When Berkshire Hathaway effectively loaned Occidental Petroleum $10 billion to fund its acquisition of Anadarko Petroleum in the spring of 2019, Wall Street analysts questioned the logic behind the deal.
On the outside, it did appear to be a strange transaction.
We know the deal would have been negotiated and approved by Warren Buffett himself, as he is usually responsible for any transactions worth more than $1 billion.
However, the Oracle of Omaha has minimal experience in the oil and gas sector. Historically, his experience has been in consumer goods, insurance, and other financial stocks. The decision to pump $10 billion into Occidental, a shale oil producer with a weak balance sheet, appeared strange at the time.
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