How the Most Hyped U.S. Oil Merger in a Decade Went Bust

It was the kind of clear, crisp spring day that made people happy they lived in Houston—azaleas in bloom, the landscape aswirl in pink and coral and scarlet. Vicki Hollub, the CEO of Occidental Petroleum, strode triumphantly into a Woodlands conference center for a meeting of her newly expanded corporation last March. Not quite five and a half feet tall, dressed in one of her innocuous knit suits, she hardly looked the part of the oil and gas tycoon. But less than a year earlier she had out-oilmanned just about every oilman there was.

Hollub had engineered a $38 billion takeover of Anadarko Petroleum, which had made Oxy, as Occidental is commonly known, the dominant player in Texas’s Permian Basin, itself the dominant region in the booming domestic oil market of 2019. Hollub, who happened to be the first female head of an oil company so large, believed she had consummated the deal of the century, a “transformative” one, in the parlance of the day—a deal that would catapult Occidental, a second-tier oil company, into the first rank: gaining on Exxon, breathing down the necks of giants like Chevron, Shell, and BP in an energy-independent “Saudi America.”

For her cojones, Hollub was dubbed “Big Oil’s Big Dealmaker” by Bloomberg Businessweek. The Motley Fool investing website described her move as “attempting to pull off one of the greatest 21st-century acquisitions in upstream oil and gas.” CNN Business announced, “She went head-to-head with an oil company five times the size of her own. And won.”

Oxy had come from behind to best the much larger Chevron, with an eleventh-hour cash infusion of $10 billion from none other than Warren Buffett. Critics were baying that Hollub had overpaid; with the addition of Anadarko’s debt, the deal was valued at $58 billion. The specter of layoffs loomed. And now, inside an airless, windowless conference room, the former Anadarko—now Oxy—employees present were understandably restive. The meeting was supposed to be celebratory, but many were curious about how, exactly, the new company would get itself to Hollub’s proposed “next level.” She understood their anxiety. Trust, she believed, was a crucial element of leadership. And caring. A leader has to really care about a company’s employees.

Hollub was a sturdy woman, an engineer by training, “more comfortable in Nomex coveralls,” according to one colleague, than in designer clothes. She wore her brown hair sheared short. She had a small, winning gap between her teeth. People routinely described her as “down-to-earth.”

She delivered a forward-looking pep talk that day, but during a later presentation, an exec from her investor-relations department motioned her over. Leaning in, he whispered the bad news: Just hours after the opening of that day’s OPEC meeting in Vienna, the Saudis and the Russians were escalating a dispute over production levels and flooding the market. Oil prices were cratering, as was Oxy’s stock price. Hysterical shareholders were jamming the phone lines.

With that, tremors shook the world Hollub had envisioned, tiny cracks spreading through a foundation she had laid with great determination. The following week, the tremors became a quake: the World Health Organization declared COVID-19 a pandemic. “We knew things were looking grave with respect to demand,” Hollub would recall.

West Texas Intermediate crude had been selling in the range of $60 a barrel in January. In March the price dropped closer to $30. On April 20, it had collapsed to a devastating, never-in-a-million-years negative $37.63, due to a trading panic. Oxy stock, worth $47 a share in January, had dropped by March 9 to about $12 and would stay in that cold, dark nether region for months.

“It’s when our world turned,” Hollub told the women-in-energy group Pink Petro last May, in a rare interview.

She followed that statement with a stunned, war-weary smile, one that suggested she could not believe that things could go so wrong so fast. Hollub had followed the oil patch rules—looked on the bright side, bet on the come—and entangled herself in one of the biggest, boldest, no-good, very-bad oil field dramas in decades.

Even worse, she was the star.

“Everybody calls me Vicki,” the 61-year-old Hollub said warmly when we met on Zoom in October. She wore a standard-issue CEO flak jacket—knit, in cerise—but despite her uniform and despite her total compensation, which in 2019 was nearly $16 million in total (though valued by the company as $4.4 million in realizable pay), Hollub still came off as one of the least imperial leaders of the corporate class. She lacked the name-brand accessorizing and pointillist grooming favored by her well-heeled contemporaries. She does not live in a corporate mogul-hood like River Oaks, opting instead for Galveston. (She lived for years on Tiki Island, which isn’t even the fanciest part of town.) Although Hollub name-checked the pope and POTUS in conversation, her accent betrays her small-town roots, as does her eager demeanor. There are no stories of Hollub clawing her way to the top. She is often described as “nice,” which is not a term typically applied to CEOs of either gender.

Hollub’s niceness has made friends and associates, however judgmental in private, reluctant to hurt her feelings by speaking on the record. Some went so far as to suggest to me that it was too soon to write critically—or even analytically—about a high-ranking woman in any business, that discussing one woman’s mistake could hurt all women. Hollub is further protected by a vigilant communications department and by the fact that a significant number of departing employees were required to sign stringent nondisclosure or non-disparagement agreements in exchange for severance. (“I cannot answer that question because my answer would not be flattering,” was one former executive’s response to my queries.)

But Hollub’s passionate pursuit of Anadarko is a story worth excavating, one about a woman who has made her way in an exceptionally male-dominated business and one that sheds light on the industry as a whole. Gender aside, its leaders are struggling through not just a cyclical downturn but an existential crisis with respect to the future of energy. (Exxon was booted out of the Dow Jones Industrial Average in August, replaced by a software company, Salesforce.) Hollub, like her CEO peers, has had to figure out how to keep her company alive at a time of declining fortunes, climate stress, and public disdain.

Hollub’s is a classically American, pulling-herself-up-by-her-bootstraps story: she was born in Bessemer, Alabama, a largely segregated, blue-collar suburb of Birmingham. Her mother worked in a diner and then proved herself a super saleswoman at the new Sears store. Her father, a self-taught carpenter, built a successful home-and commercial-remodeling business. She was their second child and only daughter. As with so many Southern families, football was more passion than pastime in Hollub’s home, but she wasn’t a Southern belle aspiring to be a cheerleader. Instead, she idolized the legendary University of Alabama coach Bear Bryant—she read everything she could about him, analyzed his plays, and memorized his leadership tips like a catechism. “My first memory in life, just about, is listening to Alabama football on the radio . . . and then on television,” she told me. When her dad got tickets from his boss, the family went to see games the Crimson Tide played in Birmingham. Hollub loved shopping for a new crimson dress every year. “Back then, as you know, people dressed up to go to the games.”

As a teenager Hollub mastered the French horn, a notoriously difficult instrument, and played in the marching band at UA, which at least got her onto the field. She graduated in 1981 with a mineral engineering degree and was hooked on the oil business after getting her first look at a rig. She started out in Mississippi, working for California-based Cities Service, which Occidental bought a year later.

“I love the company,” Hollub told me, with a bracing sincerity. At the time of the Cities Service purchase, Oxy was still led by the famous and infamous Armand Hammer, who had taken charge of the modest concern in 1957 and, over the next three decades, turned it into one of the first global exploration juggernauts. Hammer also outdid his Texas counterparts in the living-large department: he collected art, befriended everyone from Vladimir Lenin to George H. W. Bush, was targeted as a possible Russian spy by FBI director J. Edgar Hoover, and charmed a succession of wives and lovers.

His handpicked successor, Ray Irani, followed Hammer’s lavish lead. Born in Lebanon and trained as a chemist—a PhD, he liked being called “Dr. Irani”—he worked at Oxy for more than twenty years; he became CEO in 1990, several months before Hammer’s death. Fluent in Arabic and enamored of the Middle East, Irani seemed to adopt Saudi royalty as role models, sending the company plane to pick up board members for meetings in exotic locales, building his own impressive art collection, and installing fourteen bathrooms in his Bel Air mansion.

Despite the excesses, Occidental thrived. Irani “was blessed to have Stephen Chazen as his CFO,” said Edward Djerejian, a former U.S. ambassador to Syria and Israel who served on the Oxy board for nineteen years. “Steve is one of the best financial minds in the energy business.” Wry, slightly awkward, and self-deprecating in the way of people who know just how smart they are, Chazen, who became CEO in 2011, was the anti-Irani. He was unflappable, maybe because during the Vietnam War he’d worked with mine-sniffing dogs to find and disarm booby traps.

Oil companies had spent decades prospecting across the globe, but by the end of the century, the trend was to pull back, shed riskier ventures, and play to Wall Street’s passion for steady returns. Caution—a word not previously associated with the oil business—became the rule, and Chazen modeled this new breed, who had little use for the wildcatter’s high, the volatility that could pay off in spades or land you in Chapter 11. He dumped dicier Hammer and Irani positions in the Middle East, sold off extraneous businesses (horse breeding, meat processing), and turned his back on exploration. It was, he believed, too risky, a sentiment that kept the company robust through oil’s ups and downs. The Oxy dividend was as dependable as the sunrise, making the company a Wall Street darling.

Hollub rose in Chazen’s shadow. For a few decades, she moved around the world, to countries including Russia, Venezuela, and Ecuador, where she managed operations in the Amazonian jungle. As her duties expanded from technical to managerial, she remained the good soldier, packing up and saluting with every new order. Often the only woman on-site, Hollub was a capable, approachable manager—she learned the names of almost everyone who worked for her and gave at least the appearance of being open to input. Much has been made of her ability to talk football with her coworkers.

Unsurprisingly, Hollub’s personal life remained secondary. An early marriage was followed by an early divorce. She never had children, and she didn’t remarry until 2001, to an independent oilman, Glenn Vige. The two topics that seem to animate her most are football and the nuts and bolts of her profession. Seeming relieved to finally go off script during our Zoom interview, Hollub lit up as she gave me a mini course on fracking, in which “you’ve been able to create artificial fractures that connect with a natural frack system, and so you’ve created a really highly conductive route from the reservoir rock to the wellbore through the natural fractures into the induced fractures. Now, so you drain all of that. And then, when all of that’s drained, what you’re doing is you’re pulling from the reservoir. . . .”

Listening to her, it was tempting to ignore the events of the past year and succumb to the idea that technology can tame oil’s volatility, that Steady Eddies like herself have replaced the much beloved larger-than-life characters of yore. That the oilman’s legendary optimism can still prevail in a far more complex world.

No one had a deeper faith in those assumptions than Vicki Hollub.

The 75,000-square-mile swath of West Texas and New Mexico known as the Permian Basin ranks as the United States’ largest oil-producing region, its output supercharged by the fracking boom of the 2010s. In April 2019, it generated 4.1 million barrels a day, which made it the largest producing area in the world at the time, surpassing Saudi Arabia’s vast Ghawar field. If you are in the oil business, this arid, sparsely populated swath of Texas is the place to be. The future may lie in greener sources of energy—including the wind and solar farms that are slowly rising in and around the Permian—but leaders of the biggest oil companies maintain that the world will depend on fossil fuels for at least three more decades. So the calculus is pretty simple: get into the most productive spot as fast as you can.

It was Chazen who as CFO in 2000 presciently steered Oxy in that direction: he spent $3.6 billion to buy what was then the largest oil producer in Texas, Altura. The move did not inspire confidence. Analysts claimed that Altura’s wells in the Permian were played out, that Oxy had taken on too much debt in order to invest in a region that was finished.

A decade later, fracking took off in the Permian, and Occidental was suddenly the holder of the most leases in the most productive area of the country. U.S. crude prices surged to “We’re all going to Disneyland!” prices of $147 a barrel in 2008 and, with the exception of one dip later that year, continued to rise. It was assumed that fracking, which could get more oil out of the ground at a lower cost, meant bigger profits. Suddenly, everyone wanted in. Wall Street investors lined up with fistfuls of cash to back new independents, while the majors, late to the game, rushed to buy up whatever small companies they could.

At the time, Hollub, like Oxy’s leases, was perfectly positioned. She was one of the few female executives in the company and, for that matter, in the business. Under Chazen’s direction, she worked on the company’s Permian expansion starting in 2007, and from 2009 until 2011, while based in Bakersfield, California, she was manager of operations for the region. No one at Oxy knew the place better.

Hollub also benefited from a well-publicized power struggle between Ray Irani and his board. Occidental’s market capitalization rose from $5.5 billion to $80 billion during his tenure, and Irani believed that his compensation should rise accordingly. He made $76 million in fiscal year 2010 alone, more than Rex Tillerson, the CEO of much-larger Exxon. Outraged, two major pension fund stockholders pushed for his ouster, and in 2011 the Oxy board finally had to urge Irani to resign. His severance was $38 million. He remains a poster child for excessive CEO pay.

Enter Chazen, who doubled the company’s profits in his first year as CEO and in 2014 moved Oxy’s headquarters from Los Angeles to Houston, the capital of the U.S. energy business. By then oil prices were tanking. Demand had fallen globally, and Saudi Arabia was flooding the market, trying to drive prices so far down that it would be unprofitable to produce in the United States. But Oxy remained stable under Chazen’s cautious leadership, to the delight of Wall Street and shareholders. CEOs, Chazen liked to say, should be prepared for the volatility that was inherent in the oil business. “There’s a whole bunch of risks you can take in the oil business, . . . but you can’t take every risk,” he told an audience at Rice University during that very bad year.

He had transformed a loopy independent into a modern corporation of near-mythic stability. In two decades the value of the Oxy dividend had increased more than 2,000 percent, and it went up every year. Equally important, the company was positioned for the next era, not just technologically but culturally. In an unusual move for an oil exec, Chazen had opened Oxy to more people of color and more women. The head-down, hardworking Hollub rose higher than any of them: in 2012 she became executive vice president of operations, overseeing projects across the globe, and in December of 2015 she won the COO job.

Chazen’s days as CEO were numbered: after the battle royale with Irani, the board imposed a mandatory retirement age of 68. As Chazen, then 67, neared the end of his tenure, he and Djerejian, who’d replaced Irani as board chairman, decided it was time for a woman to run the show. Hollub’s moment had arrived. She was, after all, a forty-year company . . . woman. “Vicki was not only a rising star but a star with a very modest lifestyle,” Djerejian said. “She was humble.”

No one seemed bothered that unlike most modern-day CEOs, Hollub was largely unfamiliar with the financial world. Chazen would stay on for a year as her guide. Anyway, Hollub was smart. She would rely on experts. She would never do anything crazy.

There wasn’t a lot of fanfare accompanying Hollub’s appointment to the CEO job in 2016. Arabian Business Magazine called her “the most influential woman in the oil and gas industry,” but the energy sector loves “colorful” characters, and Hollub was not that. An editor at the Wall Street Journal told me that the paper had almost canceled an in-depth profile of Hollub after she became CEO “because she was so boring.” There was also a question of whether she was really in charge, given Chazen’s continued presence.

Yet once Hollub stepped into the C-suite, the company seemed to awaken from a slumber. There was talk of big plans, transformative plans—a breath of fresh air, after Chazen’s restraint. Hollub gave the company a greener gloss by expanding work on carbon capture, a new process that takes CO₂ out of the air so that it can be used for fracking—and can be purchased by airlines and other companies to offset their carbon emissions. Meetings were purposeful and tight; Hollub was not going to be anyone’s warm and fuzzy mentor, male or female. As CEO, Hollub seemed different from her predecessor—and her previous self. She was more certain, more direct. More like a guy. Said one executive of the hearty confidence Hollub displayed on the listening tour she took when she became CEO: “I thought, ‘Damn, she knows what she wants. She’s got the biggest set of balls in the company.’ ”

Hollub would need them. She took charge during a new period of volatility: Wall Street investors—many of whom wouldn’t know a drill pipe from a pipe organ—had finally figured out that fracking math didn’t compute. It was expensive and therefore dependent on high oil prices—the threshold was different for different companies, but most needed the price to stay above $50 or so a barrel, ideally above $60. Although fracking could revitalize old wells and elicit astounding results from new ones, a swift drop-off in production was often seen after just a few months. Then, the hapless owner had to borrow more to drill new wells to pay back debt still owed on the initial investment. Meanwhile, the laws of supply and demand kicked in: at any given level of oil consumption, more production meant lower prices and, in turn, lower profits. Investors pulled back; smaller companies washed out, while bigger companies, better equipped to weather inevitable downturns, moved to solidify their positions, often by gobbling up smaller businesses. No one wanted to give up on the Permian—the oil there could be produced more cheaply than in most other fracking locations because of the composition of the rocks, the virtual absence of exploration costs, and technological advances that fall under the rubric of EOR, enhanced oil recovery. But now the risks were higher and the outcome less assured.

Amid the chaos, Hollub held steady. Unlike other oil companies, Oxy endured the 2016 slump without the typical layoffs—she told Fortune they were “damaging” and “demotivating”—and without breaking with oil company dogma: renewables were coming on, but fossil fuels would continue to power the world and be spun into roofing shingles and workout tights. For Hollub, the Permian was a long-term insurance policy.

There is disagreement both inside and outside the company as to whether Occidental was a serious takeover target at that time. Among its attractions were low debt, good management, and those positions in the Permian, where the majors were still prospecting like ravenous locusts. Arguably, Occidental found itself in an eat-or-be-eaten situation, and Hollub’s decision was to brandish her knife and fork.

Buying another company could make Occidental so big that it would be invulnerable to outside attack, while also making it a stronger player in the energy world. And so Hollub set her sights on the Woodlands-based Anadarko. On paper, merging with Anadarko made sense: with the addition of its assets in Colorado, New Mexico, and Texas, Occidental could become the largest operator in the Permian and the third-largest U.S. oil company.

By the early 2000s Anadarko had become one of the world’s biggest independent oil and gas exploration and production companies, active not just in the U.S. but in Algeria, Canada, Qatar, and Venezuela. Its swashbuckling executives saw themselves as carriers of the wildcatter torch. You might say that some of them were pre–#MeToo white guy world-beaters who loved their gold Rolexes and could be a whole lot of fun if you weren’t too fussy about gender issues. (In 2017 sexual harassment problems surfaced in the company’s Denver office, where, according to complaints from former employees, a supervisor “joked” to women that the best way to get promoted was to provide oral sex. Subsequently, the obligatory sexual harassment classes were instituted, and nondisclosure agreements were signed.) The looming, mirrored-glass corporate headquarters in the Woodlands was a two-towered Shangri-la, with two sprawling gyms, one reserved just for Crossfit and another containing an indoor basketball court. There was a massive sculpture of majestic stags out front.

A potential buyer might have sensed a lot of fat on the bone and some sleepiness around operations. Anadarko “had tremendous properties but did not maximize value for shareholders,” said Ed Hirs, an energy fellow at the University of Houston. Hollub was certain that combining Anadarko’s positions with Oxy’s operating expertise was the road to glory.

She first contacted Anadarko CEO R. A. “Al” Walker informally about a potential merger in July 2017. By then she had studied the synergies that would make Oxy and Anadarko a good pair; she’d also been inducted into the invitation-only All-American Wildcatters Association, an exclusive club that counted among its members T. Boone Pickens, Bunker and Herbert Hunt, fracking pioneer George Mitchell, and former Anadarko CEO James Hackett, who had personally backed her nomination.

None of this impressed Walker, who had not started out as an oilman. He was a banker—a former energy investment banker for the Swiss multinational UBS—which, in the get-your-hands-dirty world of oil and gas operators, was not necessarily a winning credential. The handsome, wavy-haired, golf-tanned North Carolinian struck some as the consummate Southern gentleman, reserved and a stickler for propriety. Others saw him as a cold fish, interested only in money. That he never made Houston home, flying back and forth to his family in San Diego on weekends, suggested he wasn’t in it for the long haul.

Walker had previously served as CFO and COO of the company, then took charge in 2012, when Hackett stepped down as CEO to attend Harvard Divinity School. Like Hollub, Walker understood the narrowing choices for oil and gas companies that were not named BP, Chevron, Exxon, or Shell. He tried the expansion route with a 2015 attempted takeover of Apache Oil, but when that effort failed, he became more interested in finding a buyer for his company.

Still, Walker didn’t want to sell to just anyone. Up in the thin-aired stratosphere of top-tier CEOs, the corporate head who sold to a larger company was a hero, while the one who sold to a smaller firm was a jackass. Also, certain observers believed, Walker didn’t want to sell his company to a woman. And as time went on, he really didn’t want to sell it to Vicki Hollub.

It’s hard to determine just how much of a role gender dynamics would play in the ensuing drama. Hollub is the wrong person to ask: she insists that in her career at Occidental, she never felt discriminated against. “Oxy, in my view, gave people the opportunity to do whatever they wanted to do. . . . If you were up to the challenge and you wanted a challenge, it was there,” she told me. “And there were, to me, no biases about who got what. If you were willing to do it, you could go do it.” Still, I wondered to what extent her industrious, sports-stat-quoting, “boring” personality had served as a kind of camouflage in the testosterone-heavy world of oil and gas. When she joined the company, there was one other female engineer along with a handful of female geologists, Hollub told me. Currently, one of every five employees in the oil and gas industry is female, and only 2 percent of its executives are women, versus 25 percent at other Fortune 500 companies. Anadarko had six female executives, while Occidental did not provide the requested numbers.

More important, Hollub didn’t appear to have the background or the disposition for a searing corporate battle. For a woman who had spent her life climbing the corporate ladder, she could be strikingly naive; she seemed to take people at face value instead of questioning their motives. She was also an engineer by training and attitude: once she made a decision, it was hard to change her mind. And she was hobbled by her limited financial knowledge. After Chazen left Occidental, Hollub relied on an in-house financial team that many saw as second-rate, entrusting the Anadarko acquisition bid to them rather than using experienced dealmakers from outside investment firms. This, one person told me, “is like having your mother as your wedding planner.”

Walker, in contrast, was a deal guy, far more attuned to the vicissitudes and subtleties of finance than, say, a new fracking method. Because takeover battles occur in the boardroom and not the oil field, he held a substantial advantage.

In August 2017, a few weeks after her initial approach, Hollub met with Walker to press her case. According to one source close to the negotiations, Walker didn’t take her seriously. He did not see the “synergies” that she saw. He all but begged Hollub not to make a formal offer that he would have to present to his board. But in the weeks that followed the August meeting, she did just that, assembling a formal offer to buy Anadarko in an all-stock transaction for $61 a share, a generous 23 percent premium over Anadarko’s then share price of $49.88.

A reluctant Walker had just one concern before taking the offer to the board: the proposed deal would dilute the value of Oxy stock and would require approval from Hollub’s board and shareholders. He was skeptical. (Or, as one person involved in the transaction said, “Your shareholders are gonna throw up all over this.”)

Walker sensed amateurism and responded accordingly. He told Hollub that he just didn’t believe that the companies’ “asset profiles and strategies” were compatible, according to filings from the Securities and Exchange Commission. Hollub, after receiving her board’s support, sweetened the pot, offering an unspecified proportion of the purchase price in cash. Maybe, she suggested, it was time to sign some nondisclosure agreements and get to know each other better.

With little enthusiasm, Walker took the proposal to his board and to a flotilla of expensive, paid-by-the-hour advisers, and the unanimous answer, promptly delivered to Hollub, was thanks, but no thanks. Anadarko was not convinced that she had the cash on hand or that she could deliver on her promised near-term business plan. What if oil prices dropped below $40 a barrel? Could Oxy afford to keep drilling? And wouldn’t the Oxy stock that Hollub was offering drop in value? So no.

The world of oil company executives is small and gossipy, and it wasn’t long before Walker heard that Hollub was claiming she could operate Anadarko’s wells more efficiently than he had. True or not, this was not the kind of criticism a proud CEO wants to hear. When Hollub asked for another get-together, Walker declined. Undeterred, Hollub raised her offer in January to $76 a share. She also asked to meet with Anadarko’s executive team and its board, which trudged into another session to consider Hollub’s latest proposal—and turned Oxy down again.

A year went by, and here one might picture Walker hiding behind potted plants whenever he attended the same industry functions as Hollub. A lot of CEOs would have given up at this point. But Hollub had a Zen master’s ability to brush off insults, at least when she was pursuing a goal. She pressed on.

Then, in February 2019, someone new arrived on the scene: the board chairman and CEO of Chevron, Michael K. Wirth. Anadarko had caught his eye too. Chevron was five times larger than Oxy, on track to overtake Exxon as the biggest U.S. producer in 2020. Wirth was a tall, thin, preternaturally copacetic leader with steel-blue eyes and an excellent reputation. He was also a man.

Walker, who had been so diffident toward Hollub, was suddenly electrified. A sale to Chevron would be a huge win. Everyone from a janitor to the largest stockholder would profit from its might. And Walker wouldn’t look too bad either. Almost immediately, there was talk of signing nondisclosure agreements and sharing each other’s books. On Valentine’s Day, the two captains of industry met to discuss their mutual affection. Chevron’s offer was lower than Oxy’s—$64 a share, 25 percent in cash, the rest in stock—but this was Chevron.

In late March, Hollub, who had gone on believing, according to one source, that Walker was still pondering her overtures, cornered him at an American Petroleum Institute conference in Austin. Once again, she started talking marriage, presumably unaware that Walker had become deeply involved with Chevron. He did not feel obliged to tell her that he was, well, dating someone else. The talks between Anadarko and Chevron continued quietly; one negotiating point concerned a termination fee—what Anadarko would have to pay Chevron if another suitor showed up with a better deal after preliminary papers had been signed. The amount? A piddling $1 billion.

Around that very time, Hollub presented yet another offer for Anadarko, one that was not significantly different from the $76 a share she had offered fourteen months earlier, with the majority payment still essentially in stock. One can only imagine Walker letting out a sigh that echoed across the Permian. At an event, an eavesdropper heard Walker and Wirth sniggering about Hollub like middle schoolers.

Nonetheless, with Oxy’s return as a serious bidder, Walker was obligated to alert Chevron to the existence of competition. The Chevron team was not happy—Oxy? You’ve got to be kidding!—and threatened to withdraw its proposal.

From Anadarko’s perspective, Hollub was gumming up the works. She ran further afoul of Walker when she came back with a deal that proposed reducing the purchase price to $72 a share, in exchange for other concessions. Walker was miffed, according to a source close to the negotiations. Hollub eventually went back to $76 and bumped up the percentage of cash.

Walker was on a tightrope, caught between one company that he and his board did not want to merge with offering more money to their shareholders, and one that everyone was hot to trot with offering less. For the next few weeks, the Oxy and Anadarko teams met to hash out their differences. Hollub didn’t know she was competing with Wirth; what she did know was that in the end she was unable to reach Walker by phone. The Oxy team assumed he was holding out for more money.

Finally, in April, the Anadarko board unanimously decided in favor of Chevron because, in the minds of its members, Chevron’s was a safer deal than Oxy’s. Wirth agreed to shell out $33 billion, his offer still firm at $65 a share. Just before the deal was signed, the Anadarko executives boosted their own compensation; Walker’s golden parachute was estimated to be at least $43 million. The two companies executed the merger agreement on the night following the board meeting, and the press release went out the next morning. At one point in our interview, I asked Hollub whether she believed Walker had treated her with respect. She thought it over. “I think Al Walker and I had a good relationship and had had a lot of communication leading up to the week before they had a deal with Chevron,” she said. Then she thought some more and added, “I would say that they were respectful up to the time when I sort of lost communication with them, about a week before the deal was announced.”

Hollub was on Interstate 45, driving into work in her Jeep, when she found out. “It was shocking to hear on the radio,” she told me. She almost drove off the road.

Every deal has its point of no return. Many bidders would have folded their tents with the announcement of the Chevron/Anadarko merger, consoling themselves with the idea that there would be other prospects. But for Hollub, who believed with a near-religious fervor in the opportunities that a combined Oxy and Anadarko might exploit in the Permian, surrender was not an option.

There are those who claim, sympathetically, that she was in over her head. Others assert that she got talked into a bad decision by her deal guys and her enablers, the outside bankers and lawyers brought in as the negotiations progressed, who would profit regardless of the outcome. There is also the theory that Hollub became infatuated with the deal, a fever responsible for myriad corporate disasters. (Jerry Levin’s 2000 sale of Time-Warner to AOL is probably the most famous in modern times.) Deal fever tends to come on when the pressures and pleasures of pulling off something big—the exhausting but passionate negotiations! A history-making win!—overwhelm common sense. As T. Boone Pickens once put it, “When you want to make a deal real bad, you will make a really bad deal.”

It’s also possible that Hollub was royally pissed off.

She fired her first salvo on April 24, when her team finally went public with her tortured, two-year courtship, beginning what Forbes called “the bidding war of the summer.” Hollub hit the business cable shows to talk up the benefits of the merger and, in a rather aggrieved press release, announced a new offer for Anadarko: a 50–50 cash/stock transaction, up from the previous offer of 40–60, at $76 a share. The Anadarko board did not believe she could win shareholder approval for the deal fast enough. They could lose Chevron, which was growing impatient, while Oxy dithered. They sent Hollub packing again, as Oxy’s stock, which had been slipping from the eighties since October 2018, teetered into the sixties, a sign of market displeasure.

Hollub and her team concluded that Walker’s demurrals were all about cash—if she had enough of it, she could close the deal fast, without a shareholder vote to release any stock. Maybe not the best way to run a company, but the clock was ticking. Thus began a fevered search for coin.

By then Bank of America was advising Occidental, and the bank’s CEO, Brian Moynihan, suggested connecting Hollub with a major bank shareholder: the Oracle of Omaha, Warren Buffett, chairman and CEO of the holding company Berkshire Hathaway. He always needed places to invest his mountains of cash, and he was one of the country’s biggest investors in energy. Plus, Buffett’s endorsement would burnish the deal to a high gloss.

Although Buffett usually avoided hostile takeovers, when Hollub called, he seemed far more enthused to hear from her than Al Walker had ever been, a reaction that might have unnerved someone better schooled in mergers and acquisitions (or more familiar with Buffett’s shrewdness). “Sure—when can you be here?” he asked her on a Friday. Her reply: Sunday morning at ten.

What happened next was initially portrayed in the business media as a feat of corporate derring-do. That same Friday, Hollub and senior VP Oscar Brown jetted to Paris for a dinner meeting with Patrick Pouyanne, CEO of the French oil giant Total. The idea was to presell Anadarko’s African assets to Pouyanne for $8.8 billion—another unconventional way of raising cash. With little risk to Total, Pouyanne gave them a tentative yes—contingent on the Oxy/Anadarko deal going through, of course. Hollub and Brown flew back to Houston that same night.

Then it was on to Omaha the next day, April 28. According to Hollub, the white-haired, wizened Buffett greeted them at the door to his headquarters, a nondescript office building. He was casually dressed in a sweater. Brown and Hollub wore business suits. The meeting also included Buffett’s CFO, and the whole thing lasted about an hour, an amount of time that perhaps should’ve set off alarm bells but that Hollub took as proof of Buffett’s genius. “I doubt there’s any topic that anybody could go in and talk to him about that he doesn’t already know just about everything,” she told me. Hollub and Brown got back on the plane with a commitment of $10 billion in cash; in exchange, Oxy would grant Berkshire preferred stock that would pay an 8 percent dividend—common shareholders received at most 5.3 percent. Hollub had made Buffett a 10 percent owner of Occidental overnight. Soon enough, the media caught on. Forbes would label Buffett’s rate “near-usurious.”

Rounding out the offer with a $21.8 billion bridge loan from Bank of America and Citigroup, Hollub was ready to bid $38 billion (effectively $58 billion, since Oxy would be taking on Anadarko’s existing debts) to Chevron’s $33 billion. Hollub, according to one person close to Occidental’s final push, forced Walker’s hand: “It became an offer they couldn’t refuse because it was mostly cash.”

Having publicly announced the presale to Total and declared that Oxy was ready to close the deal, Hollub now held a very big, very public gun to Walker’s head: he would have to explain to his shareholders why Chevron’s offer of $65 a share was better than Oxy’s cash-heavy offer of $76.

After an unsuccessful last-ditch effort to get Wirth to raise his price, Walker had no choice but to take the money and run. On May 9, 2019, Anadarko agreed to become a part of Occidental Petroleum. After two years of passionate pursuit, Hollub had won. But so had Walker and his team, since more than a hundred million dollars would be walking out the door with Anadarko senior management. Nor could Wirth be considered the loser: his consolation prize was the $1 billion termination fee—and Oxy was now on the hook for it.

If Hollub expected widespread kudos for pulling off the largest U.S. oil and gas merger since Exxon acquired XTO for $41 billion in 2009, she would soon be disappointed. Wirth declared in his walkaway statement that “winning in any environment doesn’t mean winning at any cost.” Team Oxy read his words as sour grapes, but the market agreed with him. At the company’s annual meeting in May, major mutual fund adviser T. Rowe Price labeled the deal “extraordinarily expensive” and threatened to vote against the board slate. David Katz, the president of Matrix Asset Advisors, who was not among the largest Oxy investors but was one of the frankest, feared a loss to his institutional clients, which he had invested in Oxy (but no longer does). “When Chevron walked away, that should have been a real clear sign that you are paying too much,” he said, echoing a near-universal sentiment. In several letters to the Oxy board, Matrix implored them to stop the deal: oil prices could fall, and the losses to investors could be devastating; even if prices remained stable, the company that had historically been so fiscally sound would be hobbled with debt for years to come. Hollub would not be moved. Even a threat by Moody’s to downgrade Oxy’s credit rating had no effect. Added Katz, “[Hollub’s] attitude was ‘[Anadarko] was my company, Chevron had no right to buy it, and I’m going to do everything to get this done.’ ”

At the Oxy shareholder meeting in May, Hollub declared that her critics had confused Occidental’s determination with desperation. “We approached this deal from a position of strength,” she said. Oxy would cover Buffett’s premium by becoming the largest producer in the Permian. She had tons of Anadarko’s foreign assets to sell. No worries!

The market was not impressed. Occidental stock slid that May to a nearly ten-year low of about $50 a share. Back in September of 2018 it had been worth around $82. Now that seemed like a long time ago.

Hollub’s problems were just beginning. As early as May 2, Carl Icahn had begun buying up Oxy stock, amassing shares worth around $1.6 billion. The grizzled businessman, then 83, who usually had “corporate raider” affixed to his name, had caused his share of eye rolling over the years. Even so, his purchases were a sign that all was not well at Occidental. The buzzard was circling.

Whether he really thought the Anadarko deal was catastrophic, or just sensed weakness and therefore an opportunity to disrupt and profit, Icahn sliced and diced Hollub, publicly expressing what others were saying privately. “She just rushed out in a panic,” he told CNBC of Hollub’s eleventh-hour pilgrimage to Omaha. He was furious about the deal and the lack of a shareholder vote and began lobbying for changes in Occidental’s governance. He filed a lawsuit in late May. By overpaying for Anadarko, he alleged, Hollub and her board had put the company at risk. It was as though she believed that oil prices would never fall. He noted that Oxy’s stock price had declined 33 percent since Hollub took over, while she received $40 million in compensation. The company’s entire management team, in Icahn’s view, was nothing but a $100 million band of parasites. He demanded that board chairman Eugene Batchelder and several other board members be replaced with people of his choosing.

Hollub fired back, maligning Icahn’s board choices and Icahn himself. And so it went, throughout the summer and fall. Instead of enjoying victory, she was still at war. Oil prices hit a high of $61 in December 2019 but then started slipping. To begin servicing the company’s debt, she called for voluntary resignations; in January 2020 the layoffs she had avoided in the past became mandatory. At the same time, Hollub was jetting across the world, trying to unload Anadarko’s non-Permian assets in order to begin paying down Oxy’s debts. (The Algerian government refused to approve the sale of Anadarko’s wells to the French at Total, which came as no surprise to those familiar with the history of bitter conflict between the two countries.)

In March 2020, the stream of bad news became a tsunami; as countries all over the world sent their citizens into lockdown and demand for gasoline plummeted, the price of West Texas Intermediate crude sank to $20 a barrel. Permian operators who couldn’t cover their costs started shutting in wells.

Oxy stock tumbled further, bad news for everybody except Icahn, who proceeded to scoop up more shares at fire-sale prices. Within a matter of days he owned 9.9 percent of the company. Around the same time, Hollub was obliged to slash the beloved Oxy dividend from 79 cents a share to 11. The board, which until then had remained loyal, began to waffle. Icahn dispatched vitriolic letters to shareholders, while oil prices kept plunging, briefly hitting that horror-movie number of −$37.63 in April.

Hollub maintained her game face: less than five months after acquiring Anadarko, Oxy had already repaid $7 billion in debt, she announced. But by then the business press had already started reporting her demise (“Vicki Hollub’s Occidental Tenure Is Nearing Its End,” predicted Forbes), while the influential Twitter group of energy short-sellers, #EFT, gloated. (“Turns out your blue-collar employees don’t like it when you fund your future cash severance payment by cutting their salaries,” noted #EFT’s de facto leader, who goes by the tongue-in-cheek handle “Mr. Skilling.”) Hollub had made a few earnest but poorly considered public pronouncements—that her “experience with M&A was very limited,” that she coped with stress by kayaking on Galveston Bay—and now those were being used against her in the court of public opinion.

Then came the final humiliation. If Chazen were brought back as board chairman, according to sources close to the deal, Icahn would be satisfied, and he claimed that he would not force Hollub’s resignation in that case. (As Icahn told others, she was as good at operations as she was horrible at M&A.) In one version of the story, Hollub resisted, then capitulated. In another, she welcomed him with open arms: “Vicki wanted him to come back,” claimed a Hollub loyalist. Housecleaning began apace, as most of the executives associated with the deal were either fired or assigned to new positions. Board chairman Batchelder was gone in a flash, along with three other board members who were replaced to appease Icahn. In a video speech to employees announcing more job cuts, Hollub looked haggard, barely glancing up from her script.

Amid the wreckage, one question was unavoidable: Was it worth it? Al Walker and other Anadarko executives got out while the getting was good; Walker left with a hundred million dollars, while his executive team walked off with two hundred million more. Bankers and lawyers on both sides also took home a hefty payday for bringing the Oxy/Anadarko shotgun marriage to the altar. (Estimates ranged from $100 million to $170 million in financing fees for the banks alone.) Even Chevron’s jilted Michael Wirth walked away with his $1 billion breakup fee, then turned around and bought Noble Energy, a far smaller and cheaper company with Permian assets as well as leases in a massive gas field in the eastern Mediterranean. And while Occidental has calculated that Hollub’s realizable compensation fell to $4.4 million in 2019, primarily because of the company’s lower stock price, it reported her total compensation as $15.9 million, a figure that independent compensation experts said more accurately represented her pay.

Employees and shareholders of Oxy did not fare as well, as retirement nest eggs and college savings evaporated. “She destroyed tens of billions of dollars of shareholder value,” Matrix’s David Katz said, his disgust still evident almost a year later. “She destroyed more value in oil and gas than any CEO out there.”

Last November, Hollub had to face her shareholders again. Her third-quarter report could qualify as good news only if you considered it good news that Occidental still existed. It had lost $3.8 billion in the third quarter alone, but, as Hollub pointed out, that was smaller than the $8.4 billion loss in the second quarter. She was characteristically sunny, despite the skepticism of analysts on the call: she had paid down $8 billion in debt and hoped to sell $10 billion to $15 billion more in assets over the next year, despite, she said, “2020 possibly being the worst market for asset divestitures in the history of our industry.” Occidental could break even with oil prices as low as in the thirties, she claimed.

Will Vicki Hollub be forgiven her sins? Like all leaders of the fossil-fuel industry, Hollub knows her business faces a slow but certain decline. Speaking at the Energy Intelligence Forum last October, she made headlines by declaring that the planet would reach peak supply before peak demand and that production would never grow as it had in the past. And, she announced, she intended to shift more of Oxy’s emphasis to carbon capture—storing CO2 and selling carbon offsets to other companies. She was already forming partnerships and setting up shop. Plans were underway to build a storage facility on a hundred-acre site in the Permian, with groundbreaking scheduled for 2022. But carbon capture, like drilling for fossil fuels, is very expensive, and we don’t yet know whether it will prove effective. “That’s going to require capital too,” noted UH’s Ed Hirs. “It really depends on what Uncle Warren’s going to let her do.” By going this route, Hollub, like many of her fellow CEOs, is buying time rather than making the difficult, transformative shift to producing more energy from renewable sources. In the meantime, oil prices at this writing are hovering in the fifties, and if they hold, Hollub could land on her feet. “In spite of vastly overpaying, it could still work out for her. I’ve seen it happen before and I certainly hope it happens again,” Icahn told me.

Forgiveness has long been the wildcatter’s elixir. As one retired oilman dryly noted of Hollub’s on-the-job training, “It’s tough to do big deals when your first big deal is as CEO.” Despite Oxy’s execrable stock price and Moody’s downgrade of Oxy’s debt rating to near-junk status, Hollub was a keynote speaker at a prestigious international oil conference last November, and in the same month she aced a fluffy interview with energy guru Daniel Yergin. In 2020 she was in position number 50 on Forbes’s list of the World’s Most Powerful Women, just slightly behind her 2019 ranking of 47—maybe because she’s proved that a woman can fail as spectacularly as a man, then move on.

And, going forward, she can still lean on the advice of her childhood spirit guide. “If you never lose, you won’t know how to act,” Bear Bryant once said. “If you lose with humility, you can come back.”

Clarification: This story has been updated to reflect that Occidental valued Vicki Hollub’s realizable compensation for 2019 at $4.4 million.