use, (iii) any untrue statement or alleged untrue statement of any material fact
made by the Company in connection therewith, or (iv) the omission or alleged
omission by the Company to state in connection therewith a material fact
required to be so stated or necessary to make the statements made, in light of
the circumstances under which they were made, not misleading, whether or not any
such Indemnitee is a party thereto, and, to the extent that the foregoing
undertaking may be unen-

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forceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law; PROVIDED, HOWEVER, that
there shall be no right to indemnification or contribution under this Section
10.07 for Indemnified Liabilities based upon or arising out of actions or
omissions by any Bank in a capacity other than that of a lender to the Company
or by any Agent or any Managing Agent in its capacity other than that as agent
for the Banks hereunder. Each Indemnitee will use its best efforts to promptly
notify the Company of each event of which it has knowledge which may give rise
to a claim under the indemnification provisions of this Section 10.07. If any
action, suit or proceeding arising from any of the foregoing is brought against
any Agent or any Managing Agent, any Bank or any other Person indemnified or
intended to be indemnified pursuant to this Section 10.07, the Company, to the
extent and in the manner directed by the Person or Persons indemnified or
intended to be indemnified, will resist and defend such action, suit or
proceeding or cause the same to be resisted and defended by counsel designated
by the Company (which counsel shall be reasonably satisfactory to the Person or
Persons indemnified or intended to be indemnified). Each Indemnitee will use its
best efforts to cooperate in the defense of any such action, suit or proceeding.
If the Company shall fail to do any act or thing which it has covenanted to do
hereunder or any representation or warranty on the part of the Company contained
herein shall be breached, the Syndication Agent may (but shall not be obligated
to) do the same or cause it to be done or remedy any such breach, and may expend
its funds for such purpose. Any and all amounts so expended by the Syndication
Agent shall be repayable to it by the Company immediately upon the Syndication
Agent's demand therefor, with interest at a rate per annum (computed on the
basis of a year consisting of 365 or, when appropriate, 366 days) equal to the
sum of (i) the Alternate Base Rate in effect from time to time during the period
from and including the date so expended by the Syndication Agent to the date of
repayment, PLUS (ii) two percent (2%) per annum. The Company shall have no
obligation to any Indemnitee under this Section 10.07 to the extent that
Indemnified Liabilities result from gross negligence or wilful misconduct on the
part of such Indemnitee. The obligations of the Company under this Section 10.07
shall survive the termination of this Agreement and the discharge of the
Company's other obligations hereunder. The obligations of each Bank (and of each
other Indemnitee with respect to such Bank) under this Section 10.07 shall
survive the termination of this Agreement or, if earlier, the termination of the
Revolving Credit Commitment of such Bank.

     SECTION 10.08. REFERENCE BANKS. Each Reference Bank agrees to use its best
efforts to furnish quotations to the Administrative Agent as contemplated hereby
by 10:30 a.m., New York City time, on the day such quotations are required to be
furnished hereunder. If any Reference Bank does not furnish a timely quotation,
the Administrative Agent shall determine the relevant Eurodollar Rate, Term
Federal Funds Rate or Certificate of Deposit Rate, as the case may be, on the
basis of the quotations, if any, furnished by the remaining Reference Banks and,
in the event that all Reference Banks fail to so furnish a quotation, on the
basis of such other

[NYCorp;1203895.1]

                                       80


information as the Administrative Agent in its sole discretion shall deem
appropriate. If any Reference Bank assigns its Notes to an unaffiliated
institution, the Administrative Agent shall, in consultation with the Company,
and with the consent of the Required Banks, appoint another Bank to act as a
Reference Bank hereunder. If the Company is entitled to replace any Bank (which
is also a Reference Bank) as provided in Section 2.09(e), Section 2.13(c),
Section 2.14 or Section 4.03(b) hereof, the Company may, in consultation with
the Administrative Agent, and with the consent of the Required Banks, appoint a
replacement Reference Bank.

     SECTION 10.09. HEADINGS. Article and Section headings used in this
Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.

     SECTION 10.10. CIRCUMSTANCES REQUIRING CONSULTATION. In the event that (i)
additional amounts have become payable to an Affected Bank as a result of the
occurrence of circumstances referred to in Section 2.09 hereof, (ii) any
Affected Bank shall have made a determination pursuant to Section 4.03(a)
hereof, or (iii) additional amounts have become payable to any Bank or any
Participant pursuant to Section 2.13 hereof, then, and in any such event, such
Affected Bank, Bank or Participant, as the case may be, shall promptly consult
with the Administrative Agent and the Company in order to endeavor, and such
Affected Bank, Bank or Participant, as the case may be, shall use its best
efforts, to take such action as, in the good faith judgment of such Affected
Bank, Bank or Participant, is then reasonable and practicable under the
circumstances (including, without limitation, changing the location of its
lending office or participating office, as the case may be, in order to move the
situs of such Affected Bank's or Bank's Loans or such Participant's
participation to another jurisdiction, if possible without material liability,
cost or expense to such Affected Bank, Bank or Participant and without material
reduction to such Affected Bank or Bank of any amount otherwise receivable by
such Affected Bank or Bank under this Agreement and such Affected Bank's or
Bank's Notes or receivable by such Participant under its participation) to
mitigate or eliminate the effect of such event. In addition, in the event that
(i) any Bank or Participant shall, as a result of reserves maintained by such
Bank or Participant with any Federal Reserve Bank of the United States in
connection with any of the Loans or participations, be entitled to receive, and
receive, amounts from such Federal Reserve Bank (in the form of interest or
otherwise) in respect of such reserves, or (ii) any Bank or Participant shall
receive any similar (or other) benefit as a result of actions taken by such Bank
or Participant with respect to any Capital Adequacy Rule, then, and in any such
event, such Bank or Participant shall promptly consult with the Administrative
Agent and the Company in order to endeavor, and such Bank or Participant shall
use its best efforts, to take such action as, in the good faith judgment of such
Bank or Participant, is then reasonable and practicable under the circumstances
to give the benefit of such amounts or benefits to the Company.

[NYCorp;1203895.1]

                                       81


     SECTION 10.11. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.

     SECTION 10.12. GOVERNING LAW. THIS AGREEMENT AND EACH NOTE SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL
PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

     SECTION 10.13. CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF
JURY TRIAL. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE COMPANY WITH RESPECT TO
THIS AGREEMENT OR ANY NOTE MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE CITY OF NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE COMPANY ACCEPTS, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT FROM WHICH NO APPEAL HAS BEEN
TAKEN OR IS AVAILABLE. THE COMPANY IRREVOCABLY AGREES THAT ALL PROCESS IN ANY
SUCH PROCEEDINGS IN ANY SUCH COURT MAY BE EFFECTED BY MAILING A COPY THEREOF BY
REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL),
POSTAGE PREPAID, TO IT AT ITS ADDRESS SET FORTH ON SCHEDULE II HERETO OR AT SUCH
OTHER ADDRESS OF WHICH THE SYNDICATION AGENT SHALL HAVE BEEN NOTIFIED PURSUANT
HERETO, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY THE COMPANY TO BE EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT. EACH OF THE COMPANY, THE AGENTS, THE
MANAGING AGENTS AND THE BANKS IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION
OR PROCEEDING IN ANY SUCH JURISDICTION. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR LIMIT THE RIGHT
OF ANY BANK TO BRING PROCEEDINGS AGAINST THE COMPANY IN THE COURT OF ANY OTHER
COMPETENT JURISDICTION.

[NYCorp;1203895.1]

                                       82


     SECTION 10.14. SEVERABILITY OF PROVISIONS. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

     SECTION 10.15. WAIVER OF CERTAIN PROVISIONS UNDER THE EXISTING CREDIT
AGREEMENT. Each Bank which is also a party to the Existing Credit Agreement
(whether acting in its capacity as a bank or an agent thereunder) and the
Company (i) hereby agree that on the Effective Date the commitments under the
Existing Credit Agreement shall be terminated, and the loans, if any,
outstanding thereunder, and accrued interest thereon, and any accrued facility
fee, shall be prepaid by the Company, and (ii) hereby waive any provisions of
the Existing Credit Agreement which would require a longer notice period or a
different type of notice.

     SECTION 10.16.  PROCEDURES RELATING TO ADDENDUM.  On or prior to the
Effective Date a bank may deliver an Addendum in accordance with the provisions
of this Section 10.16.

     (a) BANKS LISTED ON THE SIGNATURE PAGES. A bank listed on the signature
pages hereto may become a party hereto, and may increase or decrease the amount
of its Revolving Credit Commitment as set forth opposite its name on Schedule I
hereto by delivering an Addendum, appropriately completed and duly executed, to
the Company. Upon acceptance of such Addendum by the Company, such bank shall
become a party to this Agreement as a Bank with the Revolving Credit Commitment
set forth in such Addendum with the same effect as if such bank had executed
this Agreement by signing on the signature pages hereto.

     (b) BANKS NOT LISTED ON SIGNATURE PAGES. A bank not listed on the signature
pages to this Agreement may become a party hereto by delivering an Addendum,
appropriately completed and duly executed, to the Company. Upon acceptance of
such Addendum by the Company, such bank shall become a party to this Agreement
as a Bank with the Revolving Credit Commitment set forth in such Addendum with
the same effect as if such bank had executed this Agreement by signing on the
signature pages hereto.

     (c) AUTOMATIC AMENDMENT OF THE AGREEMENT. Upon acceptance by the Company of
an Addendum conforming to the requirements of this Section 10.16, Schedule I and
Schedule II hereto shall be amended automatically to reflect the changes in
Revolving Credit Commitments and other information set forth in such Addendum.

     (d) NOTIFICATION OF ADMINISTRATIVE AGENT, ETC. The Company shall notify the
Administrative Agent promptly of the Company's acceptance of any Addendum and

[NYCorp;1203895.1]

                                       83


shall furnish the Administrative Agent copies of the same.  The Company may not
accept an Addendum after the Effective Date.

     SECTION 10.17. MAXIMUM INTEREST. Nothing contained in this Agreement shall
be deemed to establish or require the payment of interest at a rate in excess of
the maximum rate permitted by applicable law. In the event that the rate of
interest required to be paid to any of the Banks under this Agreement exceeds
the maximum rate permitted by applicable law, the rate of interest required to
be paid to such Banks hereunder shall be automatically reduced to the maximum
rate permitted by applicable law.

     SECTION 10.18. SPECIAL TERMINATION PROVISION. If the Effective Date has not
occurred on or prior to January 15, 2001, then the obligations of the Banks
hereunder shall terminate and this Agreement shall cease to be binding upon the
parties hereto,

[NYCorp;1203895.1]

                                       84


except that the obligations of the Company under Section 10.04 and Section 10.07
hereof shall survive such termination.


     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.




                           OCCIDENTAL PETROLEUM CORPORATION,


                                 By /s/       Michael P. Miller
                                    --------------------------------------------
                                     Name:    Michael P. Miller
                                     Title:   Senior Assistant Treasurer


                           THE CHASE MANHATTAN BANK, in its individual
                              capacity and as Syndication Agent,


                                 By /s/       Robert C. Mertensotto
                                    --------------------------------------------
                                     Name:    Robert C. Mertensotto
                                     Title:   Managing Director


                           THE BANK OF NOVA SCOTIA, in its individual
                              capacity and as Administrative Agent,


                                 By /s/       M. Van Otterloo
                                    --------------------------------------------
                                     Name:    M. Van Otterloo
                                     Title:   Managing Director


                           BANK OF AMERICA, N.A., in its individual capacity
                              and as Co-Documentation Agent,


                                 By /s/       Claire M. Liu
                                    --------------------------------------------
                                     Name:    Claire M. Liu
                                     Title:   Managing Director


[NYCorp;1203895.1]

                                       85


                           ABN AMRO BANK N.V., in its individual capacity and
                              as Co-Documentation Agent,


                                 By /s/       William M. Guilford
                                    --------------------------------------------
                                     Name:    William M. Guilford
                                     Title:   Senior Vice President

                                 By /s/       Dana L. Montgomery
                                    --------------------------------------------
                                     Name:    Dana L. Montgomery
                                     Title:   Assistant Vice President


[NYCorp;1203895.1]

                                       86


                           BANK ONE, NA, in its individual capacity and as a
                              Managing Agent,


                                 By /s/       Jeanie Harman
                                    --------------------------------------------
                                     Name:    Jeanie Harman
                                     Title:   First Vice President


[NYCorp;1203895.1]

                                       87


                           THE BANK OF NEW YORK, in its individual capacity
                              and as a Managing Agent,


                                 By /s/       Raymond J. Palmer
                                    --------------------------------------------
                                     Name:    Raymond J. Palmer
                                     Title:   Vice President


[NYCorp;1203895.1]

                                       88





                           BAYERISCHE LANDESBANK GIROZENTRALE,
                              CAYMAN ISLANDS BRANCH, in its individual
                              capacity and as a Managing Agent,


                                 By /s/       Peter Obermann
                                    --------------------------------------------
                                     Name:    Peter Obermann
                                     Title:   Senior Vice President

                                 By /s/       James Boyle
                                    --------------------------------------------
                                     Name:    James Boyle
                                     Title:   Vice President


[NYCorp;1203895.1]

                                       89


                           BNP PARIBAS, in its individual capacity and as a
                              Managing Agent,


                                 By /s/       Brian M. Malone
                                    --------------------------------------------
                                     Name:    Brian M. Malone
                                     Title:   Director

                                 By /s/       Larry Robinson
                                    --------------------------------------------
                                     Name:    Larry Robinson
                                     Title:   Vice President


[NYCorp;1203895.1]

                                       90


                           CITICORP USA, INC., in its individual capacity and as
                              a Managing Agent,


                                 By /s/       Henry J. Matthews
                                    --------------------------------------------
                                     Name:    Henry J. Matthews
                                     Title:   Vice President


[NYCorp;1203895.1]

                                       91


                           COMMERZBANK AG, NEW YORK AND GRAND CAYMAN
                              BRANCHES, each in its individual capacity
                              and as a Managing Agent,


                                 By /s/       Christian Jagenberg
                                    --------------------------------------------
                                     Name:    Christian Jagenberg
                                     Title:   SVP and Manager

                                 By /s/       Steven F. Larsen
                                    --------------------------------------------
                                     Name:    Steven F. Larsen
                                     Title:   SVP


[NYCorp;1203895.1]

                                       92




                           CREDIT LYONNAIS NEW YORK BRANCH, in its
                              individual capacity and as a Managing Agent,


                                 By /s/       Philippe Soustra
                                    --------------------------------------------
                                     Name:    Philippe Soustra
                                     Title:   Senior Vice President


[NYCorp;1203895.1]

                                       93


                           CREDIT SUISSE FIRST BOSTON, in its individual
                              capacity and as a Managing Agent,


                                 By /s/       James P. Moran
                                    --------------------------------------------
                                     Name:    James P. Moran
                                     Title:   Director

                                 By /s/       David W. Kratovil
                                    --------------------------------------------
                                     Name:    David W. Kratovil
                                     Title:   Director


[NYCorp;1203895.1]

                                       94


                           THE INDUSTRIAL BANK OF JAPAN, LIMITED, in
                              its individual capacity and as a Managing Agent,


                                 By /s/       Carl-Eric Benzinger
                                    --------------------------------------------
                                     Name:    Carl-Eric Benzinger
                                     Title:   Senior Vice President &
                                              Senior Deputy General Manager


[NYCorp;1203895.1]

                                       95


                           NATIONAL WESTMINSTER BANK PLC, NEW
                              YORK BRANCH, in its individual capacity and as a
                              Managing Agent,


                                 By /s/       Keith Johnson
                                    --------------------------------------------
                                     Name:    Keith Johnson
                                     Title:   Senior Vice President


                           NATIONAL WESTMINSTER BANK PLC, NASSAU
                              BRANCH, in its individual capacity and as a
                              Managing Agent,


                                 By /s/       Keith Johnson
                                    --------------------------------------------
                                     Name:    Keith Johnson
                                     Title:   Senior Vice President


[NYCorp;1203895.1]

                                       96


                           SOCIETE GENERALE, in its individual capacity and
                              as a Managing Agent,


                                 By /s/       David Bird
                                    --------------------------------------------
                                     Name:    David Bird
                                     Title:   Vice President


[NYCorp;1203895.1]

                                       97


                           FLEET NATIONAL BANK,


                                 By /s/       Sarah P.Z. Dwyer
                                    --------------------------------------------
                                     Name:    Sarah P.Z. Dwyer
                                     Title:   Vice President


[NYCorp;1203895.1]

                                       98


                           MELLON BANK, N.A.,


                                 By /s/       Mark W. Rogers
                                    --------------------------------------------
                                     Name:    Mark W. Rogers
                                     Title:   Vice President


[NYCorp;1203895.1]

                                       99


                           RIYAD BANK, HOUSTON AGENCY,


                                 By /s/       Paul N. Travis
                                    --------------------------------------------
                                     Name:    Paul N. Travis
                                     Title:   Vice President & Head of Marketing

                                 By /s/       Richard P. Zimpfer, II
                                    --------------------------------------------
                                     Name:    Richard P. Zimpfer, II
                                     Title:   Vice President & Controller


[NYCorp;1203895.1]

                                       100


                           ARAB BANK PLC,


                                 By /s/       Samer Tamimi
                                    --------------------------------------------
                                     Name:    Samer Tamimi
                                     Title:   VP


[NYCorp;1203895.1]

                                       101


                           BANCA DI ROMA, SAN FRANCISCO BRANCH,


                                 By /s/       Richard G. Dietz
                                    --------------------------------------------
                                     Name:    Richard G. Dietz (# 97271)
                                     Title:   Vice President

                                 By /s/       Thomas C. Woodruff
                                    --------------------------------------------
                                     Name:    Thomas C. Woodruff (# 97969)
                                     Title:   Vice President


[NYCorp;1203895.1]

                                       102


                           BBL INTERNATIONAL (U.K.) LIMITED,


                                 By /s/       C.F. Wright
                                    --------------------------------------------
                                     Name:    C.F. Wright
                                     Title:   Authorised Signatory

                                 By /s/       G.A. Michael
                                    --------------------------------------------
                                     Name:    G.A. Michael
                                     Title:   Authorised Signatory


[NYCorp;1203895.1]

                                       103


                           KBC BANK N.V.,


                                 By /s/       Jean-Pierre Diels
                                    --------------------------------------------
                                     Name:    Jean-Pierre Diels
                                     Title:   First Vice President

                                 By /s/       Michael V. Curran
                                    --------------------------------------------
                                     Name:    Michael V. Curran
                                     Title:   Vice President


[NYCorp;1203895.1]

                                       104


                           THE SAKURA BANK, LIMITED,


                                 By /s/       Mr. Yoshikazu Nagura
                                    --------------------------------------------
                                     Name:    Mr. Yoshikazu Nagura
                                     Title:   Senior Vice President


[NYCorp;1203895.1]

                                       105


                           THE TOKAI BANK, LIMITED,


                                 By /s/       Shinichi Nakatani
                                    --------------------------------------------
                                     Name:    Shinichi Nakatani
                                     Title:   Assistant General Manager


[NYCorp;1203895.1]

                                       106


                           TORONTO DOMINION (TEXAS), INC.,


                                 By /s/       Carol Brandt
                                    --------------------------------------------
                                     Name:    Carol Brandt
                                     Title:   Vice President


[NYCorp;1203895.1]

                                       107


                           UBS AG, STAMFORD BRANCH,


                                 By /s/       Dorothy L. McKinley
                                    --------------------------------------------
                                     Name:    Dorothy L. McKinley
                                     Title:   Director
                                              Banking Products Services, US

                                 By /s/       Thomas R. Salzano
                                    --------------------------------------------
                                     Name:    Thomas R. Salzano
                                     Title:   Director
                                              Banking Products Services, US


[NYCorp;1203895.1]

                                       108



                           UNION BANK OF CALIFORNIA, N.A.,


                                 By /s/       Dustin Gaspari
                                    --------------------------------------------
                                     Name:    Dustin Gaspari
                                     Title:   Vice President


[NYCorp;1203895.1]

                                       109


                           THE SANWA BANK LIMITED,


                                 By /s/       Toshiko Boyd
                                    --------------------------------------------
                                     Name:    Toshiko Boyd
                                     Title:   Vice President


[NYCorp;1203895.1]

                                       110


                           THE DAI-ICHI KANGYO BANK, LTD.,


                                 By /s/       Bertram H. Tang
                                    --------------------------------------------
                                     Name:    Bertram H. Tang
                                     Title:   Vice President & Group Leader


[NYCorp;1203895.1]

                                       111


                           THE FUJI BANK, LIMITED,


                                 By /s/       Shinzo Nishitate
                                    --------------------------------------------
                                     Name:    Shinzo Nishitate
                                     Title:   Senior Vice President


[NYCorp;1203895.1]

                                       112



                           THE SUMITOMO BANK, LIMITED,


                                 By /s/       Al Galluzzo
                                    --------------------------------------------
                                     Name:    Al Galluzzo
                                     Title:   Senior Vice President


[NYCorp;1203895.1]

                                       113


                                                                   SCHEDULE I TO
                                                      FIVE-YEAR CREDIT AGREEMENT


                              AMOUNT OF COMMITMENTS



                                                                   AMOUNT OF
                                                                   REVOLVING
                                                                     CREDIT
NAME OF BANK                                                       COMMITMENT
- ------------                                                       ----------

THE CHASE MANHATTAN BANK                                         $   61,250,000

ABN AMRO BANK N.V.                                               $   61,250,000

BANK OF AMERICA, N.A.                                            $   61,250,000

THE BANK OF NOVA SCOTIA                                          $   61,250,000

BANK ONE, NA                                                     $   40,000,000

THE BANK OF NEW YORK                                             $   40,000,000

BAYERISCHE LANDESBANK                                            $   40,000,000

GIROZENTRALE, CAYMAN
ISLANDS BRANCH

BNP PARIBAS                                                      $   40,000,000

CITICORP USA, INC.                                               $   40,000,000

COMMERZBANK AG, NEW                                              $   40,000,000
YORK BRANCH

CREDIT LYONNAIS NEW YORK                                         $   40,000,000
BRANCH

CREDIT SUISSE FIRST BOSTON                                       $   40,000,000

NATIONAL WESTMINSTER                                             $   40,000,000
BANK PLC, NEW YORK BRANCH

SOCIETE GENERALE                                                 $   40,000,000

FLEET NATIONAL BANK                                              $   30,000,000

THE INDUSTRIAL BANK OF                                           $   30,000,000
JAPAN, LIMITED

MELLON BANK, N.A.                                                $   30,000,000


[NYCorp;1203895.1]


                                                                   AMOUNT OF
                                                                   REVOLVING
                                                                     CREDIT
NAME OF BANK                                                       COMMITMENT
- ------------                                                       ----------
RIYAD BANK, HOUSTON                                              $   30,000,000
AGENCY

ARAB BANK PLC                                                    $   20,000,000

BANCA DI ROMA, SAN                                               $   20,000,000
FRANCISCO BRANCH

BBL INTERNATIONAL (U.K.)                                         $   20,000,000
LIMITED

KBC BANK N.V.                                                    $   20,000,000

THE SAKURA BANK, LIMITED                                         $   20,000,000

THE TOKAI BANK, LIMITED                                          $   20,000,000

TORONTO DOMINION (TEXAS),                                        $   20,000,000
INC.

UBS AG, STAMFORD BRANCH                                          $   20,000,000

UNION BANK OF CALIFORNIA,                                        $   20,000,000
N.A.

THE DAI-ICHI KANGYO BANK,                                        $   15,000,000
LTD.

THE FUJI BANK, LIMITED, LOS                                      $   15,000,000
ANGELES AGENCY

THE SANWA BANK LIMITED                                           $   15,000,000

THE SUMITOMO BANK, LIMITED                                       $   10,000,000

TOTAL COMMITMENT                                                 $1,000,000,000
AMOUNT


[NYCorp;1203895.1]

                                   Sch. I, p.2


                                                                  SCHEDULE II TO
                                                      FIVE-YEAR CREDIT AGREEMENT

                   ADDRESSES, TELECOPIER AND TELEPHONE NUMBERS

If to OCCIDENTAL                     OCCIDENTAL PETROLEUM CORPORATION
PETROLEUM CORPORATION:               10889 Wilshire Boulevard
                                     Los Angeles, CA 90024
                                     Attention:  Treasurer
                                     Tel. No. (310) 208-8800
                                     Telecopier No. (310) 443-6661

If to THE CHASE MANHATTAN            THE CHASE MANHATTAN BANK
BANK:                                600 Travis Street
                                     20th Floor
                                     Houston, TX 77002
                                     Attention:  Ms. Beth Lawrence
                                     Tel. No. (713) 216-5968
                                     Telecopier No. (713) 216-8870

                                     With copies to:

                                     THE CHASE MANHATTAN BANK
                                     600 Travis Street
                                     20th Floor
                                     Houston, TX 77002
                                     Attention: Ms. June Brand
                                     Tel. No. (713) 216-4327
                                     Telecopier No. (713) 216-4117

                                     and

                                     THE CHASE MANHATTAN BANK
                                     1 Chase Manhattan Plaza
                                     8th floor
                                     New York, NY 10081
                                     Attention: Ms. Joselin Fernandes
                                     Tel. No. (212) 552-7414
                                     Telecopier No. (212) 552-5777

[NYCorp;1203895.1]


If to ABN AMRO                       ABN AMRO BANK N.V.
BANK N.V.:                           203 South LaSalle, Suite 1500
                                     Chicago, IL 60604-1003
                                     Attention:  Credit Administration
                                     Tel. No. (312) 992-5110
                                     Telecopier No. (312) 992-5111

                                     With copy to:

                                     ABN AMRO BANK N.V.
                                     Three Riverway, Suite 1700
                                     Houston, TX 77056
                                     Attention:  Mr. Bryan Chapman
                                     Tel. No. (713) 964-3361
                                     Telecopier No. (713) 621-5801


If to THE BANK OF NOVA               THE BANK OF NOVA SCOTIA
SCOTIA:                              600 Peachtree Street N.E.,
                                     Suite 2700
                                     Atlanta, GA 30308-2214
                                     Attention:  Ms. Sonia McKoy
                                     Tel. No. (404) 877-1553
                                     Telecopier No. (404) 888-8998

                                     With copy to:

                                     THE BANK OF NOVA SCOTIA
                                     580 California Street, Suite 2100
                                     San Francisco, CA 94104
                                     Attention: Mr. Maarten Van Otterloo
                                     Tel. No. (415) 986-1100
                                     Telecopier No. (415) 397-0791


If to BANK OF AMERICA, N.A.:         BANK OF AMERICA, N.A.
                                     333 Clay Street, Suite 4550
                                     Dallas, TX 77002
                                     Attention: Ms. Brandi Baker
                                     Tel. No. (713) 651-4863
                                     Telecopier No. (214) 290-9415

[NYCorp;1203895.1]

                                  Sch. II, p.2


If to BANK ONE, NA:                  BANK ONE, NA
                                     1 Bank One Plaza
                                     Suite IL1-0353
                                     Chicago, IL 60670
                                     Attention:  Mr. Sean Drinan
                                     Tel. No. (312) 732-5085
                                     Telecopier No. (312) 732-3055


If to THE BANK OF                    THE BANK OF NEW YORK
NEW YORK:                            One Wall Street
                                     19th Floor
                                     New York, NY 10286
                                     Attention:  Ms. Lisa Williams
                                     Tel. No. (212) 635-7535
                                     Telecopier No. (212) 635-7923


If to BAYERISCHE                     BAYERISCHE LANDESBANK
LANDESBANK GIROZENTRALE,             GIROZENTRALE, CAYMAN ISLANDS
CAYMAN ISLANDS BRANCH:               BRANCH
                                     560 Lexington Avenue
                                     New York, NY 10022
                                     Attention: Ms. Patricia Sanchez
                                     Tel. No. (212) 310-9810
                                     Telecopier No. (212) 310-9930


If to BNP PARIBAS:                   BNP PARIBAS
                                     1200 Smith Street
                                     Suite 3100
                                     Houston, TX 77002
                                     Attention:  Mr. Brian Malone
                                     Tel. No. (713) 982-1153
                                     Telecopier No. (713) 659-6915


If to CITICORP USA, INC.:            CITICORP USA, INC.
                                     c/o Citibank Delaware Global Loan
                                     Service Center
                                     2 Penn's Way
                                     New Castle, DE 19720
                                     Attention:  Mr. Shane Penick
                                     Tel. No. (302) 894-6077
                                     Telecopier No. (302) 894-6120

[NYCorp;1203895.1]

                                  Sch. II, p.3



                                     with copy to:

                                     CITICORP USA, INC.
                                     1200 Smith Street
                                     Suite 2000
                                     Houston, TX 77002
                                     Attention:  Mr. Todd Mogil
                                     Tel No. (713) 654-3559
                                     Telecopier No. (713) 654-2849


If to COMMERZBANK AG,                COMMERZBANK AG, NEW YORK
NEW YORK BRANCH OR                   BRANCH
GRAND CAYMAN BRANCH:                 2 World Financial Center
                                     New York, NY 10281-1050
                                     Attention:  Monica Aguirre
                                     Tel No. (212) 266-7278
                                     Telecopier No. (212) 298-8111


If to CREDIT LYONNAIS                CREDIT LYONNAIS NEW YORK BRANCH
NEW YORK BRANCH:                     Houston Representative Office
                                     1000 Louisiana
                                     Suite 5360
                                     Houston, TX 77002
                                     Attention:  Mr. C. Page Dillehunt
                                     Tel. No. (713) 753-8719
                                     Telecopier No. (713) 751-0307


If to CREDIT SUISSE                  CREDIT SUISSE FIRST BOSTON
FIRST BOSTON:                        5 World Trade Center
                                     New York, NY 10048
                                     Attention:  Mr. Jenero Sarasola
                                     Tel. No. (212) 322-1384
                                     Telecopier No. (212) 335-0593

[NYCorp;1203895.1]

                                  Sch. II, p.4





If to NATIONAL WESTMINSTER           NATIONAL WESTMINSTER BANK PLC,
BANK PLC, NEW YORK                   NEW YORK BRANCH
BRANCH OR NASSAU BRANCH:             65 East 55th Street, 24th Floor
                                     New York, NY 10022
                                     Attention: Sheila Shaw
                                     Tel. No. (212) 401-1406
                                     Telecopier No. (212) 401-1494


If to SOCIETE GENERALE:              SOCIETE GENERALE
                                     560 Lexington Avenue, 4th Floor
                                     New York, NY 10020
                                     Attention: Ms. Candice Hellers
                                     Tel. No. (212) 278-6167
                                     Telecopier No. (212) 278-7343


If to FLEET NATIONAL BANK:           FLEET NATIONAL BANK
                                     100 Federal Street
                                     Mail Stop MA DE 10008A
                                     Boston, MA 02110
                                     Attention: Ms. Sarah Dwyer
                                     Tel. No. (617) 434-5934
                                     Telecopier No. (617) 434-3652


If to THE INDUSTRIAL BANK            THE INDUSTRIAL BANK OF JAPAN,
OF JAPAN, LIMITED:                   LIMITED
                                     350 South Grand Avenue
                                     Suite 1500
                                     Los Angeles, CA 90071
                                     Attention:  Mr. Carl-Eric Benzinger
                                     Tel. No. (213) 893-6422
                                     Telecopier No. (213) 488-9840


If to MELLON BANK, N.A.:             MELLON BANK, N.A.
                                     Three Mellon Center
                                     Room 1203
                                     Loan Administration
                                     Pittsburgh, PA 15259-0003
                                     Attention: Ms. Brenda Leierzapf
                                     Tel. No. (412) 234-8161
                                     Telecopier No. (412) 209-6146

[NYCorp;1203895.1]

                                  Sch. II, p.5


                                     With copy to:

                                     MELLON BANK, N.A.
                                     One Mellon Center
                                     Pittsburgh, PA 15258-0001
                                     Attention:  Mr. Mark W. Rogers
                                     Tel. No. (412) 234-1888
                                     Telecopier No. (412) 236-1840


IF TO RIYAD BANK,                    RIYAD BANK, HOUSTON AGENCY
HOUSTON AGENCY:                      700 Louisiana Street
                                     Suite 4770
                                     Houston, TX 77002
                                     Attention:  Mr. Paul N. Travis
                                     Tel No. (713) 331-2021
                                     Telecopier No. (713) 331-2043


If to ARAB BANK PLC:                 ARAB BANK PLC
                                     520 Madison Avenue
                                     New York, NY 10022
                                     Attention:  Mr. Justo Huapaya
                                     Tel. No. (212) 715-9713
                                     Telecopier No. (212) 593-4632


IF TO BANCA DI ROMA,                 BANCA DI ROMA, SAN FRANCISCO
SAN FRANCISCO BRANCH:                BRANCH
                                     One Market
                                     Steuart Tower, Suite 1000
                                     San Francisco, CA 94105
                                     Attention: Mr. Richard G. Dietz
                                     Tel. No. (415) 977-7310
                                     Telecopier No. (415) 357-9869


If to BBL INTERNATIONAL              BBL INTERNATIONAL (U.K.) LIMITED
(U.K.) LIMITED:                      6 Broadgate
                                     London EC2M 2AJ, ENGLAND
                                     Attention: Credit Administration
                                     Tel. No. 00-44-207-247-1277
                                     Telecopier No. 00-44-207-562-0208

[NYCorp;1203895.1]

                                  Sch. II, p.6



If to KBC BANK N.V.:                 KBC BANK N.V.
                                     Los Angeles Representative Office
                                     515 S. Figueroa Street, Suite 1920
                                     Los Angeles, CA 90071
                                     Attention:  Daniel To
                                     Tel. No. (213) 996-7534
                                     Telecopier No. (213) 629-5801


If to THE SAKURA BANK,               THE SAKURA BANK, LIMITED
LIMITED:                             101 Park Avenue, 17th Floor
                                     New York, NY 10178
                                     Attention: Ms. Mariko Stewart
                                     Tel. No. (212) 909-4471
                                     Telecopier No. (212) 593-1798


 If to THE TOKAI BANK,               THE TOKAI BANK, LIMITED
LIMITED:                             55 E. 52nd Street
                                     New York, NY 10055
                                     Attention:  Mr. Kazuhiro Nishikawa
                                     Tel. No. (212) 339-1165
                                     Telecopier No. (212) 832-1428


If to TORONTO DOMINION               TORONTO DOMINION (TEXAS), INC.
(TEXAS), INC.:                       909 Fannin Street
                                     Houston, TX 77010
                                     Attention:  Ms. Carol Brandt
                                     Tel. No. (713) 653-8204
                                     Telecopier No. (713) 951-9921


If to UBS AG, STAMFORD               UBS AG, STAMFORD BRANCH
BRANCH:                              677 Washington Boulevard
                                     Stamford, CT 06901
                                     Attention:  Ms. Deborah Porter
                                     Tel. No. (203) 719-6403
                                     Telecopier No. (203) 719-3888

[NYCorp;1203895.1]

                                  Sch. II, p.7


If to UNION BANK OF                  UNION BANK OF CALIFORNIA, N.A.
CALIFORNIA, N.A.:                    500 North Akard, Suite 4200
                                     Dallas, TX 75201
                                     Attention:  Mr. Dustin Gaspari
                                     Tel. No. (214) 922-4204
                                     Telecopier No. (214) 922-4209


If to THE DAI-ICHI KANGYO            THE DAI-ICHI KANGYO BANK, LTD.
BANK, LTD.:                          One World Trade Center, Suite 4911
                                     New York, NY 10048
                                     Attention:  Wendy Yuen
                                     Tel No. (212) 432-6691
                                     Telecopier No. (212) 524-0049


If to THE FUJI BANK,                 THE FUJI BANK, LIMITED, LOS
LIMITED,                             ANGELES AGENCY
LOS ANGELES AGENCY:                  333 South Hope Street
                                     Suite 3900
                                     Los Angeles, CA 90071
                                     Attention:  Ms. Sandy Walker
                                     Tel. No. (213) 253-4136
                                     Telecopier No. (213) 253-4178


If to THE SANWA BANK                 THE SANWA BANK LIMITED
LIMITED:                             601 S. Figueroa Street, W5-4
                                     Los Angeles, CA 90017
                                     Attention:  Washington Boza
                                     Tel. No. (213) 896-7434
                                     Telecopier No. (213) 623-4912


If to THE SUMITOMO BANK,             THE SUMITOMO BANK, LIMITED
LIMITED:                             277 Park Avenue
                                     New York, NY 10172
                                     Attention:  Mr. Robert Bocchicchio
                                     Tel. No. (212) 224-4061
                                     Telecopier No. (212) 224-5192

[NYCorp;1203895.1]

                                  Sch. II, p.8


                                                                     EXHIBIT A-1


                        OCCIDENTAL PETROLEUM CORPORATION

                                COMPETITIVE NOTE


$1,000,000,000                                                New York, New York
                                                                 January 4, 2001


     FOR VALUE RECEIVED, the undersigned, OCCIDENTAL PETROLEUM CORPORATION, a
Delaware corporation (the "COMPANY"), hereby promises to pay to the order of
[            ] (the "BANK"), at the office of The Bank of Nova Scotia, at One
Liberty Plaza, New York, New York 10006, on (i) the last day of each Interest
Period as defined in the Five-Year Credit Agreement dated as of January 4, 2001,
among the Company, the banks parties thereto, The Chase Manhattan Bank, as
syndication agent, Bank of America, N.A. and ABN AMRO Bank N.V., as co-
documentation agents, and The Bank of Nova Scotia, as administrative agent, as
the same may at any time be amended or modified and in effect (the "CREDIT
AGREEMENT"), the aggregate unpaid principal amount of all Competitive Loans (as
defined in the Credit Agreement) made by the Bank to the Company pursuant to the
Credit Agreement to which such Interest Period applies and (ii) the Maturity
Date (as defined in the Credit Agreement), the lesser of the principal sum of
ONE BILLION DOLLARS ($1,000,000,000) and the aggregate unpaid principal amount
of all Competitive Loans made by the Bank to the Company pursuant to the Credit
Agreement, in lawful money of the United States of America in immediately
available funds, and to pay interest on the unpaid principal amount hereof from
time to time outstanding from the date hereof until paid, in like funds, at said
office, at a rate or rates per annum and payable on such dates as determined
pursuant to the Credit Agreement.

     The Company promises to pay interest, on demand, on any overdue principal
hereof from the due date thereof until paid at a rate or rates determined as set
forth in the Credit Agreement.

     The Company hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the Bank of any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.

     All borrowings evidenced by this Competitive Note (together with the
interest rates with respect thereto) and all payments and prepayments of the
principal hereof, and the respective dates thereof, shall be endorsed by the
Bank on Schedule 1

[NYCorp;1203895.1]


attached hereto and made a part hereof, or on a continuation thereof which shall
be attached hereto and made a part hereof; PROVIDED, HOWEVER, that any failure
of the Bank to make such a notation or any error in such notation shall not in
any manner affect the obligation of the Company to make payments of principal
and interest with respect hereto in accordance with the terms of this
Competitive Note and the Credit Agreement.

     This Competitive Note is one of the Competitive Notes referred to in, and
is subject to and governed by the terms and provisions of, the Credit Agreement
which, among other things, contains provisions for the acceleration of the
maturity hereof upon the happening of certain events, for prepayment of the
principal hereof prior to the maturity thereof and for the amendment or waiver
of certain provisions of the Credit Agreement, all upon the terms and conditions
therein specified. THIS COMPETITIVE NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.


                           OCCIDENTAL PETROLEUM CORPORATION


                                 By
                                   ---------------------------------------------
                                     Name:
                                     Title:

[NYCorp;1203895.1]

                                  Exh. A-1, p.2


                                                                      SCHEDULE 1
                                                             TO COMPETITIVE NOTE

                  SCHEDULE 1 ATTACHED TO COMPETITIVE NOTE DATED
              JANUARY 4, 2001, OF OCCIDENTAL PETROLEUM CORPORATION,
                      PAYABLE TO THE ORDER OF [__________]

                   COMPETITIVE LOANS AND PAYMENTS OF PRINCIPAL

                                         Amount
          Amount                           of           Unpaid
            of         Interest        Principal       Principal        Notation
Date       Loan          Rate            Repaid          Balance         Made By
- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

[NYCorp;1203895.1]


                                                                     EXHIBIT A-2


                        OCCIDENTAL PETROLEUM CORPORATION

                              REVOLVING CREDIT NOTE


$[Amount of Bank's Revolving                                  New York, New York
  Credit Commitment]                                             January 4, 2001


     FOR VALUE RECEIVED, the undersigned, OCCIDENTAL PETROLEUM CORPORATION, a
Delaware corporation (the "COMPANY"), hereby promises to pay to the order of [ ]
(the "BANK"), at the office of The Bank of Nova Scotia, at One Liberty Plaza,
New York, New York 10006, on (i) the last day of each Interest Period as defined
in the Five-Year Credit Agreement dated as of January 4, 2001, among the
Company, the banks parties thereto, The Chase Manhattan Bank, as syndication
agent, Bank of America, N.A. and ABN AMRO Bank N.V., as co- documentation
agents, and The Bank of Nova Scotia, as administrative agent, as the same may at
any time be modified or amended and in effect (the "CREDIT AGREEMENT"), the
aggregate unpaid principal amount of each Revolving Credit Loan (as defined in
the Credit Agreement) made by the Bank to the Company pursuant to the Credit
Agreement to which such Interest Period applies and (ii) the Maturity Date (as
defined in the Credit Agreement) the lesser of the principal sum of [amount of
Bank's Revolving Credit Commitment] DOLLARS ($ ) and the aggregate unpaid
principal amount of all Revolving Credit Loans made by the Bank to the Company
pursuant to the Credit Agreement, in lawful money of the United States of
America in immediately available funds, and to pay interest on the unpaid
principal amount hereof from time to time outstanding from the date hereof until
paid, in like funds, at said office, at a rate or rates per annum and payable on
such dates as determined pursuant to the Credit Agreement.

     The Company promises to pay interest, on demand, on any overdue principal
hereof from the due date thereof until paid at a rate or rates determined as set
forth in the Credit Agreement.

     The Company hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the Bank of any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.

     All borrowings evidenced by this Revolving Credit Note (together with the
interest rates with respect thereto) and all payments and prepayments of the
principal

[NYCorp;1203895.1]


hereof, and the respective dates thereof, shall be endorsed by the Bank on
Schedule 1 attached hereto and made a part hereof, or on a continuation thereof
which shall be attached hereto and made a part hereof; PROVIDED, HOWEVER, that
any failure of the Bank to make such a notation or any error in such notation
shall not in any manner affect the obligation of the Company to make payments of
principal and interest with respect hereto in accordance with the terms of this
Revolving Credit Note and the Credit Agreement.

     This Revolving Credit Note is one of the Revolving Credit Notes referred to
in, and is subject to and governed by the terms and provisions of, the Credit
Agreement, which, among other things, contains provisions for the acceleration
of the maturity hereof upon the happening of certain events, for prepayment of
the principal hereof prior to the maturity thereof and for the amendment or
waiver of certain provisions of the Credit Agreement, all upon the terms and
conditions therein specified. THIS REVOLVING CREDIT NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.


                                    OCCIDENTAL PETROLEUM CORPORATION


                                        By
                                          --------------------------------------
                                            Name:
                                            Title:

[NYCorp;1203895.1]

                                  Exh. A-2, p.2


                                                                      SCHEDULE 1
                                                                    TO REVOLVING
                                                                     CREDIT NOTE


               SCHEDULE 1 ATTACHED TO REVOLVING CREDIT NOTE DATED
              JANUARY 4, 2001, OF OCCIDENTAL PETROLEUM CORPORATION,
                    PAYABLE TO THE ORDER OF [______________]

                REVOLVING CREDIT LOANS AND PAYMENTS OF PRINCIPAL

                                         Amount
          Amount                           of           Unpaid
            of         Interest        Principal       Principal        Notation
Date       Loan          Rate            Repaid          Balance         Made By
- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

- ----      ------      ----------      -----------      -----------      --------

[NYCorp;1203895.1]


                                                                       EXHIBIT B


                             COMPETITIVE BID REQUEST

                                     [Date]

The Bank of Nova Scotia, as
  Administrative Agent
  for the Banks referred to below
600 Peachtree St. N.E., Suite 2700
Atlanta, Georgia 30308-2214

Attention:  Loan Administration

Ladies and Gentlemen:

     The undersigned, Occidental Petroleum Corporation, a Delaware corporation
(the "Company"), refers to the Five-Year Credit Agreement dated as of January 4,
2001, among the Company, the banks parties thereto, The Chase Manhattan Bank, as
syndication agent, Bank of America, N.A. and ABN AMRO Bank N.V., as co-
documentation agents, and The Bank of Nova Scotia, as administrative agent.
Capitalized terms used herein and not defined shall have the meanings assigned
to such terms in the Credit Agreement.

     The Company hereby gives you notice pursuant to Section 2.02(b) of the
Credit Agreement that it requests a Competitive Borrowing under the Credit
Agreement, and in that connection sets forth below the terms on which such
Competitive Borrowing is requested to be made:


(A)  Date of Competitive Borrowing
                                                   -----------------------------

(B)  Principal amount of Competitive Borrowing 1
                                                   -----------------------------

(C)  Interest rate basis 2
                                                   -----------------------------

- --------

     1 Not less than $50,000,000 or greater than the available Total Commitment.

     2 Eurodollar Loan, Certificate of Deposit Loan or Fixed Rate Loan.

[NYCorp;1203895.1]


(D)  Interest Period and the last day thereof 3
                                                   -----------------------------

- --------

     3 Which, in the case of Fixed Rate Loans, shall not be less than 8 days or
more than 360 days, and which in each case shall end not later than the Maturity
Date.

[NYCorp;1203895.1]

                                   Exh. B, p.2


     Upon acceptance of any or all of the Competitive Loans offered by the Banks
in response to this request, the Company shall be deemed to have represented and
warranted that each of the conditions to lending specified in Section 7.02 of
the Credit Agreement has been satisfied.

                               Very truly yours,

                               OCCIDENTAL PETROLEUM CORPORATION


                                   By
                                     -------------------------------------------
                                       Name:
                                       Title:

[NYCorp;1203895.1]

                                   Exh. B, p.3


                                                                       EXHIBIT C


                        NOTICE OF COMPETITIVE BID REQUEST

                                     [Date]

[Name of Bank]
[Address]
Attention:

Ladies and Gentlemen:

     Reference is made to the Five-Year Credit Agreement dated as of January 4,
2001 (the "Credit Agreement"), among the Occidental Petroleum Corporation, a
Delaware corporation (the "Company"), the banks parties thereto, The Chase
Manhattan Bank, as syndication agent, Bank of America, N.A. and ABN AMRO Bank
N.V., as co-documentation agents, and The Bank of Nova Scotia, as administrative
agent. Capitalized terms used herein and not defined shall have the meanings
assigned to such terms in the Credit Agreement.

     The Company made a Competitive Bid Request on , pursuant to Section 2.02 of
the Credit Agreement and in that connection you are invited to submit a
Competitive Bid by [Date]/[Time]1. Your Competitive Bid must comply with Section
2.02 of the Credit Agreement and the terms set forth below on which the
Competitive Bid Request was made:


(A)  Date of Competitive Borrowing
                                                  ------------------------------

(B)  Principal amount of Competitive Borrowing
                                                  ------------------------------

(C)  Interest rate basis
                                                  ------------------------------

- --------
     1 The Competitive Bid must be received by the Administrative Agent (i) in
the case of Eurodollar Loans, not later than 2:00 p.m., New York City time, four
Business Days before a proposed Competitive Borrowing, (ii) in the case of
Certificate of Deposit Loans, not later than 2:00 p.m., New York City time,
three Business Days before a proposed Competitive Borrowing and (iii) in the
case of Fixed Rate Loans, not later than 9:30 a.m., New York City time, on the
Borrowing Date of the proposed Competitive Borrowing.

[NYCorp;1203895.1]


(D)  Interest Period and the last day thereof
                                                  ------------------------------


                               Very truly yours,

                               THE BANK OF NOVA SCOTIA, as Administrative
                               Agent


                                    By
                                      ------------------------------------------
                                        Name:
                                        Title:

[NYCorp;1203895.1]

                                   Exh. C, p.2


                                                                       EXHIBIT D


                                 COMPETITIVE BID

                                     [Date]


The Bank of Nova Scotia, as
  Administrative Agent for the
  Banks referred to below
600 Peachtree St. N.E., Suite 2700
Atlanta, Georgia 30308-2214

Attention:  Loan Administration

Ladies and Gentlemen:

     The undersigned, [Name of Bank], refers to the Five-Year Credit Agreement
dated as of January 4, 2001 (the "Credit Agreement"), among the Occidental
Petroleum Corporation, a Delaware corporation (the "Company"), the banks parties
thereto, The Chase Manhattan Bank, as syndication agent, Bank of America, N.A.
and ABN AMRO Bank N.V., as co-documentation agents, and The Bank of Nova Scotia,
as administrative agent. Capitalized terms used herein and not defined shall
have the meanings assigned to such terms in the Credit Agreement.

     The undersigned hereby makes a Competitive Bid pursuant to Section 2.02(c)
of the Credit Agreement, in response to the Competitive Bid Request made by the
Company on , , and in that connection sets forth below the terms on which such
Competitive Bid is made:

     (A)   Principal amount 1
                                                                   -------------

     (B)   Competitive Bid Rate 2
                                                                   -------------
- --------
     1 Not less than $5,000,000 and in integral multiples of $1,000,000 and
which may equal the entire aggregate principal amount of the Competitive
Borrowing requested by the Company. Multiple bids will be accepted by the
Administrative Agent.

     2 I.E., in the case of Eurodollar Loans or Certificate of Deposit Loans,
the Margin, and in the case of Fixed Rate Loans, the fixed rate of interest
offered (expressed as a percentage rate per annum rounded, if necessary, to the
nearest

[NYCorp;1203895.1]




     (C)   Interest Period and the last day thereof
                                                                   -------------

     The undersigned hereby confirms that it is prepared to extend credit to the
Company upon acceptance by the Company of this bid in accordance with Section
2.02(e) of the Credit Agreement.

                                    Very truly yours,

                                    [NAME OF BANK]


                                       By
                                         ---------------------------------------
                                          Name:
                                          Title:


- --------
1/10,000 of one percent).

[NYCorp;1203895.1]

                                   Exh. D, p.2


                                                                       EXHIBIT E


                       REVOLVING CREDIT BORROWING REQUEST

                                     [Date]


The Bank of Nova Scotia, as
  Administrative Agent
  for the Banks referred to below
600 Peachtree St. N.E., Suite 2700
Atlanta, Georgia 30308-2214

Attention:  Loan Administration

Ladies and Gentlemen:

     The undersigned, Occidental Petroleum Corporation, a Delaware corporation
(the "Company"), refers to the Five-Year Credit Agreement dated as of January 4,
2001 (the "Credit Agreement"), among the Company, the banks parties thereto (the
"Banks"), The Chase Manhattan Bank, as syndication agent, Bank of America, N.A.
and ABN AMRO Bank N.V., as co-documentation agents, and The Bank of Nova Scotia,
as administrative agent. Capitalized terms used herein and not defined shall
have the meanings assigned to such terms in the Credit Agreement.

     The Company hereby gives you notice pursuant to Section 2.01(b) of the
Credit Agreement that it requests a Revolving Credit Borrowing under the Credit
Agreement, and in that connection sets forth below the terms on which such
Revolving Credit Borrowing is requested to be made:

     (A)   Date of Revolving Credit Borrowing
                                                                   -------------

     (B)   Principal amount of Revolving Credit Borrowing 1
                                                                   -------------

     (C)   Interest rate basis 2
                                                                   -------------

     (D)   Interest Period and the last day thereof 3
                                                                   -------------
- --------
     1 Not less than $50,000,000 and in integral multiples of $10,000,000.
     2 Eurodollar Loan, Certificate of Deposit Loan, Term Federal Funds Loan or
Alternate Base Rate Loan, or a combination thereof.
     3 Which shall end not later than the Maturity Date.

[NYCorp;1203895.1]


     Upon the borrowing of the Revolving Credit Loans to be made by the Banks in
response to this request, the Company shall be deemed to have represented and
warranted that each of the conditions to lending specified in Section 7.02 of
the Credit Agreement has been satisfied.

                               Very truly yours,

                               OCCIDENTAL PETROLEUM CORPORATION


                                   By
                                     -------------------------------------------
                                       Name:
                                       Title:

[NYCorp;1203895.1]

                                   Exh. E, p.2


                                                                       EXHIBIT F

                        OCCIDENTAL PETROLEUM CORPORATION
                                   CERTIFICATE
                          (Pursuant to Section 7.01(c))

     I, the undersigned, [an] [the] [Assistant] Secretary of OCCIDENTAL
PETROLEUM CORPORATION, a Delaware corporation (the "Company"), DO HEREBY CERTIFY
that:

          1. This Certificate is furnished pursuant to Section 7.01(c) of that
     certain Five-Year Credit Agreement, dated as of January 4, 2001, among the
     Company, the banks parties thereto, The Chase Manhattan Bank, as
     syndication agent, Bank of America, N.A. and ABN AMRO Bank N.V., as
     co-documentation agents, and The Bank of Nova Scotia, as administrative
     agent (such credit agreement, as in effect on the date of this Certificate,
     being herein called the "Credit Agreement"). Unless otherwise defined
     herein, capitalized terms used in this Certificate have the meanings
     assigned to those terms in the Credit Agreement.

          2. There have been no amendments to the Restated Certificate of
     Incorporation of the Company since __________________________, 20____.*/

          3. Attached hereto as Annex A is a true and correct copy of the
     By-laws of the Company as in effect on the date hereof.

          4. Attached hereto as Annex B is a true and correct copy of the
     resolutions duly adopted by the [Executive Committee of] the Board of
     Directors of the Company [by unanimous written consent] on, and effective
     as of ______________, 20___, which resolutions have not been revoked,
     modified, amended or rescinded and are still in full force and effect, and
     the Credit Agreement and the Notes are in substantially the forms of those
     documents submitted to and approved by the [Executive Committee of the]
     Board of Directors of the Company.

          5. The persons named in Annex C attached hereto have been duly elected
     and have duly qualified as, and at all times since _____________, 20____
     (to and including the date hereof) have been, officers of the Company,
     holding the respective

- --------
     */ Insert a date which is on or before the date of the Secretary of State's
Certificate furnished pursuant to clause (i) of Section 7.01(b) of the Credit
Agreement.

[NYCorp;1203895.1]


     offices set forth therein opposite their names, and the signatures set
     forth therein opposite their names are their genuine signatures.

          6. I know of no proceeding for the dissolution or liquidation of the
     Company or threatening its existence.


     WITNESS my hand as of this 4th day of January 2001.


                                      ------------------------------------------
                                      Name:
                                      Title:   [Assistant] Secretary
                                      OCCIDENTAL PETROLEUM CORPORATION


     I, the undersigned, a Vice President of the Company, DO HEREBY CERTIFY that
____________ is [a] [the] duly elected and qualified [Assistant] Secretary of
the Company and the signature above is his genuine signature.

     WITNESS my hand as of this 4th day of January 2001.


                                      ------------------------------------------
                                      Name:
                                      Title:   Vice President
                                      OCCIDENTAL PETROLEUM CORPORATION

[NYCorp;1203895.1]

                                   Exh. F, p.2


                                                                       EXHIBIT G

                            ASSIGNMENT AND ACCEPTANCE

                             Dated __________, ____

     Reference is made to the Five-Year Credit Agreement dated as of January 4,
2001 (the "Credit Agreement"), among the OCCIDENTAL PETROLEUM CORPORATION, a
Delaware corporation (the "Company"), the banks parties thereto (the "Banks"),
The Chase Manhattan Bank, as syndication agent (in such capacity, the
"Syndication Agent"), Bank of America, N.A. and ABN AMRO Bank N.V., as
co-documentation agents, and The Bank of Nova Scotia, as administrative agent
(in such capacity, the "Administrative Agent"). Capitalized terms used herein
and not otherwise defined shall have the meanings assigned to such terms in the
Credit Agreement.

_______________________________ (the "Assignor") and ___________________________
(the "Assignee") agree as follows:

     1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, a % interest in and to all the
Assignor's rights and obligations under the Credit Agreement as of the Effective
Date (as defined below) (including, without limitation, such percentage interest
in the Revolving Credit Commitment of the Assignor on the Effective Date and
such percentage interest in the Revolving Credit Loans [and Competitive Loans],
if any, owing to the Assignor outstanding on the Effective Date together with
such percentage interest in all unpaid interest with respect to such Revolving
Credit Loans [and Competitive Loans] and Facility Fees, if any, accrued to the
Effective Date and such percentage interest in the Revolving Credit Note [and
the Competitive Note] held by the Assignor [excluding, however, any interest in
the Competitive Loans owing to the Assignor outstanding on the Effective Date or
in the unpaid interest with respect to such Competitive Loans or in the
Competitive Note held by the Assignor]).

     2. The Assignor (i) represents that as of the date hereof, its Revolving
Credit Commitment (without giving effect to assignments thereof which have not
yet become effective) is $ and the outstanding balance of its Revolving Credit
Loans (unreduced by any assignments thereof which have not yet become effective)
is $ [and the outstanding balance of its Competitive Loans (unreduced by any
assignments thereof which have not yet become effective) is $ ]; (ii) makes

[NYCorp;1203895.1]


no representation or warranty with respect to, and assumes no responsibility
with respect to any statements, warranties or representations made by the
Company in or in connection with, the Credit Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement or any other instrument or document furnished pursuant thereto;
(iii) represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and clear
of any adverse claim; (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or the
performance or observance by the Company of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (v) attaches the Revolving Credit Note [and the Competitive Note] held by it
and requests that the Administrative Agent exchange such Note[s] for a new
Revolving Credit Note [and a new Competitive Note] payable to the Assignee in a
principal amount equal to ____________________ [and _____________, respectively]
[, and a new Revolving Credit Note [and a new Competitive Note] payable to the
Assignor in a principal amount equal to ______________ and _____________,
respectively].

     3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Credit Agreement, together with copies of the most recent
financial statements and other documents referred to in Section 5.01(e), Section
6.01(a)(i), Section 6.01(a)(ii) and Section 6.01(a)(v) thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (iii) agrees
that it will, independently and without reliance upon any Agent, the Assignor or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iv) confirms that it is an
Eligible Assignee; (v) appoints and authorizes each of the Syndication Agent and
the Administrative Agent to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement as are delegated to the
Syndication Agent or the Administrative Agent, as the case may be, by the terms
thereof, together with such powers as are reasonably incidental thereto; (vi)
agrees that it will perform in accordance with their terms all the obligations
of the Assignor under the Credit Agreement, assumed by it under this Assignment
and Acceptance, which by the terms of the Credit Agreement are required to be
performed by it as a Bank; [and] (vii) agrees that it will keep confidential all
information with respect to the Company furnished to it by the Company or the
Assignor (other than information generally available to the public or otherwise
available to the Assignor on a nonconfidential basis) [; and (viii) attaches the
forms referred to in Section 10.06(g) of the Credit Agreement as to the
Assignee's complete exemption from United States

[NYCorp;1203895.1]

                                   Exh. G, p.2


withholding taxes with respect to all payments to be made to the Assignee under
the Credit Agreement*].

     4. The effective date for this Assignment and Acceptance shall be (the
"Effective Date")**. Following the execution of this Assignment and Acceptance,
it will be delivered to the Administrative Agent for acceptance and recording by
the Administrative Agent pursuant to Section 10.06(e) of the Credit Agreement.

     5. Upon such acceptance and recording, from and after the Effective Date,
(i) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Bank thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement (except as provided in Section 2.13(b),
Section 10.02 and Section 10.07 thereof).

     6. Upon such acceptance and recording, from and after the Effective Date,
the Administrative Agent shall make all payments in respect of the interest
assigned hereby (including payments of principal, interest, fees and other
amounts) to the Assignee. The Assignor and Assignee shall, directly between
themselves, make all appropriate adjustments in payments received from the
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment.

     7. Attached hereto is a Schedule containing the information in respect of
the Assignee that is set forth in Schedule II to the Credit Agreement in respect
of each Bank.

- --------
     */ If the Assignee is organized under the laws of a jurisdiction outside
the United States.
     **/ See Section 10.06(c). Such date shall be at least five Business Days
after the execution of this Assignment and Acceptance and delivery thereof to
the Administrative Agent.

[NYCorp;1203895.1]

                                   Exh. G, p.3


     8. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.

                                           [NAME OF ASSIGNOR]

                                            By
                                              ----------------------------------
                                               Name:
                                               Title:


                                           [NAME OF ASSIGNEE]

                                            By
                                              ----------------------------------
                                               Name:
                                               Title:


Accepted this ____ day
of ___________ , ____

THE BANK OF NOVA SCOTIA,
     as Administrative Agent

By __________________________
     Name:
     Title:

[NYCorp;1203895.1]

                                   Exh. G, p.4


                                                                       EXHIBIT H



                     [LETTERHEAD OF ROBERT E. SAWYER, ESQ.,
                             COUNSEL TO THE COMPANY]


                                 January 4, 2001

To each of the Banks parties
     to the Credit Agreement
     hereinafter referred to,
     to The Chase Manhattan Bank,
     as Syndication Agent, and
     to The Bank of Nova Scotia, as
     Administrative Agent

         Re:  Occidental Petroleum Corporation
                  Five-Year Credit Agreement dated as of
                  January 4, 2001

Ladies and Gentlemen:

     I am an Associate General Counsel of Occidental Petroleum Corporation, a
Delaware corporation (the "Company"), and have acted as counsel to the Company
in connection with the negotiation, execution and delivery by the Company of the
following agreement and documents:

         (a) Five-Year Credit Agreement, dated as of January 4, 2001 (the
     "Credit Agreement"), among the Company, the banks parties thereto
     (collectively, the "Banks", and individually, a "Bank"), The Chase
     Manhattan Bank, as syndication agent (in such capacity, the "Syndication
     Agent"), Bank of America, N.A. and ABN AMRO Bank N.V., as co-documentation
     agents for the Banks (in such capacity, the "Co-Documentation Agents"), and
     The Bank of Nova Scotia, as administrative agent for the Banks (in such
     capacity, the "Administrative Agent");

         (b) [ ] separate Competitive Notes dated January 4, 2001, issued by the
     Company pursuant to Section 2.06 of the Credit Agreement and payable to the
     order of each of the Competitive Bid Banks, respectively;

[NYCorp;1203895.1]


         (c) [ ] separate Revolving Credit Notes dated January 4, 2001, issued
     by the Company pursuant to Section 2.06 of the Credit Agreement and payable
     to the order of each of the Banks, respectively (the Competitive Notes and
     the Revolving Credit Notes collectively, the "Notes"); and

         (d) 364-Day Credit Agreement, dated as of January 4, 2001 (the "364-Day
     Credit Agreement"), among the Company, the banks parties thereto, The Chase
     Manhattan Bank, as syndication agent, Bank of America, N.A. and ABN AMRO
     Bank N.A., as co-documentation agents for the Banks, and The Bank of Nova
     Scotia, as administrative agent for the Banks.

     This opinion is being delivered to you pursuant to Section 7.01(d) of the
Credit Agreement. Unless otherwise defined herein, terms used herein have the
meanings assigned to such terms in the Credit Agreement.

     I am familiar with the corporate proceedings taken by the Company in
connection with the negotiation and authorization of the Credit Agreement and
the Notes and the transactions contemplated thereby. In addition, I have made
such inquiry of such officers and attorneys of the Company and its Subsidiaries
and examined such corporate records, certificates of officers of the Company, of
officers of the Company's Subsidiaries and of public officials and such other
documents and such questions of law and fact as I have considered necessary or
appropriate to form the basis of the opinions hereinafter expressed.

     Based upon, and subject to, the foregoing and the four final paragraphs
hereof, I am of the opinion that:

         1. The Company is a corporation duly incorporated, validly existing and
     in good standing under the laws of the State of Delaware; and the Company
     has all requisite corporate power and authority (a) to own its assets and
     to carry on the business in which it is engaged, (b) to execute, deliver
     and perform its obligations under the Credit Agreement and the Notes, (c)
     to borrow in the manner and for the purpose contemplated by the Credit
     Agreement, and (d) to issue the Notes in the manner and for the purpose
     contemplated by the Credit Agreement.

         2. The execution and delivery by the Company of the Credit Agreement
     and the Notes, the performance by the Company of its obligations under the
     Credit Agreement and the Notes, the Borrowings by the Company in the manner
     and for the purpose contemplated by the Credit Agreement, and the issuance
     by the Company of the Notes in the manner and for the purpose contemplated
     by the Credit Agreement have been duly authorized by all necessary
     corporate action (including any necessary stockholder action) on the part
     of the Company, and do

[NYCorp;1203895.1]

                                   Exh. H, p.2


     not and will not (a) violate any provision of any Federal, New York or
     California law, rule or regulation (including, without limitation,
     Regulation U and Regulation X) presently in effect having applicability to
     the Company (or any Specified Subsidiary), or of any order, writ, judgment,
     decree, determination or award known to me which is presently in effect and
     which has applicability to the Company (or any Specified Subsidiary), or of
     the charter or By-laws of the Company (or any Specified Subsidiary), or
     (b), subject to the Company's compli ance with any applicable covenants
     pertaining to its incurrence of unsecured indebtedness, result in a breach
     of or constitute a default under any indenture or loan or credit agreement,
     or any other agreement or instrument, in each case known to me, to which
     the Company or any Specified Subsidiary is a party or by which the Company
     or any Specified Subsidiary or its respective properties may be bound or
     affected, or (c) to the best of my knowledge, result in, or require, the
     creation or imposition of any Lien of any nature upon or with respect to
     any of the properties now owned or hereafter acquired by the Company (other
     than any right of set-off or banker's lien or attachment that any Bank or
     other holder of a Note may have under applicable law), and, to the best of
     my knowledge, the Company is not in default under or in violation of its
     charter or By-laws as presently in effect. The Borrowing on the date hereof
     of Loans under the Credit Agreement plus Loans under the 364-Day Credit
     Agreement in an aggregate principal amount equal to the Total Commitment
     under the Credit Agreement and the Total Commitment under the 364-Day
     Credit Agreement would not result in a breach of or constitute a default
     under any indenture or loan or credit agreement, or any other agreement or
     instrument, in each case known to me, to which the Company or any Specified
     Subsidiary is a party or by which the Company or any Specified Subsidiary
     or its respective properties may be bound or affected.

         3. The Credit Agreement and the Notes have been duly executed and
     delivered by the Company and each constitutes the legal, valid and binding
     obligation of the Company, and each is enforceable against the Company in
     accordance with its terms, and, if the Credit Agreement and the Notes had
     referred to California law rather than New York law as the governing law,
     or if a California court having jurisdiction were to decide that,
     notwithstanding the reference to New York law, the Credit Agreement and the
     Notes should be construed in accordance with, and governed by, California
     law, then the Credit Agreement and the Notes each would be enforceable
     against the Company in accordance with its terms.

         4. Except as set forth in the Company's annual report on Form 10-K for
     the year ended December 31, 1999, its quarterly reports on Form 10-Q for
     the quarters ended March 31, 2000, June 30, 2000 and September 30, 2000, or
     its current report on Form 8-K dated November 16, 2000, to the Securities
     and

[NYCorp;1203895.1]

                                   Exh. H, p.3


     Exchange Commission, and except as disclosed in writing to the Banks prior
     to the Effective Date, there are, to the best of my knowledge, no actions,
     suits, proceedings or investigations pending or threatened against the
     Company or any Subsidiary of the Company or any of its respective
     properties before any court, governmental agency or regulatory authority
     (Federal, state, local or foreign) which are likely (to the extent not
     covered by insurance) to have a material adverse effect on the present
     consolidated financial condition of the Company and its Consolidated
     Subsidiaries, taken as a whole, or materially to impair the Company's
     ability to perform its obligations under the Credit Agreement or the Notes.

         5. No authorization, consent, approval, license or formal exemption
     from, nor any filing, declaration or registration with, any Federal, New
     York or California court, governmental agency or regulatory authority
     including, without limitation, the Securities and Exchange Commission, or
     with any securities exchange located in the United States, is or will be
     required in connection with the execution, delivery and performance by the
     Company of the Credit Agreement and the Notes, the Borrowings by the
     Company in the manner and for the purpose contemplated by the Credit
     Agreement, or the issuance by the Company of the Notes in the manner and
     for the purpose contemplated by the Credit Agreement, except for
     informational reports the failure to file which does not affect the
     validity of the Credit Agreement or the Notes, and except as may be
     required in the ordinary course to comply with the affirmative covenants in
     the Credit Agreement.

         6. To the best of my knowledge, neither the Company nor any Related
     Person to the Company has incurred any liability to the PBGC under Title IV
     of ERISA which has not been fully discharged.

         7. The Company is not an "investment company" or a company "controlled"
     by an "investment company" within the meaning of the Investment Company Act
     of 1940, as amended.

         8. The Company is not a "holding company", or a "subsidiary company" of
     a "holding company", or an "affiliate" of a "holding company" or of a
     "subsidiary company" of a "holding company", within the meaning of the
     Public Utility Holding Company Act of 1935, as amended.

     I am a member of the California and New York Bars and for purposes of this
opinion do not hold myself out as an expert on, nor do I express any opinion as
to, the laws of any jurisdiction other than the laws of the State of California,
the laws of the State of New York, the Federal laws of the United States and the
General Corporation Law of the State of Delaware.

[NYCorp;1203895.1]

                                   Exh. H, p.4


     In rendering the opinion set forth in numbered paragraph 3 above with
respect to the Credit Agreement, I have assumed, with your approval, the due
authorization, execution and delivery of the Credit Agreement on the part of all
parties to the Credit Agreement, other than the Company, and the legality,
validity, binding effect on, and enforceability against, all such other parties
of the Credit Agreement. That opinion is subject to (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, (ii) the effect of general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law, (iii) the
effect of general rules of contract law that limit the enforceability of
provisions requiring indemnification of a party for liability for its own action
or inaction to the extent the action or inaction involves gross negligence,
recklessness, willful misconduct or unlawful conduct, and (iv) the possible
challenge to the provisions of the Credit Agreement and the Notes which provide
for a higher rate of interest after a default in payment of principal or
interest under California Civil Code Section 1671, which renders invalid
liquidated damages provisions in contracts if such provisions are found to have
been unreasonable under the circumstances existing at the time the contract was
made.

     With your approval, I have relied, as to certain matters of fact, on
information obtained from public officials, officers of the Company and its
Subsidiaries and other sources believed by me to be responsible, and I have
assumed that the signatures on all documents examined by me are genuine, that
all documents submitted to me as originals are authentic and that all documents
submitted to me as copies conform with the originals, which assumptions I have
not independently verified. Also with your approval, I have relied, as to
certain legal matters, on advice of other lawyers employed by the Company who
are more familiar with such matters.

     This opinion is rendered only to the Banks, the Syndication Agent, the
Co-Documentation Agents and the Administrative Agent and is solely for their
benefit in connection with the Credit Agreement. This opinion may not be relied
upon by the Banks, the Syndication Agent, the Co-Documentation Agents or the
Administrative Agent for any other purpose or by any other person, firm or
corporation for any purpose without my prior written consent.

                                        Very truly yours,

[NYCorp;1203895.1]

                                   Exh. H, p.5


                                                                       EXHIBIT I


                 [LETTERHEAD OF CRAVATH, SWAINE & MOORE, SPECIAL
                             COUNSEL TO THE AGENTS]

                                                                 January 4, 2001

                        OCCIDENTAL PETROLEUM CORPORATION
             FIVE-YEAR CREDIT AGREEMENT DATED AS OF JANUARY 4, 2001

Dear Ladies and Gentlemen:

     We have acted as special counsel for the Agents under and as defined in the
Five-Year Credit Agreement dated as of January 4, 2001 (the "Credit Agreement"),
among Occidental Petroleum Corporation (the "Company"), the banks parties
thereto (the "Banks"), The Chase Manhattan Bank, as syndication agent (in such
capacity the "Syndication Agent"), Bank of America, N.A. and ABN AMRO Bank,
N.V., as co-documentation agents for the Banks (in such capacity, the
Co-Documentation Agents) and The Bank of Nova Scotia, as administrative agent
for the Banks (in such capacity, the "Administrative Agent"). In that
connection, we have examined originals or copies certified or otherwise
identified to our satisfaction of the Credit Agreement and such other documents
as we have deemed necessary for purposes of this opinion.

     Based upon the foregoing, and assuming that the Credit Agreement and the
Notes (as defined in the Credit Agreement) have been duly authorized, executed
and delivered by the Company in conformity with all laws applicable to them, we
are of the opinion that the Credit Agreement and the Notes constitute legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws
affecting creditors' rights generally from time to time in effect and subject to
general principles of equity (including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing), regardless of whether
considered in a proceeding in equity or at law). With respect to the foregoing
opinion, (i) insofar as provisions contained in the Credit Agreement provide for
indemnification, the enforceability thereof may be limited by public policy
considerations, (ii) the availability of a decree for specific performance or an
injunction is subject to the discretion of the court requested to issue any such
decree or injunction and (iii) we express no opinion as to the effect (if any)
of any law of any jurisdiction (other than the State of New York) in which any

[NYCorp;1203895.1]


Bank is located which limits the rate of interest that such Bank may charge or
collect. We express no opinion as to Section 10.13 of the Credit Agreement
insofar as such Section relates to the subject matter jurisdiction of the United
States District Court for the Southern District of New York to adjudicate any
controversy related to the Credit Agreement or provides for the waiver of an
inconvenient forum.

     We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the Federal laws of
the United States of America.

     This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon for any other purpose or relied upon by or
furnished to any other person without our prior written consent.


                                                 Very truly yours,



To the Banks, the Syndication Agent,
      the Co-Documentation Agents,
      and the Administrative Agent
      referred to above,
c/o The Chase Manhattan Bank, as Syndication Agent

[NYCorp;1203895.1]

                                   Exh. I, p.2


                                                                       EXHIBIT J


                                    ADDENDUM

      Reference is made to the Five-Year Credit Agreement dated as of January 4,
2001 (the "Credit Agreement"), among Occidental Petroleum Corporation, a
Delaware corporation (the "Company"), the banks parties thereto (the "Banks"),
The Chase Manhattan Bank, as syndication agent (the "Syndication Agent"), Bank
of America, N.A. and ABN AMRO Bank, N.V., as co-documentation agents (the "Co-
Documentation Agents"), and The Bank of Nova Scotia, as administrative agent
(the "Administrative Agent"). Capitalized terms used herein and not defined
shall have the meanings assigned to such terms in the Credit Agreement.

      This instrument is submitted by the undersigned pursuant to Section 10.16
of the Credit Agreement and is an Addendum as defined in the Credit Agreement.

      1. The undersigned hereby agrees to become a party to the Credit Agreement
with the Revolving Credit Commitment set forth below. The undersigned is [not]
listed on Schedule I to the Credit Agreement.

      Revolving Credit Commitment:                                  $
                                                                      ----------

     *2.  The following information with respect to the undersigned is supplied
for purposes of Schedule II to the Credit Agreement:


           Name of Bank:
                                                  --------------------
           Address:
                                                  --------------------
                                                  --------------------
           Attention:
                                                  --------------------
           Tel. No.
                                                  --------------------
           Telecopier No.
                                                  --------------------

      3. This instrument may be executed by the undersigned and accepted by the
Company on separate counterparts, each of which counterparts shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same instrument.
- --------
     */    If Schedule II to the Credit Agreement already contains this
           information, this item need not be completed.

[NYCorp;1203895.1]


      IN WITNESS WHEREOF, the undersigned has caused this instrument to be
executed by its officer thereunto duly authorized as of the date set forth
below.


                                           -------------------------------------
Date:  [__________], 20___                 [Name of Bank]

                                           By
                                             -----------------------------------
                                               Name:
                                               Title:

Accepted:

OCCIDENTAL PETROLEUM CORPORATION

By
  -------------------------------
     Name:
     Title:

Date:  [__________], 20___


[NYCorp;1203895.1]

                                   Exh. J, p.2


                                                                       EXHIBIT K

                          ADMINISTRATIVE QUESTIONNAIRE
                        OCCIDENTAL PETROLEUM CORPORATION
                    $1,000,000,000 FIVE-YEAR CREDIT AGREEMENT

NOTE TO BANKS:                  PLEASE FORWARD THIS COMPLETED FORM
                                AS SOON AS POSSIBLE TO THE LOAN
                                ADMINISTRATION DEPARTMENT:

                                The Bank of Nova Scotia,
                                600 Peachtree N.E., Suite 2700
                                Atlanta, Georgia 30308-2214

                                Attn:

                           PLEASE TYPE ALL INFORMATION

SYNDICATION AGENT:              The Chase Manhattan Bank
                                600 Travis Street
                                20th Floor
                                Houston, TX 77002

                                Attention: Ms. Beth Lawrence

TELECOPIER:                     (713) 216-8870

CONTACTS:                       Ms. Beth Lawrence - (713) 216-5968
                                Managing Director

                                Ms. June Brand - (713) 216-4327

ADMINISTRATIVE AGENT:           The Bank of Nova Scotia
                                580 California Street, Suite 2100
                                San Francisco, California 94104

TELECOPIER:                     (415) 397-0791

CONTACTS:                       Maarten Van Otterloo -  (415) 986-1100
                                Vice President - Corporate Banking

                                Sonia McKoy - (404) 877-1553
                                Loan Operations Officer

[NYCorp;1203895.1]

                                   Exh. K, p.1


Full Legal Name of your Bank:
                                    --------------------------------------------

Exact name of signing officer:
                                    --------------------------------------------

Title of signing officer:
                                    --------------------------------------------

Business address for delivery of
   execution copies of credit
   agreement (Please do not
   use P.O. Box address; hand
   deliveries cannot be made):
                                    --------------------------------------------

Signing officer's phone no.:
                                    --------------------------------------------

Alternate officer contract:
                                    --------------------------------------------

Alternate officer's phone no:
                                    --------------------------------------------

Hard-copy documents and notices should be sent to the following account officer
designated by your bank:

Officer's name:
                                    --------------------------------------------

Title:
                                    --------------------------------------------

Street address
(No P.O. Boxes please):
                                    --------------------------------------------

City, State, Zip:
                                    --------------------------------------------

[NYCorp;1203895.1]

                                   Exh. K, p.2


                         GENERAL OPERATIONAL INFORMATION

OPERATING CONTACTS                 NAME                              PHONE NO.

Loan Department:
                        --------------------------------------------------------

Loan Administrator:
                        --------------------------------------------------------

Other:
                        --------------------------------------------------------

MOVEMENT OF FUNDS:                                      Wire Fed Funds to:

                        TO ADMINISTRATIVE AGENT:        The Bank of Nova Scotia
                                                        (ABA #02600-2532)
                                                        One Liberty Plaza
                                                        New York, New York
                                                        10006
                                                        For Credit A/C #6101-35
                                                        The Bank of Nova Scotia
                                                        San Francisco Agency
                                                        Reference: Occidental
                                                        Petroleum Corporation

                        TO YOU:                         Wire Fed Funds to:

                                                        ------------------------

                                                        ------------------------

                                                        ------------------------
                                                        Attention:
                                                                  --------------
                                                        Reference:
                                                                  --------------

Publicity: How would you like your bank's name to appear in any tombstone
           advertisements?
                          ------------------------------------------------------

Tax Identification Number:
                           -----------------------------------------------------

[NYCorp;1203895.1]

                                   Exh. K, p.3


                           PRIMARY CONTACT INFORMATION

We will send all telecopies to a single number (the Primary or Alternate Contact
numbers listed below) at the banking location you designate. These contacts are
those you designate for critical telecopies (rates, loan amounts, paydowns,
etc.).

1.    Your bank's primary contacts for telecopies:


PRIMARY TELECOPIER NO.:
                                ------------------------------------------------

ALTERNATE TELECOPIER NO.:
                                     -------------------------------------------

2.  Your bank's primary contacts:


     Name                       Phone No.                     Department

(1)
- --------------------------------------------------------------------------------

(2)
- --------------------------------------------------------------------------------

(If at any time any of the above information changes, please advise the
Administrative Agent by written notice).

[NYCorp;1203895.1]

                                   Exh. K, p.4


                    PLEASE COMPLETE THE FOLLOWING INFORMATION
                          FOR COMPETITIVE AUCTIONS ONLY


ADMINISTRATIVE AGENT:           The Bank of Nova Scotia
                                600 Peachtree St. N.E., Suite 2700
                                Atlanta, Georgia 30308-2214


TELECOPIER:

CONTACTS:

                                 PRIMARY CONTACT
                              COMPETITIVE AUCTIONS

Bank Name:
                        --------------------------------------------------------

Address:
                        --------------------------------------------------------

Primary Contact:
                        --------------------------------------------------------

Title:
                        --------------------------------------------------------

Department:
                        --------------------------------------------------------

Telephone Number:
                        --------------------------------------------------------

Telecopier Number:
                        --------------------------------------------------------

                                ALTERNATE CONTACT
                              COMPETITIVE AUCTIONS

Alternate Contact:
                        --------------------------------------------------------

Title:
                        --------------------------------------------------------

Department:
                        --------------------------------------------------------

Telephone Number:
                        --------------------------------------------------------

Telecopier Number:
                        --------------------------------------------------------

[NYCorp;1203895.1]

                                   Exh. K, p.5

EX-10.2

                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT
                              --------------------

     THIS EMPLOYMENT AGREEMENT is entered into as of the 17th day of November,
2000, by and between OCCIDENTAL PETROLEUM CORPORATION, a Delaware Corporation
("COMPANY"), and DR. RAY R. IRANI ("EMPLOYEE").

                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS, EMPLOYEE, since June 16, 1983, has served as an officer of
COMPANY, most recently as COMPANY's Chairman and Chief Executive Officer
pursuant to an agreement between EMPLOYEE and COMPANY dated September 11, 1997
(the "Prior Agreement"); and

     WHEREAS, COMPANY desires to obtain the benefit of continued services by
EMPLOYEE as Chairman and Chief Executive Officer, and EMPLOYEE desires to
continue to render services to COMPANY; and

     WHEREAS, the Board of Directors of COMPANY (the "Board") has determined
that it is in COMPANY's best interest and that of its stockholders to recognize
the substantial contribution that EMPLOYEE has made and is expected to continue
to make to COMPANY's business and to retain his services in the future; and

                                      -1-


     WHEREAS, COMPANY and EMPLOYEE desire to set forth in this Agreement the
terms and conditions of EMPLOYEE's continued employment with COMPANY which
Agreement represents and constitutes an amendment and restatement of the Prior
Agreement;

     NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:

     1. Term. This Agreement shall be in effect for a period of time (the
"Term") commencing on November 9, 2000 (the "Effective Date") and expiring on
the earlier of the date of EMPLOYER's 2007 stockholder meeting or May 30, 2007,
unless earlier terminated in accordance with the provisions hereof. COMPANY
shall employ EMPLOYEE, and EMPLOYEE shall serve COMPANY, in accordance with the
provisions hereof, throughout the Term, unless such employment is earlier
terminated in accordance with the provisions hereof.

     2. Specific Position; Duties and Responsibilities. Subject to the
provisions of this Agreement, COMPANY shall employ EMPLOYEE as Chairman and
Chief Executive Officer, and EMPLOYEE shall serve COMPANY as Chairman and Chief
Executive Officer and as a member of the Board. EMPLOYEE's principal business
address shall during such period be at COMPANY's

                                      -2-


principal executive offices in Southern California or with EMPLOYEE's consent in
such other place as such offices are relocated. EMPLOYEE's duties hereunder
shall be the usual and customary duties of the offices in which he shall serve.
EMPLOYEE shall have such executive power and authority as shall reasonably be
required to enable him to discharge his duties in the offices which he may hold.

     3. Services and Exclusivity of Services. During the term of this Agreement,
EMPLOYEE, except as otherwise expressly provided in this Section 3, shall devote
his full business time and energy to the business affairs and interests of
COMPANY and its subsidiaries, and shall use his best efforts and abilities to
promote COMPANY's and its subsidiaries' interests.

     EMPLOYEE may serve as director or in any other capacity of any business
enterprise, including an enterprise whose activities may involve or relate to
the business of COMPANY, provided that such service is expressly approved by the
Board. EMPLOYEE may make and manage personal business investments of his choice
and serve in any capacity with any civic, educational or charitable
organization, or any governmental entity or trade association, without seeking
or obtaining approval by the Board, provided such activities and

                                      -3-


services do not materially interfere or conflict with the performance of his
duties hereunder.

     4. Salary. Commencing as of the Effective Date of this Agreement, COMPANY
shall pay EMPLOYEE an annual salary at the minimum rate of $1,250,000, which
shall be payable in semimonthly installments in conformity with COMPANY's policy
relating to salaried employees. EMPLOYEE's salary shall be subject to annual
increase (and, as part of across the board reductions for other officers of
COMPANY, decrease) at the reasonable discretion of the Board and its
Compensation Committee.

     5. Bonus. EMPLOYEE shall be entitled to an annual cash bonus in an amount
to be determined at the reasonable discretion of the Board and its Compensation
Committee.

     6. Deferred Compensation. In advance of the annual period for which it is
earned, EMPLOYEE shall have the right to defer all or any portion of his salary
and all or any portion of his bonus to a specified date or to a specified event.
Any such deferred compensation shall not be forfeitable and shall bear interest
at a rate no less favorable than the highest rate then made available to any
other senior officer who is provided with

                                      -4-


the right to defer compensation under the COMPANY's 1988 Deferred Compensation
Plan.

     Any election to defer compensation shall not be taken into account in the
calculation of those of EMPLOYEE's rights and benefits under this Agreement that
are based upon EMPLOYEE's salary or bonus or the sum thereof.

     7. Employee Benefits. EMPLOYEE shall be entitled during his employment
hereunder, to all rights and benefits for which he is otherwise eligible under
any group life insurance, medical care (including coverage for EMPLOYEE's spouse
and children), disability, retirement, personal savings accounts, and other
plans or benefits which COMPANY or its subsidiaries may provide for him
(collectively, "Employee Benefits").

     If EMPLOYEE's employment is terminated hereunder, pursuant to Section
11(b), 11(c), or 11(d) hereof, and EMPLOYEE is entitled to but is no longer
eligible for Employee Benefits because of such termination, EMPLOYEE shall be
entitled to and COMPANY shall provide, to the extent provided in this Agreement,
benefits substantially equivalent to the Employee Benefits to which EMPLOYEE was
entitled immediately prior to such termination and shall do so for the period
during which he remains entitled to receive such Employee Benefits as provided
in this Agreement. With respect to the continuation of such

                                      -5-


benefits, EMPLOYEE shall also be paid by COMPANY an amount which, after taxes on
such amount, shall reimburse EMPLOYEE for any additional tax liabilities
incurred by EMPLOYEE by reason of the receipt of such benefits after the
termination of, rather than during the term of, this Agreement, upon the
assumption that the amount to which EMPLOYEE shall be so entitled shall be
subject to the maximum combined Federal and state tax rate applicable to
individuals in respect of such payments.

     8. Supplemental Benefits.

          (a) Retirement. COMPANY shall cause EMPLOYEE to be an eligible
participant in COMPANY's qualified and nonqualified retirement and deferred
compensation plans applicable to employees of COMPANY as of the effective date
of this Agreement.

          (b)  Life Insurance. During the period prior to his retirement,
COMPANY shall provide EMPLOYEE with life insurance which, when added to the
coverage provided as part of his Employee Benefits, shall provide coverage at a
minimum level equal to three (3) times his highest career annual salary at any
time during his employment by COMPANY. During any period following EMPLOYEE's
retirement or termination from employment with COMPANY, COMPANY shall provide
EMPLOYEE with life insurance at a minimum level equal to two (2) times his rate
of highest

                                      -6-


career annual salary at any time during his employment by COMPANY. To the extent
that assignability for estate planning purposes is not already provided for in
the underlying plans which relate to the foregoing coverages, all life insurance
is to be assignable at the option of EMPLOYEE.

          (c)  Post-Retirement Benefits.

               (i) During any period following EMPLOYEE's retirement or
termination from employment with COMPANY, EMPLOYEE shall be entitled to medical
benefits of a kind and to an extent no less favorable than the medical benefits
provided by COMPANY to EMPLOYEE prior to his retirement or termination.

               (ii) During any period following EMPLOYEE's retirement or
termination from employment with COMPANY, EMPLOYEE shall be entitled to continue
to receive personal tax, accounting and financial planning services currently
provided to EMPLOYEE at COMPANY's expense.

               (iii) Upon retirement, notwithstanding any contrary provision of
the applicable grants, all of EMPLOYEE's unvested stock options will become
fully vested immediately and exercisable in accordance with the terms of such
grants. In addition, all of EMPLOYEE's unvested restricted stock will become
fully vested immediately and all of EMPLOYEE's unvested performance stock will
become fully vested immediately and

                                      -7-


payable in accordance with the applicable awards as if EMPLOYEE continued to be
employed by COMPANY.

          (d) Spousal Benefits. EMPLOYEE's surviving spouse shall also be
entitled to continuation of medical benefits included within the Employee
Benefits for the remainder of her life.

          (e) Legal Fees. COMPANY shall provide to or for EMPLOYEE all legal
fees for services and costs excepting only for matters of a purely personal
nature. COMPANY's obligation pursuant to this Section 8(e) shall survive the
Term of this Agreement.

     9. Perquisites and Vacation. During his employment hereunder, EMPLOYEE
shall continue to be entitled to the minimum perquisites to which he was
entitled in accordance with the practice immediately prior to the Effective
Date.

     EMPLOYEE shall continue to be entitled to six (6) weeks paid vacation
during each calendar year of employment, prorated for any period which is less
than one (1) calendar year. Vacation time shall accrue during each calendar
year, and, upon termination of this Agreement for any reason and in addition to
any other rights granted to EMPLOYEE by this Agreement, EMPLOYEE shall be
entitled to be paid an amount based upon his salary at the rate applicable
immediately prior to such termination for any accrued but unused vacation time.

                                      -8-


     10. Long-Term Incentives.

          (a) Restricted Stock. During his employment hereunder, EMPLOYEE shall
be entitled to participate in COMPANY's long term incentive compensation
program, with any award to be related to the performance of COMPANY and
determined at the discretion of the Board or its Compensation Committee.

          (b) Stock Options. During his employment hereunder, EMPLOYEE shall be
considered annually for the grant of stock options under then existing COMPANY
stock option plans.

          (c) Performance Plans. If, during EMPLOYEE's employment hereunder,
COMPANY adopts any other long-term incentive plans, EMPLOYEE shall be treated
under each of those plans in a manner no less favorable than the treatment
afforded other key executives of the COMPANY.

     11. Termination.

          (a) Death. This Agreement shall terminate upon EMPLOYEE's death.
EMPLOYEE's estate or other designated beneficiary, if any, shall be entitled to
the rights and benefits as prescribed by applicable COMPANY plans and as
prescribed by Section 8(b) hereof. The rights and benefits to which EMPLOYEE's
estate or other designated beneficiary shall be entitled upon his death,
including a pro-rata portion of the bonus described in Section 5 above for the
year of death, shall

                                      -9-


be payable to such person or persons as EMPLOYEE shall have directed in writing
or, in the absence of such a designation, to his estate.

          (b) Disability. In the event that EMPLOYEE shall be unable, because of
illness, injury or similar incapacity ("disability"), to perform his duties
hereunder for an aggregate of six (6) months within any one eighteen (18) month
period, EMPLOYEE's employment hereunder may be terminated by written notice of
termination from COMPANY to EMPLOYEE. In the event of a termination pursuant to
this Section 11(b), EMPLOYEE shall be entitled to receive payments described in
Section 11(c) hereof offset by the amount of any disability benefits to which
EMPLOYEE shall become entitled under any COMPANY sponsored disability plan. In
the event of a termination pursuant to this Section 11(b), EMPLOYEE shall also
be entitled, until his death, to the medical and welfare benefits included
within the Employee Benefits and to the life insurance benefits enumerated in
the first paragraph of Section 8(b) hereof.

          (c) Termination by COMPANY. The Board shall have the right, at its
election to be made in writing and delivered to EMPLOYEE not less than sixty
(60) days prior to the effective date thereof, to terminate EMPLOYEE's
employment under this Agreement for any reason. In the event of a termination
pursuant to this Section 11(c), EMPLOYEE shall be entitled to three (3)

                                      -10-


times EMPLOYEE's highest annual salary and bonus paid to EMPLOYEE at any time in
respect of a single calendar year commencing with the calendar year January 1,
2000, and such amount shall be payable in equal monthly installments over three
(3) years, or in an undiscounted lump sum at the option of EMPLOYEE.

          EMPLOYEE shall also be entitled to the following:

               (i) Medical and welfare benefits included within the Employee
Benefits where permissible under applicable plans, and the provision of
comparable supplemental benefits where continuation of such benefits is
impermissible under applicable plans;

               (ii) The life insurance benefits provided in Section 8(b) hereof;

               (iii) Existing perquisites; and

               (iv) Full and immediate vesting of restricted stock, stock
options and any other then provided long-term incentive benefits; provided,
EMPLOYEE shall be able to exercise any outstanding options or stock appreciation
rights as if he had retired on the date of termination.

          In the event of a termination pursuant to this Section 11(c), EMPLOYEE
shall have no duty to mitigate COMPANY's obligations by seeking other employment
or by becoming self-employed, and COMPANY shall have no right to offset against

                                      -11-


its obligations any consideration received by EMPLOYEE from any subsequent
employment or subsequent self-employment.

          (d) Constructive Termination. EMPLOYEE shall have the right, at his
election to be made in writing and delivered to COMPANY within sixty (60) days
after such event, to terminate his employment under this Agreement if a material
breach of this Agreement by COMPANY occurs which COMPANY fails to cure within
fifteen (15) days after receipt of notice of such breach. In the event of a
termination under this Section 11(d), EMPLOYEE shall be entitled to treat such
termination as though it were a termination pursuant to Section 11 (c) hereof.
Notwithstanding the foregoing, COMPANY shall not be in material breach if
EMPLOYEE's duties and responsibilities are reduced solely by virtue of the fact
that COMPANY is (or substantially all of its assets are) sold to, or combined
with, another entity provided that EMPLOYEE shall continue to have substantially
the same executive duties with respect to COMPANY's business as of the Effective
Date and EMPLOYEE shall report directly to the board of directors of any entity
(or individual) that acquires COMPANY or its assets.

     12. Change in Control.

          COMPANY shall hold EMPLOYEE harmless against and shall insulate
EMPLOYEE from all of the effects of any excise or

                                      -12-


other tax payable by EMPLOYEE under or as a result of Sections 280G and 4999 of
the Internal Revenue Code of 1986 or comparable state law, or any successor
thereto, by reason of a change in control. COMPANY's obligation in this regard
shall include a gross-up obligation, to hold EMPLOYEE harmless from and to
insulate EMPLOYEE from all of the effects of any income and excise tax
liability.

     13. Miscellaneous.

          (a) Working Facilities. During his employment hereunder, EMPLOYEE
shall continue to be furnished with office facilities and services at least
substantially equivalent to those which have been provided him immediately prior
to the Effective Date.

          (b) Waiver of Breach. If COMPANY breaches any provision of this
Agreement, EMPLOYEE shall not be deemed under any circumstances to have waived
any of his rights attributable to such breach unless he has specifically
consented to such waiver in writing. Any such waiver by EMPLOYEE of a breach of
any provision of this Agreement by COMPANY shall not operate or be construed as
a waiver of any subsequent breach by COMPANY.

          If EMPLOYEE breaches any provision of this Agreement, COMPANY shall
not be deemed under any circumstances to have waived any of its rights
attributable to such breach

                                      -13-


unless it has specifically consented to such waiver in writing. Any such waiver
by COMPANY of a breach of any provision of this Agreement by EMPLOYEE shall not
operate or be construed as a waiver of any subsequent breach by EMPLOYEE.

          (c) Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered or
certified mail (return receipt requested) to the following addresses: If to
COMPANY, at 10889 Wilshire Boulevard, Los Angeles, California 90024, Attention:
General Counsel, with a copy to the Chairman of the Compensation Committee of
the Board at the same address, or to such other address as COMPANY, may from
time to time in writing designate, and if to EMPLOYEE, at such address as he may
from time to time in writing designate (or his business address of record in the
absence of such designation). All notices shall be deemed to have been given two
(2) business days after they have been deposited in the United States mail.

          (d) Amendments. Any provision contained in this Agreement or in any
renewal or extension hereof upon the same or different terms and conditions may
be amended at any time or from time to time by mutual agreement of EMPLOYEE and
COMPANY without the consent of any other person named or described in this
Agreement as a beneficiary or any of its provisions.

                                      -14-


          (e) Assignment. During the Term, COMPANY shall not merge, consolidate
or otherwise combine with any other entity unless COMPANY shall be the surviving
corporation or the surviving corporation shall have assumed all COMPANY's
obligations under this Agreement. The obligations of COMPANY under this
Agreement shall be binding upon the surviving corporation upon the merger,
consolidation or combination of COMPANY with such corporation. This Agreement
shall inure to the benefit of COMPANY and its successors and assigns and of
EMPLOYEE and his heirs and personal representatives.

          (f) Entire Agreement. This Agreement constitutes the entire agreement
between COMPANY and EMPLOYEE with respect to the subject matter hereof, amends
and supersedes the Prior Agreement and specifically does not affect those
certain agreements identified on Exhibit A hereto, and may not be changed orally
but only by an instrument in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.

          (g) Severability. The invalidity of any term of this Agreement shall
not invalidate or otherwise affect any other term of this Agreement.

          (h) Applicable Law.

               (i) Subject to Section 13 (j), this Agreement shall be governed
by and construed under and in

                                      -15-


accordance with the laws of the State of Delaware applicable to contracts made
and to be wholly performed within the State of Delaware, without regard to
principles of conflicts of laws; and the laws of that state shall govern all of
the rights, remedies, liabilities, powers and duties of the parties under this
Agreement and of any arbitrator or arbitrators to whom any matter hereunder may
be submitted for resolution by the parties hereto, as contemplated by and
pursuant to Title 6, Section 2708 of the Delaware Code.

               (ii) Subject to Section 13 (j), any legal action or proceeding
with respect to this Agreement shall be brought exclusively in the federal or
state courts of the State of Delaware, and by execution and delivery of this
Agreement, EMPLOYEE and COMPANY irrevocably consent to the jurisdiction of those
courts. EMPLOYEE and COMPANY irrevocably waive any objection, including any
objection to the laying of venue or based on the grounds of forum non
conveniens, which either may now or hereafter have to the bringing of any action
or proceeding in such jurisdiction in respect of this Agreement or any
transaction related hereto. EMPLOYEE and COMPANY acknowledge and agree that any
service of legal process by mail in the manner provided for notices under this
Agreement constitutes proper legal service of process under applicable law in
any action or proceeding under or in respect of this Agreement.

                                      -16-


          (i) Administration. The Board, or such committee of the Board as it
may by resolution specifically designate, shall administer this Agreement on
behalf of COMPANY and take any action and exercise any discretion required or
permitted to be taken or exercised by COMPANY pursuant to the provisions hereof.

          (j) Arbitration. Any controversy or claim arising out of or relating
to this Agreement shall be settled by binding arbitration in Delaware, in
accordance with the commercial arbitration rules of the American Arbitration
Association. The demand for arbitration must be made within one year after the
controversy or claim arises; failure to do so shall constitute an absolute bar
to the institution of any such proceeding and shall forever constitute a waiver
respecting any such controversy or claim. Any award pursuant to such arbitration
shall be included in a written decision which shall state the legal and factual
reasons upon which the award was based, including all the elements involved in
the calculation of any award of damages. Any such award shall be deemed final
and binding and may be entered and enforced in any state or federal court of
competent jurisdiction. The arbitrator(s) shall interpret the Agreement in
accordance with the laws of Delaware. The arbitrator(s) shall be authorized to
award reasonable

                                      -17-


attorneys' fees and other arbitration-related costs to the prevailing party.

          (k) Indemnity and Insurance. In any situation where under applicable
law the COMPANY has the power to indemnify EMPLOYEE in respect of any judgments,
fines, settlement, loss, cost or expense (including attorneys' fees) of any
nature related to or arising out of EMPLOYEE's activities as an agent, employee,
officer or director or COMPANY or in any other capacity on behalf of or at the
request of COMPANY, COMPANY agrees that it will indemnify EMPLOYEE to the
fullest extent permitted by applicable law, including but not limited to making
such findings and determinations and taking any and all such actions as COMPANY
may, under applicable law, be permitted to have the discretion to take so as to
effectuate such indeminification. COMPANY further agrees to furnish EMPLOYEE for
the remainder of his life with Directors' and Officers' liability insurance
insuring EMPLOYEE, against occurrences which occur during the term of this
Agreement, such insurance to have policy limits aggregating not less than $100
million, and otherwise to be in substantially the same form and to contain
substantially the same terms, conditions and exceptions as the liability
insurance policies provided for officers and directors of COMPANY in force from
time to time. COMPANY's obligation

                                      -18-


pursuant to this Section 13 (k) shall survive the Term of this Agreement.

     IN WITNESS WHEREOF, the parties have executes this Agreement as of the date
first above written.


                                OCCIDENTAL PETROLEUM CORPORATION

                                By: /s/ R. W. HALLOCK
                                ------------------------------------------------
                                Title:  Executive Vice President


                                EMPLOYEE:
                                           /s/ RAY R. IRANI
                                          --------------------------------------
                                                      Dr. Ray R. Irani

                                      -19-


                                Dr. Ray R. Irani


                     List of Special Agreements (Exhibit A)

o    Indemnification Agreement Between EMPLOYEE and COMPANY or any affiliates. o
     Split-Dollar Life Insurance Agreement, dated October 31, 1994.

Other Agreements:

o    Restricted Stock Agreement Letters for grants made under the 1977 Executive
     Long-Term Stock Purchase Plan and the 1995 Incentive Stock Plan.

o    Stock Option Agreement Letters for grants made under the 1987 Stock Option
     Plan and 1995 Incentive Stock Plan.

o    Performance Stock Option Agreement Letter for award made July 2, 1997 under
     the 1995 Incentive Stock Plan.

o    Enrollment Agreement under Senior Executive Deferred Compensation Plan,
     dated January 1, 1986.

o    Insurance Agreement under Senior Executive Survivor Benefit Plan, dated
     January 1, 1986.

o    Elections pursuant to Occidental Petroleum Corporation Deferred
     Compensation Plan


                                    Exhibit A

EX-10.3

                                                                    EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT
                              --------------------

     THIS EMPLOYMENT AGREEMENT is entered into as of the 17th day of November,
2000, by and between OCCIDENTAL PETROLEUM CORPORATION, a Delaware Corporation
("COMPANY"), and DR. DALE R. LAURANCE ("EMPLOYEE").

                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS, EMPLOYEE, since September 1, 1984, has served as an officer of
COMPANY, most recently as COMPANY's President pursuant to an agreement between
EMPLOYEE and COMPANY dated September 11, 1997 (the "Prior Agreement"); and

     WHEREAS, COMPANY desires to obtain the benefit of continued services by
EMPLOYEE as President, and EMPLOYEE desires to continue to render services to
COMPANY; and

     WHEREAS, the Board of Directors of COMPANY (the "Board") has determined
that it is in COMPANY's best interest and that of its stockholders to recognize
the substantial contribution that EMPLOYEE has made and is expected to continue
to make to COMPANY's business and to retain his services in the future; and

     WHEREAS, COMPANY and EMPLOYEE desire to set forth in this Agreement the
terms and conditions of EMPLOYEE's continued

                                      -1-


employment with COMPANY which Agreement represents and constitutes an amendment
and restatement of the Prior Agreement;

     NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:

     1. Term. This Agreement shall be in effect for a period of time (the
"Term") commencing on November 9, 2000 (the "Effective Date") and expiring on
the fifth anniversary of the Effective Date, unless earlier terminated in
accordance with the provisions hereof. COMPANY shall employ EMPLOYEE, and
EMPLOYEE shall serve COMPANY, in accordance with the provisions hereof,
throughout the Term, unless such employment is earlier terminated in accordance
with the provisions hereof.

     2. Specific Position; Duties and Responsibilities. Subject to the
provisions of this Agreement, COMPANY shall employ EMPLOYEE as President, and
EMPLOYEE shall serve COMPANY as President and as a member of the Board.
EMPLOYEE's principal business address shall during such period be at COMPANY's
principal executive offices in Southern California or with EMPLOYEE's consent in
such other place as such offices are relocated. EMPLOYEE's duties hereunder
shall be the usual and

                                      -2-


customary duties of the offices in which he shall serve. EMPLOYEE shall have
such executive power and authority as shall reasonably be required to enable him
to discharge his duties in the offices which he may hold.

     3. Services and Exclusivity of Services. During the term of this Agreement,
EMPLOYEE, except as otherwise expressly provided in this Section 3, shall devote
his full business time and energy to the business affairs and interests of
COMPANY and its subsidiaries, and shall use his best efforts and abilities to
promote COMPANY's and its subsidiaries' interests.

     EMPLOYEE may serve as director or in any other capacity of any business
enterprise, including an enterprise whose activities may involve or relate to
the business of COMPANY, provided that such service is expressly approved by the
Board. EMPLOYEE may make and manage personal business investments of his choice
and serve in any capacity with any civic, educational or charitable
organization, or any governmental entity or trade association, without seeking
or obtaining approval by the Board, provided such activities and services do not
materially interfere or conflict with the performance of his duties hereunder.

                                      -3-


     4. Salary. Commencing as of the Effective Date of this Agreement, COMPANY
shall pay EMPLOYEE an annual salary at the minimum rate of $990,000, which shall
be payable in semimonthly installments in conformity with COMPANY's policy
relating to salaried employees. EMPLOYEE's salary shall be subject to annual
increase (and, as part of across the board reductions for other officers of
COMPANY, decrease) at the reasonable discretion of the Board and its
Compensation Committee.

     5. Bonus. EMPLOYEE shall be entitled to an annual cash bonus in an amount
to be determined at the reasonable discretion of the Board and its Compensation
Committee.

     6. Deferred Compensation. In advance of the annual period for which it is
earned, EMPLOYEE shall have the right to defer all or any portion of his salary
and all or any portion of his bonus to a specified date or to a specified event.
Any such deferred compensation shall not be forfeitable and shall bear interest
at a rate no less favorable than the highest rate then made available to any
other senior officer who is provided with the right to defer compensation under
the COMPANY's 1988 Deferred Compensation Plan.

                                      -4-


     Any election to defer compensation shall not be taken into account in the
calculation of those of EMPLOYEE's rights and benefits under this Agreement that
are based upon EMPLOYEE's salary or bonus or the sum thereof.

     7. Employee Benefits. EMPLOYEE shall be entitled during his employment
hereunder, to all rights and benefits for which he is otherwise eligible under
any group life insurance, medical care (including coverage for EMPLOYEE's spouse
and children), disability, retirement, personal savings accounts, and other
plans or benefits which COMPANY or its subsidiaries may provide for him
(collectively, "Employee Benefits").

     If EMPLOYEE's employment is terminated hereunder, pursuant to Section
11(b), 11(c), or 11 (d) hereof, and EMPLOYEE is entitled to but is no longer
eligible for Employee Benefits because of such termination, EMPLOYEE shall be
entitled to and COMPANY shall provide, to the extent provided in this Agreement,
benefits substantially equivalent to the Employee Benefits to which EMPLOYEE was
entitled immediately prior to such termination and shall do so for the period
during which he remains entitled to receive such Employee Benefits as provided
in this Agreement. With respect to the continuation of such benefits, EMPLOYEE
shall also be paid by COMPANY an amount which, after taxes on such amount, shall
reimburse EMPLOYEE for

                                      -5-


any additional tax liabilities incurred by EMPLOYEE by reason of the receipt of
such benefits after the termination of, rather than during the term of, this
Agreement, upon the assumption that the amount to which EMPLOYEE shall be so
entitled shall be subject to the maximum combined Federal and state tax rate
applicable to individuals in respect of such payments.

     8. Supplemental Benefits.

          (a) Retirement. COMPANY shall cause EMPLOYEE to be an eligible
participant in COMPANY's qualified and nonqualified retirement and deferred
compensation plans applicable to employees of COMPANY as of the effective date
of this Agreement.

          (b) Life Insurance. During the period prior to his retirement, COMPANY
shall provide EMPLOYEE with life insurance which, when added to the coverage
provided as part of his Employee Benefits, shall provide coverage at a minimum
level equal to three (3) times his highest career annual salary at any time
during his employment by COMPANY. During any period following EMPLOYEE's
retirement or termination from employment with COMPANY, COMPANY shall provide
EMPLOYEE with life insurance at a minimum level equal to two (2) times his rate
of highest career annual salary at any time during his employment by COMPANY. To
the extent that assignability for estate planning

                                      -6-


purposes is not already provided for in the underlying plans which relate to the
foregoing coverageS, all life insurance is to be assignable at the option of
EMPLOYEE.

          (c) Post-Retirement Benefits.

               (i) During any period following EMPLOYEE's retirement or
termination from employment with COMPANY, EMPLOYEE shall be entitled to medical
benefits of a kind and to an extent no less favorable than the medical benefits
provided by COMPANY to EMPLOYEE prior to his retirement or termination.

               (ii) During any period following EMPLOYEE's retirement or
termination from employment with COMPANY, EMPLOYEE shall be entitled to continue
to receive personal tax, accounting and financial planning services currently
provided to EMPLOYEE at COMPANY's expense.

          (d) Spousal Benefits. EMPLOYEE's surviving spouse shall also be
entitled to continuation of medical benefits included within the Employee
Benefits for the remainder of her life.

          (e) Legal Fees. COMPANY shall provide to or for EMPLOYEE all legal
fees for services and costs excepting only for matters of a purely personal
nature. COMPANY's obligation pursuant to this Section 8(e) shall survive the
Term of this Agreement.

                                      -7-


     9. Perquisites and Vacation. During his employment hereunder, EMPLOYEE
shall continue to be entitled to the minimum perquisites to which he was
entitled in accordance with the practice immediately prior to the Effective
Date.

     10. Long-Term Incentives.

          (a) Restricted Stock. During his employment hereunder, EMPLOYEE shall
be entitled to participate in COMPANY's long term incentive compensation
program, with any award to be related to the performance of COMPANY and
determined at the discretion of the Board or its Compensation Committee.

          (b) Stock Options. During his employment hereunder, EMPLOYEE shall be
considered annually for the grant of stock options under then existing COMPANY
stock option plans.

          (c) Performance Plans. If, during EMPLOYEE's employment hereunder,
COMPANY adopts any other long-term incentive plans, EMPLOYEE shall be treated
under each of those plans in a manner no less favorable than the treatment
afforded other key executives of the COMPANY.

     11. Termination.

          (a) Death. This Agreement shall terminate upon EMPLOYEE's death.
EMPLOYEE's estate or other designated beneficiary, if any, shall be entitled to
the rights and

                                      -8-


benefits as prescribed by applicable COMPANY plans and as prescribed by Section
8(b) hereof. The rights and benefits to which EMPLOYEE's estate or other
designated beneficiary shall be entitled upon his death, including a pro-rata
portion of the bonus described in Section 5 above for the year of death, shall
be payable to such person or persons as EMPLOYEE shall have directed in writing
or, in the absence of such a designation, to his estate.

          (b) Disability. In the event that EMPLOYEE shall be unable, because of
illness, injury or similar incapacity ("disability"), to perform his duties
hereunder for an aggregate of six (6) months within any one eighteen (18) month
period, EMPLOYEE's employment hereunder may be terminated by written notice of
termination from COMPANY to EMPLOYEE. In the event of a termination pursuant to
this Section 11(b), EMPLOYEE shall be entitled to receive payments described in
Section 11(c) hereof offset by the amount of any disability benefits to which
EMPLOYEE shall become entitled under any COMPANY sponsored disability plan. In
the event of a termination pursuant to this Section 11(b), EMPLOYEE shall also
be entitled, until his death, to the medical and welfare benefits included
within the Employee Benefits and to the life insurance benefits enumerated in
the first paragraph of Section 8(b) hereof.

                                      -9-


          (c) Termination by COMPANY. The Board shall have the right, at its
election to be made in writing and delivered to EMPLOYEE not less than sixty
(60) days prior to the effective date thereof, to terminate EMPLOYEE's
employment under this Agreement for any reason. In the event of a termination
pursuant to this Section 11(c), EMPLOYEE shall be entitled to three (3) times
EMPLOYEE's highest annual salary and bonus paid to EMPLOYEE at any time in
respect of a single calendar year commencing with the calendar year January 1,
2000, and such amount shall be payable in equal monthly installments over three
(3) years, or in an undiscounted lump sum at the option of EMPLOYEE.

          EMPLOYEE shall also be entitled to the following:

               (i) Medical and welfare benefits included within the Employee
Benefits where permissible under applicable plans, and the provision of
comparable supplemental benefits where continuation of such benefits is
impermissible under applicable plans;

               (ii) The life insurance benefits provided in Section 8(b)
hereof; and

               (iii) Full and immediate vesting of restricted stock, stock
options and any other then provided long-term incentive benefits; provided,
EMPLOYEE shall be able to exercise any outstanding options or stock appreciation
rights

                                      -10-


as if he were eligible to retire and did retire on the date of termination.

               In the event of a termination pursuant to this Section 11(c),
EMPLOYEE shall have no duty to mitigate COMPANY's obligations by seeking other
employment or by becoming self-employed, and COMPANY shall have no right to
offset against its obligations any consideration received by EMPLOYEE from any
subsequent employment or subsequent self-employment.

          (d) Constructive Termination. EMPLOYEE shall have the right, at his
election to be made in writing and delivered to COMPANY within sixty (60) days
after such event, to terminate his employment under this Agreement if a material
breach of this Agreement by COMPANY occurs which COMPANY fails to cure within
fifteen (15) days after receipt of notice of such breach. In the event of a
termination under this Section 11(d), EMPLOYEE shall be entitled to treat such
termination as though it were a termination pursuant to Section 11 (c) hereof.
Notwithstanding the foregoing, COMPANY shall not be in material breach if
EMPLOYEE's duties and responsibilities are reduced solely by virtue of the fact
that COMPANY is (or substantially all of its assets are) sold to, or combined
with, another entity provided that EMPLOYEE shall continue to have substantially
the same executive duties with respect to COMPANY's business as of the Effective
Date and EMPLOYEE shall report directly to the

                                      -11-


chief executive officer, to Dr. Ray R. Irani, and/or to the board of directors
of any entity (or individual) that acquires COMPANY or its assets.

     12. Change in Control.

          COMPANY shall hold EMPLOYEE harmless against and shall insulate
EMPLOYEE from all of the effects of any excise or other tax payable by EMPLOYEE
under or as a result of Sections 280G and 4999 of the Internal Revenue Code of
1986 or comparable state law, or any successor thereto, by reason of a change in
control. COMPANY's obligation in this regard shall include a gross-up
obligation, to hold EMPLOYEE harmless from and to insulate EMPLOYEE from all of
the effects of any income and excise tax liability.

     13. Miscellaneous.

          (a) Working Facilities. During his employment hereunder, EMPLOYEE
shall continue to be furnished with office facilities and services at least
substantially equivalent to those which have been provided him immediately prior
to the Effective Date.

          (b) Waiver of Breach. If COMPANY breaches any provision of this
Agreement, EMPLOYEE shall not be deemed under any circumstances to have waived
any of his rights attributable

                                      -12-


to such breach unless he has specifically consented to such waiver in writing.
Any such waiver by EMPLOYEE of a breach of any provision of this Agreement by
COMPANY shall not operate or be construed as a waiver of any subsequent breach
by COMPANY.

          If EMPLOYEE breaches any provision of this Agreement, COMPANY shall
not be deemed under any circumstances to have waived any of its rights
attributable to such breach unless it has specifically consented to such waiver
in writing. Any such waiver by COMPANY of a breach of any provision of this
Agreement by EMPLOYEE shall not operate or be construed as a waiver of any
subsequent breach by EMPLOYEE.

          (c) Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered or
certified mail (return receipt requested) to the following addresses: If to
COMPANY, at 10889 Wilshire Boulevard, Los Angeles, California 90024, Attention:
General Counsel, with a copy to the Chairman of the Compensation Committee of
the Board at the same address, or to such other address as COMPANY, may from
time to time in writing designate, and if to EMPLOYEE, at such address as he may
from time to time in writing designate (or his business address of record in the
absence of such designation). All notices shall be deemed to have been given two
(2) business days after they have been deposited in the United States mail.

                                      -13-


          (d) Amendments. Any provision contained in this Agreement or in any
renewal or extension hereof upon the same or different terms and conditions may
be amended at any time or from time to time by mutual agreement of EMPLOYEE and
COMPANY without the consent of any other person named or described in this
Agreement as a beneficiary or any of its provisions.

          (e) Assignment. During the Term, COMPANY shall not merge, consolidate
or otherwise combine with any other entity unless COMPANY shall be the surviving
corporation or the surviving corporation shall have assumed all COMPANY's
obligations under this Agreement. The obligations of COMPANY under this
Agreement shall be binding upon the surviving corporation upon the merger,
consolidation or combination of COMPANY with such corporation. This Agreement
shall inure to the benefit of COMPANY and its successors and assigns and of
EMPLOYEE and his heirs and personal representatives.

          (f) Entire Agreement. This Agreement constitutes the entire agreement
between COMPANY and EMPLOYEE with respect to the subject matter hereof, amends
and supersedes the Prior Agreement and specifically does not affect those
certain agreements identified on Exhibit A hereto, and may not be changed orally
but only by an instrument in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.

                                      -14-


          (g) Severability. The invalidity of any term of this Agreement shall
not invalidate or otherwise affect any other term of this Agreement.

          (h) Applicable Law. (i) Subject to Section 13(j), this Agreement shall
be governed by and construed under and in accordance with the laws of the State
of Delaware applicable to contracts made and to be wholly performed within the
State of Delaware, without regard to principles of conflicts of laws; and the
laws of that state shall govern all of the rights, remedies, liabilities, powers
and duties of the parties under this Agreement and of any arbitrator or
arbitrators to whom any matter hereunder may be submitted for resolution by the
parties hereto, as contemplated by and pursuant to Title 6, Section 2708 of the
Delaware Code.

          (ii)  Subject to Section 13(j), any legal action of proceeding with
respect to this Agreement shall be brought exclusively in the federal or state
courts of the State of Delaware, and by execution and delivery of this
Agreement, EMPLOYEE and COMPANY irrevocably consent to the jurisdiction of those
courts. EMPLOYEE and COMPANY irrevocably waive any objection, including any
objection to the laying of venue or based on the grounds of forum non
conveniens, which either may now or hereafter have to the bringing of any action
or proceeding in such jurisdiction in respect of this Agreement or any

                                      -15-


transaction related hereto. EMPLOYEE and COMPANY acknowledge and agree that any
service of legal process by mail in the manner provided for notices under this
Agreement constitutes proper legal service of process under applicable law in
any action or proceeding under or in respect of this Agreement.

          (i) Administration. The Board, or such committee of the Board as it
may by resolution specifically designate, shall administer this Agreement on
behalf of COMPANY and take any action and exercise any discretion required or
permitted to be taken or exercised by COMPANY pursuant to the provisions hereof.

          (j) Arbitration. Any controversy or claim arising out of or relating
to this Agreement shall be settled by binding arbitration in Delaware, in
accordance with the commercial arbitration rules of the American Arbitration
Association. The demand for arbitration must be made within one year after the
controversy or claim arises; failure to do so shall constitute an absolute bar
to the institution of any such proceeding and shall forever constitute a waiver
respecting any such controversy or claim. Any award pursuant to such arbitration
shall be included in a written decision which shall state the legal and factual
reasons upon which the award was based, including all the elements involved in
the calculation of any award of damages. Any such award shall be deemed final
and

                                      -16-


binding and may be entered and enforced in any state or federal court of
competent jurisdiction. The arbitrator(s) shall interpret the Agreement in
accordance with the laws of Delaware. The arbitrator(s) shall be authorized to
award reasonable attorneys' fees and other arbitration-related costs to the
prevailing party.

          (k) Indemnity and Insurance. In any situation where under applicable
law the COMPANY has the power to indemnify EMPLOYEE in respect of any judgments,
fines, settlement, loss, cost or expense (including attorneys' fees) of any
nature related to or arising out of EMPLOYEE's activities as an agent, employee,
officer or director or COMPANY or in any other capacity on behalf of or at the
request of COMPANY, COMPANY agrees that it will indemnify EMPLOYEE to the
fullest extent permitted by applicable law, including but not limited to making
such findings and determinations and taking any and all such actions as COMPANY
may, under applicable law, be permitted to have the discretion to take so as to
effectuate such indeminification. COMPANY further agrees to furnish EMPLOYEE for
the remainder of his life with Directors' and Officers' liability insurance
insuring EMPLOYEE, against occurrences which occur during the term of this
Agreement, such insurance to have policy limits aggregating not less than $100
million, and otherwise to be in substantially the same form and to contain

                                      -17-


substantially the same terms, conditions and exceptions as the liability
insurance policies provided for officers and directors of COMPANY in force from
time to time. COMPANY's obligation pursuant to this Section 13 (k) shall survive
the Term of this Agreement.

     IN WITNESS WHEREOF, the parties have executes this Agreement as of the date
first above written.


                                OCCIDENTAL PETROLEUM CORPORATION

                                By: /s/ RAY R. IRANI
                                ------------------------------------------------
                                Title:  Chairman and CEO


                                EMPLOYEE:
                                           /s/ DALE R. LAURANCE
                                          --------------------------------------
                                                   Dr. Dale R. Laurance

                                      -18-


                              Dr. Dale R. Laurance

                     List of Special Agreements (Exhibit A)

o    Indemnification Agreement Between EMPLOYEE and COMPANY or any affiliates.

o    Split-Dollar Life Insurance Agreement, dated September 6, 1994.

Other Agreements:

o    Restricted Stock Agreement Letters for grants made under the 1977 Executive
     Long-Term Stock Purchase Plan and the 1995 Incentive Stock Plan.

o Stock Option Agreement Letters for grants made under the 1987 Stock Option
Plan.

o    Performance Stock Agreement Letters for grants made under the 1995
     Incentive Stock Plan.

o    Performance Stock Option Agreement Letter for award made July 2, 1997 under
     the 1995 Incentive Stock Plan.

o    Enrollment Agreement under Senior Executive Deferred Compensation Plan.

o    Elections pursuant to Occidental Petroleum Corporation Deferred
     Compensation Plan.

EX-10.4

                                                                    EXHIBIT 10.4

                                    AGREEMENT


     This Employment Agreement is made as of the 17th day of November, 2000 by
and between Occidental Petroleum Corporation, a Delaware Corporation
(hereinafter referred to as "Employer", and Stephen I. Chazen (hereinafter
referred to as "Employee").

                                   WITNESSETH
                                   ----------

     WHEREAS, Employee has been rendering services since May 1, 1994, and

     WHEREAS, the parties now desire to provide for a continuation of Employee's
employment by Employer, and to specify the rights and obligations of the parties
during such continued employment;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein, Employer and Employee hereby agree to continue such employment upon the
following terms and conditions:

     1. Duties. Employee shall perform the duties of Executive Vice President
and Chief Financial Officer, or shall serve in such other capacity and with such
other duties for Employer as the chief executive officer of Employer may direct.
In performing such duties, Employee will comply with Employer's Code of Business
Conduct and Corporate Policies, as the same may be amended from time to time.

     2. Term of Employment. The term of employment shall be for a period of five
(5) years, commencing on November 1, 2000, and ending midnight October 31, 2005,
unless terminated prior thereto in accordance with the provisions of this
Agreement, or unless extended by mutual agreement in accordance with Paragraph 8
hereof.

     3. Compensation. For the services to be performed hereunder, Employee shall
be compensated by Employer at the rate of not less than five hundred seventy-two
thousand dollars ($572,000) per annum, payable semi-monthly. The minimum salary
hereunder shall be automatically adjusted to the level of any increase in annual
compensation as the Employer may determine during the term of this Agreement.

     4. Participation in Benefit and Executive Programs. Employee shall be
eligible to participate in all benefit programs and under the same terms and
conditions as are generally applicable to salaried employees and senior
executives of Employer during the term of this Agreement. These benefits include
life insurance in the event of death equivalent to two (2) times base pay while
employed. Employee shall also be



eligible to participate in (i) Employer's Executive Incentive Compensation Plan
and (ii) Employer's 1995 Incentive Stock Plan and any successor or replacement
plan, as long as Employer continues such plans during the term of this
Agreement, and to receive awards or grants under such Plans at Employer's sole
discretion. Employee shall be entitled to a total of four (4) weeks of paid
vacation in each contract year.

     5. Exclusivity of Services. Employee agrees to devote his full-time,
exclusive services to Employer hereunder, except for such time as Employee may
require in connection with his personal investments.

     6. Termination.

          (a) Voluntary Termination. Employee may voluntarily resign, and such
resignation shall not be deemed to be a breach of this Agreement, so long as
Employer is provided at least sixty (60) days' notice of any resignation.

          (b) Cause. Notwithstanding the term of this Agreement, Employer may
discharge Employee and terminate this Agreement without severance or other pay
upon thirty (30) days' written notice or pay in lieu of such notice for material
cause, including without limitation, (i) failure to satisfactorily perform his
duties or responsibilities hereunder or negligence in complying with Employer's
legal obligations, (ii) refusal to carry out any lawful order of Employer, (iii)
breach of any legal duty to Employer, (iv) breach of Paragraph 5 of the
Agreement, or (v) conduct constituting moral turpitude or conviction of a crime
which may diminish Employee's ability to effectively act on the Employer's
behalf or with or on behalf of others, or (vi) death. In the case of events (i)
through (v) above, Employer shall give Employee notices of such cause and
Employee shall have thirty (30) days to cure such breach. In the event of death,
Employer will provide the estate of the deceased Employee a payment in addition
to any other payment due and payable, equivalent to a pro-rata bonus for the
year of death.

          (c) Incapacity. If, during the term of this Agreement, Employee is
incapacitated from performing the essential functions of his job pursuant to
this Agreement by reason of illness, injury, or disability, Employer may
terminate this Agreement by at least one week's written notice to Employee, but
only in the event that such conditions shall aggregate not less than one-hundred
eighty (180) days during any twelve (12) month period. In the event Employee
shall (i) continue to be incapacitated subsequent to termination for incapacity
pursuant this Paragraph 6(b), and (ii) be a participant in and qualify for
benefits under Employer's Long Term Disability Plan ("LTD"), then Employer will
continue to compensate Employee, for so long as Employee remains eligible to
receive LTD benefits, in an amount equal to the difference between sixty percent
(60%) of Employer's annual compensation as set forth in Paragraph 3 hereof and
the maximum annual benefit under the LTD, payable monthly on a pro rated basis.

                                       2


          (d) Without Cause. Employer may at any time terminate the employment
of Employee without cause or designate a termination for cause as a termination
without cause, and in such event Employer shall, in lieu of continued
employment, compensate Employee in an amount equal to two (2) times the sum of
Employee's highest annual base salary and annual bonus target, such amount
payable in equal monthly installments over two (2) years (the "Compensation
Period"). In the event that Employee dies during the Compensation Period, any
remaining payments due will be made to Employee's estate.

          During the Compensation Period, Employee shall continue to be eligible
to (i) participate in all employee benefit plans of Employer, in which he is
participating at the time of the notice and so long as such plans are available
to salaried employees and senior executives, and (ii) exercise all stock options
previously granted to Employee under Employer's 1987 Stock Option Plan, 1995
Incentive Stock Plan and any successor or replacement plans, which options are
or become exercisable under the provisions of such Plans.

          Following the Compensation Period, Employee's employment shall
continue (as a consultant to Employer) for an additional period until October
31, 2005 (the "Consultancy Period"), during which additional period Employee
will receive a salary at the annual rate of fifty thousand dollars ($50,000)
payable semi-monthly. During both the Compensation Period and the Consultancy
Period, any award(s) to Employee pursuant to Employer's 1977 Executive Long-Term
Incentive Stock Purchase Plan, 1995 Incentive Stock Plan and any successor or
replacement plans, shall continue to vest in the same manner and in the same
amounts as such award(s) would have vested if Employee had continued as a
full-time employee.

     7. Confidential Information. Employee agrees that he will not divulge to
any person, nor use to the detriment of Employer or any of its affiliates or
subsidiaries, nor use in any business or process of manufacture competitive with
or similar to any business or process of manufacture of Employer or any of its
affiliates or subsidiaries, at any time during employment by Employer or
thereafter, any trade secrets or confidential information obtained during the
course of his employment with Employer, without first obtaining the written
permission of Employer.

     Employee agrees that, at the time of leaving the employ of Employer, he
will deliver to Employer, and not keep or deliver to anyone else, any and all
credit cards, notebooks, memoranda, documents and, in general, any and all
material relating to Employer's business, including copies therefor, whether in
paper or electronic format.

     8. Modification. This Agreement contains all the terms and conditions
agreed upon by the parties hereto, and no other agreements, oral or otherwise,
regarding the subject matter of this Agreement shall be deemed to exist or bind
either of

                                       3


the parties hereto. This Agreement cannot be modified except by a subsequent
writing signed by both parties.

     9. Prior Agreement. This Agreement supersedes and replaces any and all
previous agreements between the parties.

     10. Severability. If any provision of this Agreement is illegal and
unenforceable in whole or in part, the remainder of this Agreement shall remain
enforceable to the extent permitted by law.

     11. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of California. In the event that any
ambiguity or questions of intent or interpretation arise, no presumption or
binder of proof shall arise favoring or disfavoring the Employer by virtue of
authorship of this Agreement and the terms and provisions of this Agreement
shall be given their meaning under law.

     12. Assignment. This Agreement shall be binding upon Employee, his heirs,
executors and assigns and upon Employer, its successors and assigns.

     13. Arbitration. In consideration for entering into this Agreement and for
the position, compensation, benefits and other promises provided hereunder, the
Employee and Employer agree to be bound by the arbitration provisions attached
hereto as Attachment 1 and incorporated herein by this reference.


     IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.


                                            OCCIDENTAL PETROLEUM CORPORATION


                                           By:             /s/ RAY R. IRANI
                                                   -----------------------------
                                           Title:           Chairman & CEO
                                                   -----------------------------


                                            EMPLOYEE:

                                                    /s/ STEPHEN I. CHAZEN
                                                   -----------------------------
                                                         Stephen I. Chazen

                                       4



                                  ATTACHMENT 1

                      ARBITRATION PROVISIONS ("Provisions")
              Incorporated by Reference into and Made a Part of the
          Agreement, dated November 1, 2000 (the "Agreement"), between
                Occidental Petroleum Corporation (the "Employer")
                     and Stephen I. Chazen (the "Employee")

     In recognition of the fact that differences may arise between the Employer
and the Employee arising out of or relating to certain aspects of the Employee's
employment with the Employer or the termination of that employment, and in
recognition of the fact that resolution of any differences in the courts is
rarely timely or cost-effective for either party, the Employer and Employee have
agreed to the incorporation of the Provisions into the Agreement in order to
establish and gain the benefits of a speedy, impartial and cost-effective
dispute resolution procedure. By so doing, the Employer and the Employee
mutually agree to arbitrate Claims (as defined below) and each knowingly and
voluntarily waive their rights before a jury. Each party's promise to resolve
Claims (as defined below) by arbitration in accordance with these Provisions is
consideration for the other party's like promise, in addition to any other
consideration.

1.   Claims

     1.1 Except as provided in paragraph 1.2 below, "Claims" (collectively
called "Claim" or "Claims" in these Provisions) means all claims or
controversies between the Employer and Employee or between the Employee and
others arising out of, or relating to or concerning the Employee's employment
with the Employer or termination thereof for which a state or federal court
otherwise would be authorized to grant relief, including, but not limited to,
claims based on any purported breach of contract, tort, state or federal statute
or ordinance, common law, constitution or public policy, claims for wages or
other compensation, or of discrimination, or violation of public policy of any
type. Claims expressly include the Employee's Claims against the Employer, and
any subsidiary and related or affiliated entity, successor or assign, and any of
their officers, directors, employees, managers, representatives, attorneys or
agents, and Claims against others arising out of, relating to or concerning the
Employee's employment with the Employer or termination thereof.

     1.2 These Provisions do not apply to or cover: claims for workers'
compensation benefits, claims for unemployment compensation benefits, or claims
for which the National Labor Relations Board has exclusive jurisdiction; claims
by the Employer for injunctive and/or other equitable relief for intellectual
property, unfair competition and/or the use and/or unauthorized disclosure of
trade secrets or confidential information; and claims based upon an employee
pension or benefit plan the terms of which contain an arbitration or other
non-judicial resolution procedure, in which case the provisions of such plan
shall apply. Employee shall further retain the right to seek injunctive and/or
other equitable relief expressly made available by a statute which forms the
basis of a Claim which is subject to arbitration under these Provisions. Where
one or more of the included Claims in a dispute are covered under these
Provisions and one or



more of the included Claims in the dispute are not covered under these
Provisions, such covered and non-covered claims shall be separated and shall be
heard separately in the appropriate forum for each claim.

2.   Agreement to Arbitrate All Claims

     2.1 Except for claims excluded from these Provisions by paragraph 1.2 above
and as otherwise provided in paragraph 1.2 and 4.1, the Employer and the
Employee hereby agree to the resolution by exclusive, final and binding
arbitration of all Claims.

     2.2 The parties further agree that any issue or dispute concerning the
formation, applicability, interpretation, or enforceability of these Provisions,
including any claim or contention that all or any part of these Provisions is
void or voidable, shall be subject to arbitration as provided herein. The
arbitrator, and not any federal, state or local court or agency, shall have
authority to decide any such issue or dispute.

3.   Governing Law

     3.1 Except as modified by these Provisions, the arbitration shall be
conducted pursuant to the rules set forth in the California Arbitration Act,
California Civil Code or Procedure Section 1281, et. seq.

     3.2 The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the State of California, or federal law, or both, as
applicable to the Claims asserted.

4.   Binding Effect

     4.1 The arbitration Award (see Section 10, herein) shall be final and
binding on the parties except that both parties shall have the right to appeal
to the appropriate court any errors of law in the decision rendered by the
Arbitrator.

     4.2 The Award may be entered as a judgment in any court of competent
jurisdiction and shall serve as a bar to any court action for any Claim or
allegation which was, or could have been, raised in Arbitration.

     4.3 For Claims covered by these Provisions, Arbitration is the exclusive
remedy, except as provided by paragraph 1.2. The parties shall be precluded from
bringing or raising in court or before any other forum any dispute which could
have been brought or raised pursuant to Arbitration.

     4.4 Nothing in these Provisions shall prevent a party from pursuing any
legal right to bring an action to vacate or enforce an Award or to compel
arbitration pursuant to applicable California law.

                                       2


5.   Initiating Arbitration

     To initiate the arbitration process, the aggrieved party must provide the
other party or parties with: a written request to arbitrate any covered Claims
which states the Claim or Claims for which arbitration is sought. The written
request to arbitrate must be received within the limitations periods applicable
under the law to such Claims.

6.   Selection of the Arbitrator

     6.1 All Claims shall be decided by a single neutral decision-maker, called
the "Arbitrator."

     6.2 To be qualified to serve, the Arbitrator must be an attorney in good
standing with at least seven years experience in employment law or a retired
judge and be available to hear the matter within sixty (60) days of selection
and on consecutive days.

     6.3 Within fifteen calendar days after receipt of the written request to
arbitrate, the parties will attempt to agree on the selection of a qualified
Arbitrator pursuant to paragraph 6.2 above. If the parties fail to agree on the
selection of an Arbitrator within that fifteen calendar day period, the Employer
will designate an alternate dispute resolution service (by way of example,
American Arbitration Association, National Arbitration Forum, Judicial
Arbitration and Mediation Services/Endispute) which has the capacity of
providing the parties with a list of potential qualified arbitrators. The
parties shall request that designated alternate dispute resolution service to
provide them with a list of nine persons who meet the requirements of paragraph
6.2 above. Each party shall rate the nine names by giving the most preferred
arbitrator the number nine and using descending successive numbers to rate the
remaining choices in descending order of that party's preference and returning
the list to the alternate dispute resolution service for calculation. The
arbitrator candidate with the highest combined rating will be the Arbitrator.
The functions of the alternate dispute resolution service shall be strictly
limited to providing the list of arbitrator candidates and tallying the
respective parties' ratings of the candidates in accordance with this Section 6
and no rules of that service shall otherwise apply.

7.   Arbitration Procedures:

     7.1 All parties may be represented by counsel throughout the arbitration
process, including without limitation, at the arbitration hearing.

     7.2 The Arbitrator shall afford each party a full and fair opportunity to
present relevant and material proof, to call and cross-examine witnesses, and to
present its argument.

     7.3 The Arbitrator shall not be bound by any formal rules of evidence with
the exception of applicable law regarding the attorney-client privilege and work
product

                                       3


doctrine, and any applicable state or federal law regarding confidentiality of
documents and other information (including, without limitation, pursuant to
rights of privacy).

     7.4 The Arbitrator shall decide the relevance of any evidence offered, and
the Arbitrator's decision on any question of evidence or argument shall be final
and binding.

     7.5 The Arbitrator may receive and consider the evidence of witnesses by
affidavit and shall give it such weight as the Arbitrator deems appropriate
after consideration of any objection made to its admission.

     7.6 Either party, at its expense, may arrange and pay for the cost of a
court reporter to provide a stenographic record of the proceedings. The other
party may obtain a copy of the recording by paying the reporter's normal fee for
such copy. If both parties agree to utilize the services of a court reporter,
the parties shall share the expense equally and shall be billed and responsible
for payment individually.

     7.7 Either party shall have the right to file an pre- or post-hearing
brief. The time for filing such briefs shall be set by the Arbitrator.

     7.8 The Arbitrator has authority to entertain a written or oral motion to
dismiss and motion for summary judgment, dispositive of all or part of any
Claim, to which the Arbitrator shall apply the standards governing such motions
under the Federal Rules of Civil Procedure.

8.   Discovery

     8.1 Discovery shall be governed by this paragraph 8, notwithstanding Code
of Civil Procedure Section 1283.05 to the contrary.

     8.2 Discovery shall be conducted in the most expeditious and cost-effective
manner possible, and shall be limited to that which is relevant and for which
the party seeking it has substantial, demonstrable need.

     8.3 All parties shall be entitled to receive, reasonably prior to the
hearing, copies of relevant documents which are requested in writing, clearly
described and governed by paragraph 8.2 above, and sought with reasonable
advance notice given the nature of the requests. Upon request, Employee shall
also be entitled to a true copy of his or her personnel file kept in the
ordinary course of business and pursuant to the Employer policy. Any other
requests for documents shall be made by subpoena as provided for in Section 9
herein.

     8.4 Except as mutually agreed by the parties, all parties shall be entitled
to submit no more than twenty interrogatories (including subparts) and twenty
requests for admission (including subparts), on each of the other parties, which
are requested in

                                       4

writing, clearly described and governed by paragraph 8.2 above, and sought with
reasonable advance notice given the nature of the requests.

     8.5 Upon reasonable request and scheduling, each party shall be entitled to
take three depositions in total of relevant parties, representative of the
opposing party, or third parties, of up to two days duration each.

     8.6 Physical and/or mental examinations may be conducted in accordance with
the standards established by the Federal Rules of Civil Procedure.

     8.7 At a mutually agreeable date, the parties will exchange lists of
experts who will testify at the arbitration. Each party may depose the other
party's experts and obtain documents they reviewed and relied upon and these
depositions will not be charged against the party's limit of three depositions.

     8.8 Any disputes relative to discovery or requests for discovery other than
specifically provided for herein, shall be presented to the Arbitrator who shall
make final and binding decisions in accordance with paragraphs 8.1 and 8.2
herein.

9.   Subpoenas

     9.1 Subject to formal request and a determination of both need and
relevance by the Arbitrator in accordance with paragraphs 8.1 and 8.2 above,
each party may issue a subpoena for production of documents or persons (other
than those provided for in Sections 8.3, 8.5 and 8.7) relevant to the procedure.
The Arbitrator's decision regarding relevance and the need for subpoenas shall
be final and binding.

     9.2 The Arbitrator is empowered to subpoena witnesses or documents to the
extent permitted in a judicial proceeding, upon his or her own initiative or at
the request of a party.

     9.3 The party requesting the production of any witness or proof shall bear
the costs of such production.

10.  The Award

     10.1 The Arbitrator shall render his or her decision and award
(collectively the "Award") based solely on the evidence and authorities
presented, the applicable policies of the Employer, any applicable written
employment agreement, the applicable law argued by the parties, and these
Provisions as interpreted by the Arbitrator.

     10.2 The Award shall be made promptly by the Arbitrator, and unless
otherwise agreed by the parties, not later than sixty (60) days from the closing
of the hearing, or the date post-hearing briefs are filed, whichever is later.

                                       5


     10.3 The Award shall be in writing and signed and dated by the Arbitrator.
The Award shall decide all issues submitted, shall contain express findings of
fact and law (including findings on each issue of fact and law raised by a
party), and provide the reasons supporting the decision including applicable
law. The Arbitrator shall give signed and duplicate original copies of the Award
to all parties at the same time.

11.  Damages and Relief

     11.1 The Arbitrator shall have the same authority to award remedies and
damages as provided to a judge and/or jury under applicable state or federal
laws, where the aggrieved party has met his or her burden of proof.

     11.2 Both parties have a duty to mitigate their damages by all reasonable
means. The Arbitrator shall take a party's failure to mitigate into account in
granting relief in accordance with applicable state and federal law.

     11.3 Arbitration of damages or other remedies may be conducted in a
bifurcated proceeding.

12.  Fees and Expenses

     12.1 All parties shall share equally the fees of the Arbitrator. Each party
will deposit funds or post other appropriate security for its share of the
Arbitrator's fee, in an amount and manner determined by the Arbitrator, at least
ten (10) days before the first day of hearing. Additionally, each party shall
pay for its own expenses associated with the arbitration process and attorneys'
fees, if any. If any party prevails on a statutory claim which entitles the
prevailing party to attorneys' fees, or if there is a written agreement
providing for fees, the Arbitrator may award reasonable fees to the prevailing
party in accordance with such statute or agreement.

     12.2 The Arbitrator may additionally award either party its reasonable
attorneys' fees and costs, including reasonable expenses associated with
production of witnesses or proof, upon a finding that the other party (a)
engaged in unreasonable delay, or (b) failed to comply with the Arbitrator's
discovery order.

                                       6

EX-10.6

                                                                    EXHIBIT 10.6

                        OCCIDENTAL PETROLEUM CORPORATION
                            10889 WILSHIRE BOULEVARD
                          LOS ANGELES, CALIFORNIA 90024
                                 (310) 208-8800


    DR. RAY R. IRANI
 CHAIRMAN OF THE BOARD
          AND
CHIEF EXECUTIVE OFFICER


                                November 17, 2000


Donald P. de Brier
Executive Vice President and General Counsel
Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, California  90024

Dear Donald:

     If you concur, clause 7(c) of your Employment Agreement, dated as of April
3, 1998, shall by this letter be amended to be and read as follows:

          "(c) Without Cause. Employer may at any time terminate the
     employment of Employee without cause or designate a termination for
     cause as a termination without cause, and in such event Employer
     shall, in lieu of continued employment, compensate Employee in an
     amount equal to two (2) times the sum of Employee's highest annual
     base salary and annual cash bonus target, such amount payable in equal
     monthly installments over two (2) years (the "Compensation Period").
     In the event the Employee dies during the Compensation Period, any
     remaining payments due will be made to Employee's estate."

          If the foregoing amendment is acceptable to you, please execute the
     form of acceptance set out below, whereupon this amendment shall become
     effective as of the date of this letter.

                                    Sincerely,

                                    Occidental Petroleum Corporation

                                    By:    /s/ RAY R. IRANI
                                         ----------------------------
                                            Dr. Ray R. Irani


Accepted and agreed:

  /s/ DONALD P. DE BRIER
- -----------------------------
     Donald P. de Brier

EX-12

                                                                      EXHIBIT 12



                OCCIDENTAL PETROLEUM CORPORATION AND SUBSIDIARIES
       COMPUTATION OF TOTAL ENTERPRISE RATIOS OF EARNINGS TO FIXED CHARGES
                   FOR THE FIVE YEARS ENDED DECEMBER 31, 2000
                      (Amounts in millions, except ratios)



                                                                    2000       1999        1998        1997        1996
============================================================   =========   =========   =========   =========   =========
                                                                                                
Income from continuing operations (a)                          $   1,785   $     699   $     400   $     245   $     486
                                                               ---------   ---------   ---------   ---------   ---------

Add:
     Provision for taxes on income (other than
        foreign oil and gas taxes)                                   871         306         204          47          99
     Interest and debt expense(b)                                    540         515         576         446         492
     Portion of lease rentals representative of the interest
        factor                                                         6          31          36          39          38
                                                               ---------   ---------   ---------   ---------   ---------
                                                                   1,417         852         816         532         629
                                                               ---------   ---------   ---------   ---------   ---------

Earnings before fixed charges                                  $   3,202   $   1,551   $   1,216   $     777   $   1,115
                                                               =========   =========   =========   =========   =========
Fixed charges
     Interest and debt expense including capitalized
        interest(b)                                            $     543   $     522   $     594   $     462   $     499
     Portion of lease rentals representative of the interest
        factor                                                         6          31          36          39          38
                                                               ---------   ---------   ---------   ---------   ---------
     Total fixed charges                                       $     549   $     553   $     630   $     501   $     537
                                                               =========   =========   =========   =========   =========

Ratio of earnings to fixed charges                                  5.83        2.80        1.93        1.55        2.08
============================================================   =========   =========   =========   =========   =========

(a)  Includes: 1) minority interest in net income of majority-owned subsidiaries
     and partnerships having fixed charges, and 2) income from
     less-than-50-percent-owned equity investments adjusted to reflect only
     dividends received.
(b)  Includes proportionate share of interest and debt expense of
     50-percent-owned equity investments.

EX-21

                                                                      EXHIBIT 21



                              LIST OF SUBSIDIARIES

The following is a list of the Registrant's subsidiaries at December 31, 2000,
other than certain subsidiaries that did not in the aggregate constitute a
significant subsidiary.



                                                                                Jurisdiction
Name                                                                            of Formation
- ----                                                                            ------------
                                                                             
INDSPEC Holding Corporation                                                      Delaware
Laurel Industries, Inc.                                                          Ohio
Natural Gas Odorizing, Inc.                                                      Oklahoma
Occidental Andina, LLC                                                           Delaware
Occidental Chemical Chile, S.A.I.                                                Chile
Occidental Chemical Corporation                                                  New York
Occidental Chemical Holding Corporation                                          California
Occidental Chemical International, Inc.                                          California
Occidental Crude Sales, Inc. (International)                                     Delaware
Occidental de Colombia, Inc.                                                     Delaware
Occidental Energy Marketing, Inc.                                                Delaware
Occidental Exploration and Production Company                                    California
Occidental International Exploration and Production Company                      California
Occidental International Holdings Ltd.                                           Bermuda
Occidental International Oil and Gas Ltd.                                        Bermuda
Occidental of Elk Hills, Inc.                                                    Delaware
Occidental of Oman, Inc.                                                         Nevis
Occidental of Russia (Cyprus) Limited                                            Cyprus
Occidental of Russia Ltd.                                                        Bermuda
Occidental Oil and Gas Holding Corporation                                       California
Occidental Peninsula, Inc.                                                       Delaware
Occidental Peninsula II, Inc.                                                    Nevis
Occidental Permian Ltd.                                                          Texas
Occidental Petrochem Partner 2, Inc.                                             Delaware
Occidental Petroleum (Pakistan), Inc.                                            Delaware
Occidental Petroleum (South America), Inc.                                       Delaware
Occidental Petroleum Investment Co.                                              California
Occidental Petroleum of Qatar Ltd.                                               Bermuda
Occidental PVC LP, Inc.                                                          Delaware
Occidental Quimica do Brasil Ltda.                                               Brazil
Occidental Receivables, Inc.                                                     California
Occidental Texas Pipeline, L.P.                                                  Delaware
Occidental Tower Corporation                                                     Delaware
Occidental Yemen Ltd.                                                            Bermuda
Oxy CH Corporation                                                               California
Oxy Chemical Corporation                                                         California
Oxy Energy Services, Inc.                                                        Delaware
Oxy Long Beach, Inc.                                                             Delaware
Oxy Oil Partners, Inc.                                                           Delaware
OXY USA Inc.                                                                     Delaware
Oxy Vinyls Canada Inc.                                                           Canada
Oxy Vinyls, LP                                                                   Delaware
Oxy Westwood Corporation                                                         California
Repsol Occidental Corporation                                                    Delaware

EX-23

                                                                      EXHIBIT 23


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

     As independent public accountants, we hereby consent to the incorporation
by reference of our report, dated February 7, 2001, appearing in Occidental
Petroleum Corporation's Annual Report on Form 10-K for the year ended December
31, 2000, into Occidental Petroleum Corporation's previously filed Registration
Statements Nos. 33-5487, 33-5490, 33-14662, 33-23798, 33-40054, 33-44791,
33-47636, 33-60492, 33-59395, 33-63991, 33-64719, 333-02901, 333-11725,
333-11897, 333-17879, 333-21019, 333-49207, 333-52053, 333-67385, 333-69303,
333-72719, 333-72721, 333-78031, 333-79613, 333-79541, 333-37970 and 333-55404.


                                     /s/ ARTHUR ANDERSEN LLP


Los Angeles, California
March 9, 2001