EXHIBIT 10.3


                        OCCIDENTAL PETROLEUM CORPORATION
                        2001 INCENTIVE COMPENSATION PLAN
                             INCENTIVE STOCK OPTION
                              TERMS AND CONDITIONS


Date of Grant:               July 16, 2003

Number of Optioned Shares:   See "Shares Granted/Awarded" (Grant Acknowledgement
                             screen)

Option Price:                $31.13

Expiration Date:             July 16, 2013

Vesting Schedule:*           1st Anniversary    33 1/3 Percent of Number of
                                                Optioned Shares
                             2nd Anniversary    33 1/3 Percent of Number of
                                                Optioned Shares
                             3rd Anniversary    33 1/3 Percent of Number of
                                                Optioned Shares

The following TERMS AND CONDITIONS (these "Terms and Conditions") are set forth
as of the Date of Grant between OCCIDENTAL PETROLEUM CORPORATION, a Delaware
corporation ("Occidental") and, with its subsidiaries, (the "Company"), and the
Eligible Employee receiving this grant (the "Optionee").

1.   GRANT OF STOCK OPTION. Occidental grants to the Optionee as of the Date of
Grant a stock option (this "Option") to purchase up to the number of Optioned
Shares at the Option Price, from time to time, in accordance with these Terms
and Conditions and the Occidental Petroleum Corporation 2001 Incentive
Compensation Plan, as amended from time to time (the "Plan"). This Option is
intended to be an "incentive stock option" within the meaning of that term under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
any successor provision thereto. If these Terms and Conditions cannot be
construed in a manner to enable this Option to qualify as an incentive stock
option, the right to purchase the Optioned Shares on these Terms and Conditions
shall survive as if this Option were a nonqualified stock option.

2.   TERM OF OPTION. The term of this Option begins on the Date of Grant and
expires on the tenth anniversary of the Date of Grant (the "Expiration Date")
unless it is terminated earlier as provided in Section 6.

3.   RIGHT TO EXERCISE. Unless this Option has expired, terminated, or
accelerated, on each anniversary of the Date of Grant the amount of Optioned
Shares indicated above in the Vesting Schedule for such anniversary will become
exercisable on a cumulative basis until this Option is fully exercisable. In the
event that the Vesting Schedule results in fractional shares, the fractional
shares will be rounded the nearest whole share as follows: for Optioned Shares
vesting on the first anniversary, the fraction will be rounded up to the nearest
whole number; for Optioned shares vesting on the third anniversary, the fraction
will be rounded down to the nearest whole number; and for Optioned Shares
vesting on the second anniversary, the fraction will be rounded up or down to
the nearest whole number as necessary so that the sum of the three tranches of
Optioned Shares will equal the total number of Optioned Shares. This Option may
be exercised, in whole or in part, only for the number of Optioned Shares that
are vested on the date of exercise. The last date to exercise this Option is the
New York Stock Exchange trading day prior to the earlier of the date this Option
terminates and the Expiration Date.

4.   OPTION NONTRANSFERABLE. This Option may not be transferred nor assigned by
the Optionee other than to a beneficiary designated on a form approved by the
Company, by will or, if the Optionee dies without designating a beneficiary or a
valid will, by the laws of descent and distribution. During the Optionee's
lifetime, only the Optionee, or in the event of his or her legal incapacity, a
properly appointed guardian or legal representative, may exercise this Option.

5.   NOTICE OF EXERCISE; PAYMENT.

     (a)  To exercise this Option, the Optionee must give oral or written notice
to Occidental or any agent designated by Occidental to administer grants made
under the Plan. If Occidental has designated



an agent, notice must be given to the agent to be effective. The notice of
exercise must state the number of Optioned Shares for which this Option is being
exercised and the manner of payment. The date the notice is received is the
exercise date unless (i) notice is received after the close of trading on the
New York Stock Exchange or on a day which is not a New York Stock Exchange
trading day, in which case the exercise date is the next trading day on the New
York Stock Exchange, or (ii) if limit orders are permitted by the Administrator
or any agent designated by Occidental and the notice contains a limit order in
accordance with the procedures established by the Administrator or the agent,
then the exercise date is the trading date on the New York Stock Exchange during
the limit order period on which the price of the Common Stock traded on the New
York Stock Exchange reaches the price specified in the notice and there is a
single buyer willing to purchase the total number of shares specified in the
notice. The Optionee understands that limit orders will be processed in the
order received and there can be no assurances that there will be sufficient
buyers to process all limit orders received. If requested, any oral notice of
exercise shall be confirmed in writing the same day before the close of trading
on the New York Stock Exchange.

     (b)  Payment equal to the aggregate Option Price of the Optioned Shares
must be:

          (i)   in cash in the form of a certified or cashiers check or wire
                transfer,

          (ii)  by actual or constructive transfer to Occidental of
                nonforfeitable, nonrestricted Common Shares acquired by the
                Optionee more than six (6) months prior to the date of exercise,
                or

          (iii) by any combination of the foregoing methods of payment.

Common Shares that are transferred by the Optionee in payment of all or any part
of the Option Price shall be valued on the basis of their Fair Market Value on
the date of exercise. The requirement to pay cash shall be satisfied if the
Optionee makes arrangements with a broker that is a member of the National
Association of Securities Dealers, Inc. to sell a sufficient number of the
Optioned Shares, so that the net proceeds of the sale transaction will at least
equal the amount of the aggregate Option Price plus the amount of any taxes
required to be withheld, and pursuant to which the broker undertakes to deliver
the amount of the aggregate Option Price plus the amount of any taxes required
to be withheld, not later than the date on which the sale transaction will
settle in the ordinary course of business.

     (c)  If pursuant to the Occidental Petroleum Corporation Deferred Stock
Program (the "Deferral Program") the Optionee has elected to defer any gain
realized upon exercise of this Option, exercise of this Option will be made
pursuant to the terms and conditions of the Deferral Program.

6.   TERMINATION OF RIGHT TO EXERCISE. The right to exercise this Option
terminates automatically and without further notice on the date the Optionee
ceases to be an employee of the Company for any reason whatsoever, except as
follows:

     (a)  IF THE OPTIONEE DIES, the Optioned Shares will vest immediately as of
the date of the Optionee's death for the full number of Optioned Shares, and
this Option may be exercised up to the Expiration Date by a transferee
acceptable under Section 4 as an incentive stock option if the Optionee dies
while an employee or within three months of ceasing to be an employee for a
reason specified in Section 6(b) or Section 6(c) or as a nonqualified option if
the Optionee dies more than three months after ceasing to be an employee for a
reason specified in Section 6(b) or Section 6(c).

     (b)  IF THE OPTIONEE BECOMES PERMANENTLY AND TOTALLY DISABLED, the Optioned
Shares will continue to vest in accordance with the Vesting Schedule and this
Option may be exercised as an incentive stock option up to the sooner of (i) one
year after the disability first arose (the "Disability Period") and (ii) the
Expiration Date. If the Expiration Date is later than the last day of the
Disability Period, then for the period beginning on the first day after the
Disability Period up to the Expiration Date, the Optioned Shares will continue
to vest in accordance with the Vesting Schedule and this Option may be exercised
as a nonqualified option. For purposes of these Terms and Conditions, "to be
permanently and totally disabled" means to be unable to engage in any
substantial gainful activity by reason of an impairment which can be expected to
result in death or which has lasted, or can be expected to last for a continuous
period of at least twelve (12) months.


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     (c)  IF THE OPTIONEE RETIRES, the Optioned Shares will continue to vest in
accordance with the Vesting Schedule, and this Option may be exercised as an
incentive stock option up to the sooner of (i) three (3) months following the
last day of Optionee's employment (the "Retirement Period") and (ii) the
Expiration Date. If the Expiration Date is later than the last day of the
Retirement Period, then for the period beginning on the first day after the
Retirement Period up to the Expiration Date, the Optioned Shares will continue
to vest in accordance with the Vesting Schedule and this Option may be exercised
as a nonqualified stock option. For purposes of these Terms and Conditions,
"retire" means to retire either under a Company-sponsored retirement plan or
with the consent of the Company.

     (d)  IF THE OPTIONEE TERMINATES EMPLOYMENT WITH THE COMPANY FOR ANY REASON
OTHER THAN DEATH, PERMANENT AND TOTAL DISABILITY, RETIREMENT OR CAUSE (WHETHER
OR NOT IN BREACH OF LOCAL LABOR LAWS), the Optioned Shares will cease to vest as
of the close of business on the last day of Optionee's active employment, and
this Option may be exercised up to the sooner of (i) three (3) months following
the last day of Optionee's active employment and (ii) the Expiration Date but
only for the number of Optioned Shares exercisable as of the Optionee's last day
of employment pursuant to the Vesting Schedule. For the purposes of these Terms
and Conditions, "cause" means the Optionee's (w) failure to satisfactorily
perform the duties of his or her job or negligence in carrying out the Company's
legal obligations, (x) refusal to carry out any lawful order of the Company, (y)
breach of any legal duty to the Company; or (z) conduct constituting moral
turpitude or conviction of a crime which may diminish Optionee's ability to
effectively act on the Company's behalf or with or on behalf of others.

For the purposes of these Terms and Conditions, the continuous employment of the
Optionee with the Company will not be interrupted, and the Optionee will not be
deemed to cease to be an employee of the Company, by reason of the transfer of
his or her employment among the Company and its affiliates or an approved leave
of absence. The administrator shall have the exclusive discretion to determine
when the Optionee is no longer actively employed for purposes of this Option
grant.

7.   MANDATORY NOTICE BY OPTIONEE OF TRANSFER OF SHARES. If the Optionee sells,
exchanges, makes a gift of or transfers in any other way any of the Optioned
Shares either within two (2) years of the Date of Grant or within one (1) year
from the date shares are transferred to the Optionee following exercise of this
Option, the Optionee must notify the Company of the transfer within thirty (30)
days from the date of the transfer. The notice must state the principal terms of
the transfer, including the date of the transfer and the type and amount of
consideration received by the Optionee for the shares. The Optionee understands
that a transfer of shares within the periods specified in the first sentence of
this Section 7, including a "cashless" exercise to acquire the shares, will
result in the Optionee's loss of the tax benefits associated with an incentive
stock option.

8.   ACCELERATION OF OPTION. If a Change in Control Event as defined in the Plan
occurs, this Option shall become immediately exercisable for the full number of
Optioned Shares unless prior to the occurrence of the Change in Control Event,
the Administrator, as provided in Section 6.1 of the Plan, determines that such
Event will not accelerate this Option or that acceleration will occur for only
part of this Option or at a different time. Any such determination by the
Administrator is binding on the Optionee.

9.   NO EMPLOYMENT CONTRACT. Nothing in these Terms and Conditions confers upon
the Optionee any right with respect to continued employment by the Company, nor
limits in any manner the right of the Company to terminate the employment or
adjust the compensation of the Optionee.

10.  TAXES AND WITHHOLDING. If the Company must withhold any federal, state,
local or foreign tax in connection with the exercise of this Option, the
Optionee must pay the tax or make provisions that are satisfactory to the
Company for the payment thereof. The Optionee may satisfy all or any part of any
such withholding obligation by surrendering to the Company or any agent
designated by the Company to administer grants made under the Plan, Common
Shares that satisfy the requirements of Section 5(b)(ii) or a portion of the
Common Shares that are issued or transferred to the Optionee upon the exercise
of this Option. Any Common Shares so surrendered by the Optionee shall be
credited against the Optionee's withholding obligation at their Fair Market
Value on the date of exercise.

11.  COMPLIANCE WITH LAW. The Company will make reasonable efforts to comply
with all applicable federal, state and foreign securities laws; however, this
Option is not exercisable if its exercise would result in a violation of any
such law.


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12.  ADJUSTMENTS. The Option Price and the number or kind of shares of stock
covered by this Option may be adjusted as the Administrator determines pursuant
to Section 6.2 of the Plan in order to prevent dilution or expansion of the
Optionee's rights under these Terms and Conditions as a result of events such as
stock dividends, stock splits, or other change in the capital structure of
Occidental, or any merger, consolidation, spin-off, liquidation or other
corporate transaction or event having a similar effect. If any such adjustment
occurs, the Company will give the Optionee written notice of the adjustment
containing an explanation of the nature of the adjustment.

13.  RELATION TO OTHER BENEFITS. The benefits received by the Optionee under
these Terms and Conditions will not be taken into account in determining any
benefits to which the Optionee may be entitled under any profit sharing,
retirement or other benefit or compensation plan maintained by the Company,
including the amount of any life insurance coverage available to any beneficiary
of the Optionee under any life insurance plan covering employees of the Company.
The grant of this option does not create any contractual or other right to
receive future grants of options, or benefits in lieu of Options, even if
Optionee has a history of receiving Options or other stock awards.

14.  AMENDMENTS. Any amendment to the Plan will be deemed to be an amendment to
these Terms and Conditions to the extent it is applicable to these Terms and
Conditions; however, no amendment will adversely affect the rights of the
Optionee under these Terms and Conditions without the Optionee's consent.

15.  SEVERABILITY. If one or more of the provisions of these Terms and
Conditions is invalidated for any reason by a court of competent jurisdiction,
the invalidated provisions shall be deemed to be separable from the other
provisions of these Terms and Conditions, and the remaining provisions of these
Terms and Conditions will continue to be valid and fully enforceable.

16.  RELATION TO PLAN; INTERPRETATION. These Terms and Conditions are subject to
the terms and conditions of the Plan. In the event of any inconsistent
provisions between these Terms and Conditions and the Plan, the provisions of
the Plan control. Capitalized terms used in these Terms and Conditions without
definition have the meanings assigned to them in the Plan. References to
Sections are to Sections of these Terms and Conditions unless otherwise noted.

17.  ADMINISTRATIVE PROCEDURES. The Administrator, directly or through its
agent, reserves the right to adopt procedures with respect to the exercise of
this Option. In the event of any inconsistent provisions between such
procedures, these Terms and Conditions and the Plan, the provisions of the Plan
control.

18.  SUCCESSORS AND ASSIGNS. Subject to Section 4, the provisions of these Terms
and Conditions shall be for the benefit of, and be binding upon, the successors,
administrators, heirs, legal representatives and assigns of the Optionee, and
the successors and assigns of the Company.

19.  GOVERNING LAW. The laws of the State of Delaware govern the interpretation,
performance, and enforcement of these Terms and Conditions.

20.  NOTICES. Except as the Company may otherwise direct for exercise notices,
any notice to the Company provided for in this Agreement will be given to its
Secretary at 10889 Wilshire Boulevard, Los Angeles, California 90024, and any
notice to the Optionee will be addressed to the Optionee at his or her address
currently on file with the Company. Except as provided in Section 5 for exercise
notices, any written notice will be deemed to be duly given when received if
delivered personally or sent by telecopy, e-mail, or the United States mail,
first class registered mail, postage and fees prepaid, and addressed as provided
in this paragraph. Any party may change the address to which notices are to be
given by written notice to the other party as specified in the preceding
sentence.

21.  PRIVACY RIGHTS. The Company and the Optionee's employer hold or may receive
from any agent designated by the Company or any broker involved in the exercise
or sale of shares covered by this Option certain personal information about the
Optionee, including, but not limited to, the Optionee's name, home address and
telephone number, date of birth, social insurance number or other identification
number, salary, nationality, job title, any shares of stock or directorships
held in Occidental, details of all Options or any other entitlement to shares of
stock awarded, canceled, exercised, vested, unvested or


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outstanding in the Optionee's favor, for the purpose of implementing,
administering and managing the Plan, including complying with applicable tax and
securities laws ("Data"). Data may be transferred to any third parties assisting
in the implementation, administration and management of the Plan. These
recipients may be located in the Optionee's country or elsewhere, and may have
different data privacy laws and protections than the Optionee's country. By
accepting these Terms and Conditions, the Optionee authorizes the recipients to
receive, possess, use, retain and transfer the Data, in electronic or other
form, for the purposes described above, including transfer of such Data as may
be required to a broker or other third party with whom the Optionee may elect to
deposit any Common Shares acquired upon exercise of the Option. The Optionee
may, at any time, view Data, request additional information about the storage
and processing of Data, require any necessary amendments to Data or refuse or
withdraw the consents herein, in any case without cost, by contacting the
Administrator in writing. Refusing or withdrawing consent may affect the
Optionee's ability to participate in the Plan.

22.  ELECTRONIC DELIVERY. The Company may, in its sole discretion, decide to
deliver any documents related to this Option granted under the Plan or any
future options that may be granted under the Plan (if any) by electronic means
or to request the Optionee's consent to participate in the Plan by electronic
means. The Optionee hereby consents to receive such documents by electronic
delivery and, if requested, to participate in the Plan through an on-line or
electronic system established and maintained by the Company or another third
party designated by the Company.

23.  OPTIONEE'S REPRESENTATIONS AND RELEASES. By accepting the award, the
Optionee acknowledges that the Optionee has read these Terms and Conditions and
understands that the (i) grant of this Option is made voluntarily by Occidental
in its discretion with no liability on the part of any of its direct or indirect
subsidiaries and that, if the Optionee is not an employee of Occidental, the
Optionee is not, and will not be considered, an employee of Occidental but the
Optionee is a third party (employee of a subsidiary) to whom this Option is
granted; (ii) the future value of the Optioned Shares cannot be predicted and
Occidental does not assume liability in the event the Option has no value in the
future or of any loss to the Optionee from this Option or the Optioned Shares;
and, (iii) subject to the terms of any tax equalization agreement between the
Optionee and the entity employing the Optionee, the Optionee will be solely
responsible for the payment or nonpayment of taxes imposed or threatened to be
imposed by any authority of any jurisdiction.

In consideration of the grant of this Option, no claim or entitlement to
compensation or damages shall arise from termination of this Option or
diminution in value of this Option or Common Shares purchased through exercise
of this Option resulting from termination of the Optionee's employment by the
Company or the Optionee's employer (for any reason whatsoever and whether or not
in breach of local labor laws) and the Optionee irrevocably releases the Company
and, if not Occidental, the Optionee's employer from any such claim that may
arise; if, notwithstanding the foregoing, any such claim is found by a court of
competent jurisdiction to have arisen, then, by accepting these Terms and
Conditions, the Optionee shall be deemed irrevocably to have waived his or her
entitlement to pursue such claim.

*FOR OPTIONEES WHO RECEIVE BOTH AN INCENTIVE STOCK OPTION GRANT AND A
NON-QUALIFIED STOCK OPTION GRANT ON THE DATE OF GRANT, THE VESTING SCHEDULES FOR
THE COMBINED GRANTS WILL RESULT IN THE VESTING OF 33 1/3 PERCENT OF THE TOTAL
GRANTED OPTIONS ON EACH ANNIVERSARY, AS STATED IN THE VESTING SCHEDULE. HOWEVER,
EACH GRANT INDIVIDUALLY MAY NOT VEST 33 1/3 PERCENT PER YEAR, DUE TO REGULATORY
RESTRICTIONS REGARDING INCENTIVE STOCK OPTIONS. PURSUANT TO THE CODE, TO THE
EXTENT THAT THE AGGREGATE FAIR MARKET VALUE OF STOCK WITH RESPECT TO WHICH
INCENTIVE STOCK OPTIONS (UNDER ALL PLANS OF OCCIDENTAL), ARE EXERCISABLE FOR THE
FIRST TIME DURING A CALENDAR YEAR EXCEEDS $100,000, SUCH OPTIONS SHALL BE
TREATED AS A NON-QUALIFIED STOCK OPTIONS. THIS RULE IS APPLIED BY TAKING OPTIONS
INTO ACCOUNT IN THE ORDER IN WHICH THEY WERE GRANTED AND DETERMINING THE FAIR
MARKET VALUE OF THE STOCK AT THE TIME THE OPTION WAS GRANTED. YOU MAY VIEW
ONLINE A SPECIFIC VESTING SCHEDULE FOR YOUR GRANT BY SELECTING THE "GRANT
SUMMARY" SCREEN, CLICK ON THE GRANT DATE AND SELECT THE "VIEW DETAIL & HISTORY"
BUTTON.


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