Buffett Could Be Inching Closer To Control Over Oxy

Warren Buffett’s Berkshire Hathaway bought additional shares in Occidental Petroleum Corporation (NYSE: OXY) this week, bringing its stake to 15.3% in a move that could be seen as Buffett aiming for 20% of Oxy or bidding to buy the oil firm.

Berkshire Hathaway bought this week around 900,000 shares in Oxy, it announced in a filing with the US Securities and Exchange Commission (SEC) on Thursday.

Berkshire Hathaway now has more than 143 million shares in Occidental Petroleum, which equals 15.3%, Barron’s notes.

Buffett’s conglomerate started buying shares in Oxy earlier this year, and by early May, it already had 15.2%. As a holder of over 10% in a public company, Berkshire Hathaway now has to report new ownership shares within two business days.

The move could be seen as Buffett preparing to lift Berkshire Hathaway’s stake to 20%, which would give the company a different accounting treatment for Occidental and let it reflect a proportional share of Occidental’s earnings in its own results, Barron’s reports.

As of late, the legendary investor has added new shares in Oxy, as well as Chevron, suggesting that Buffett believes in the potential of those two energy companies.

Shares in Occidental were up by 2.67% in pre-market trade on Friday, while they have gained 90.66% year to date.

At Berkshire Hathaway’s annual meeting last month, Buffett said, referring to the Occidental investment, that he saw a lot of sense in the oil company’s latest presentation.

“And what [CEO] Vicki Hollub was saying made nothing but sense. And I decided that it was a good place to put Berkshire’s money,” Buffett said.

“She says she doesn’t know the price of oil next year. Nobody does. But we decided it made sense. And two weeks later, we had 14% of the company,” the Omaha investor added.

By Tsvetana Paraskova for Oilprice.com

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