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LEASE COMMITMENTS
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
LEASE COMMITMENTS
NOTE 7 - LEASE COMMITMENTS

Occidental identifies leases through its accounts payable and contract monitoring processes. Lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease assets include the discounted value of future lease payments, upfront payments and costs incurred to execute the lease and are amortized on a straight-line basis over the lease term. Occidental assesses the likelihood of exercising renewal, termination and purchase options to determine the lease term. Occidental uses its incremental borrowing rate at commencement date to determine the present value of lease payments. The incremental borrowing rate is the rate of interest that Occidental would pay to borrow an amount equal to the lease payments over a similar term on a collateralized basis in a similar economic environment. For assets except drilling rigs, Occidental does not separate lease and non-lease components as the non-lease portions were not significant.
Occidental has operating leases for oil and gas exploration and development equipment, including offshore and onshore drilling rigs of $385 million, office space of $339 million, compressors of $125 million, railcars of $112 million, marine transportation vessels of $110 million and $45 million consisting of storage facilities and other field equipment. Operating leases also include easements and real estate of $57 million. These operating leases have contract expiration terms ranging from one to 10 years.
Occidental’s finance leases include compressors of $454 million, office space of $255 million, and $28 million of other assets. Property, plant and equipment included $738 million of finance leases at December 31, 2023.

The following summarizes maturities of lease liabilities at December 31, 2023:
millions
Operating Leases (a)
Finance Leases (b)
Total
2024
$453 $146 $599 
2025
291 136 427 
2026
194 126 320 
2027
101 113 214 
2028
71 85 156 
Thereafter190 256 446 
Total lease payments1,300 862 2,162 
Less: Discount(127)(125)(252)
Total lease liabilities$1,173 $737 $1,910 
(a)The weighted-average remaining lease term is 4.5 years and the weighted-average discount rate is 4.94%.
(b)The weighted-average remaining lease term is 6.3 years and the weighted-average discount rate is 4.61%.
The following tables present Occidental’s total lease cost and other information for operating and finance lease liabilities for the years ended December 31:

millions20232022
Lease Cost
Finance lease cost:
Amortization of right-of-use assets$126 $83 
Interest on lease liabilities27 20 
Operating lease cost398 374 
Short-term lease cost460 184 
Total lease cost$1,011 $661 
millions20232022
Cash payments related to leases
Operating cash flows from finance lease$27 $20 
Operating cash flows from operating leases$198 $191 
Investing cash flows from operating leases$183 $81 
Financing cash flows from finance leases$105 $83 
Changes in Right-of-Use assets
Right-of-use assets obtained in exchange for new finance lease liabilities $226 $85 
Right-of-use assets obtained in exchange for new operating lease liabilities $630 $525 
LEASE COMMITMENTS
NOTE 7 - LEASE COMMITMENTS

Occidental identifies leases through its accounts payable and contract monitoring processes. Lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease assets include the discounted value of future lease payments, upfront payments and costs incurred to execute the lease and are amortized on a straight-line basis over the lease term. Occidental assesses the likelihood of exercising renewal, termination and purchase options to determine the lease term. Occidental uses its incremental borrowing rate at commencement date to determine the present value of lease payments. The incremental borrowing rate is the rate of interest that Occidental would pay to borrow an amount equal to the lease payments over a similar term on a collateralized basis in a similar economic environment. For assets except drilling rigs, Occidental does not separate lease and non-lease components as the non-lease portions were not significant.
Occidental has operating leases for oil and gas exploration and development equipment, including offshore and onshore drilling rigs of $385 million, office space of $339 million, compressors of $125 million, railcars of $112 million, marine transportation vessels of $110 million and $45 million consisting of storage facilities and other field equipment. Operating leases also include easements and real estate of $57 million. These operating leases have contract expiration terms ranging from one to 10 years.
Occidental’s finance leases include compressors of $454 million, office space of $255 million, and $28 million of other assets. Property, plant and equipment included $738 million of finance leases at December 31, 2023.

The following summarizes maturities of lease liabilities at December 31, 2023:
millions
Operating Leases (a)
Finance Leases (b)
Total
2024
$453 $146 $599 
2025
291 136 427 
2026
194 126 320 
2027
101 113 214 
2028
71 85 156 
Thereafter190 256 446 
Total lease payments1,300 862 2,162 
Less: Discount(127)(125)(252)
Total lease liabilities$1,173 $737 $1,910 
(a)The weighted-average remaining lease term is 4.5 years and the weighted-average discount rate is 4.94%.
(b)The weighted-average remaining lease term is 6.3 years and the weighted-average discount rate is 4.61%.
The following tables present Occidental’s total lease cost and other information for operating and finance lease liabilities for the years ended December 31:

millions20232022
Lease Cost
Finance lease cost:
Amortization of right-of-use assets$126 $83 
Interest on lease liabilities27 20 
Operating lease cost398 374 
Short-term lease cost460 184 
Total lease cost$1,011 $661 
millions20232022
Cash payments related to leases
Operating cash flows from finance lease$27 $20 
Operating cash flows from operating leases$198 $191 
Investing cash flows from operating leases$183 $81 
Financing cash flows from finance leases$105 $83 
Changes in Right-of-Use assets
Right-of-use assets obtained in exchange for new finance lease liabilities $226 $85 
Right-of-use assets obtained in exchange for new operating lease liabilities $630 $525