The Los Angeles-based company has won Libyan permission, effective 1 July, to take over operations from wells that have been producing 12,000 to 15,000 barrels of oil a day, the company said on Friday.
Occidental was forced to leave Libya in 1986 when US sanctions were imposed, and management of the wells was turned over to a subsidiary of Libya's National Oil Corp. Occidental received no profits from the crude oil production.
US sanctions were lifted last year amid a dramatic improvement in Tripoli's relations with Washington. Libyan leader Moammar Gadhafi renounced development of weapons of mass destruction and allowed weapons inspectors to verify that his country was abandoning nuclear, chemical and biological programs.
"Now we're going to go back there, and we're going to take over production again," Occidental spokesman Lawrence P. Meriage said.
"We operated there for 20 years by the time sanctions were imposed in '86 and so we have a good technical base," Meriage said. "I think Oxy left Libya with a very solid reputation ... there's some residual goodwill. I think we're going back on a very strong foundation."
The company received Libyan permission this year to drill in additional sites under a five-year deal, and exploratory drilling could begin early next year, Meriage said.
Together, the areas under Occidental licence make it "the largest networking interest holder of oil and gas acreage in the country," Occidental Chairman and Chief Executive Officer Ray R. Irani said in a statement.
"Occidental has a long and successful history in Libya, and we believe our return will produce significant benefits for the people of Libya and for our stockholders," he said.
The news apparently had little impact on Occidental's stock price. Trading closed at $82.28 per share on the New York Stock Exchange, down 75 cents.