Section 1 – Registrant’s Business and Operations

Item 1.01. Entry into a Material Definitive Agreement

On October 12, 2005, in its capacity as Administrator of the Occidental Petroleum Corporation 1995 Incentive Stock Plan and 2001 Incentive Compensation Plan, the Executive Compensation and Human Resources Committee of the Board of Directors of Occidental Petroleum Corporation approved the amendment of the outstanding non qualified stock options (“NQSOs”) held by Occidental’s Section 16 reporting officers. The amendment, which is subject to the consent of such optionees, reduces the number of shares of Occidental Common Stock that the optionees are entitled to receive upon exercise. As amended, the options will entitle the optionee to receive, after offset for tax withholding, only the number of whole shares of Occidental Common Stock obtained by dividing (i) the spread between the aggregate Option Price of the NQSOs exercised and their aggregate Exercise Value by (ii) the Exercise Value. For the purpose of the foregoing calculation, the Exercise Value equals the fair market value of one share of Occidental Common Stock at the date and time of exercise (unless otherwise required by the administrator).

Section 8 – Other Events

Item 8.01. Other Events

At its October 13, 2005 meeting, the Board of Directors of Occidental adopted the policy set forth below to replace Occidental’s previous Golden Parachute Policy:

Golden Parachute Policy

At the 2005 Annual Meeting of Stockholders, a stockholder proposal regarding future golden parachutes passed with a 58.72% vote.* In response to the vote, it was the sense of the Board that it would be appropriate to review the current policy on golden parachutes, to determine whether any revisions to that policy might be appropriate. The Board was also mindful of the fact that the ability to provide an appropriate level of severance is a factor in a company’s ability to attract and retain talented employees. The new Golden Parachute Policy is intended to balance the ongoing need of the Corporation to attract and retain talented employees with the desire of the stockholders to approve any golden parachute or severance benefits that exceed certain limits. Accordingly, the Board has determined to adopt the policy set forth below to replace the previous Golden Parachute Policy.

It is the policy of the Board that the Corporation shall not grant Golden Parachute Benefits to any Senior Executive which exceeds 2.99 times his or her salary plus

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^*     [RESOLVED: Allow Vote regarding Future Golden Parachutes. Shareholders request that our Board seek shareholder approval for future golden parachutes for senior executives. This applies to benefits exceeding 2.99% of the sum of the executive’s base salary plus bonus. Future golden parachutes include agreements renewing, modifying or extending existing severance agreements or employment agreements with golden parachute or severance provisions. This Includes that golden parachutes are not given for a change in control or merger which is approved but is not completed. Or for executives who transfer to a successor company. This proposal would Include to the fullest extent each golden parachute that our Board has or will have the power to grant or modify. Our company would have the flexibility of seeking approval after tentative agreement on golden parachutes.]

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