Occidental Petroleum Corporation (NYSE:OXY) announced on Friday that it will separate its California operations into an independent, separately traded company. The new California company, whose name was not announced, will have 8,000 employees and contractors and will establish its headquarters in the state.

Occidental said the new company will be California’s largest natural gas producer and the state’s largest oil and gas producer on a gross-operated barrels of oil equivalent basis. It will be the largest holder of oil and gas mineral acreage in the state, with approximately 2.3 million acres and major operations in Los Angeles, San Joaquin, Ventura and Sacramento.

Last year Occidental’s California business earned approximately $1.5 billion on a pre-tax basis. Earnings before income, taxes, depreciation and amortization were around $2.6 billion, with capital expenditures of approximately $1.7 billion.

Occidental Petroleum Corporation will be headquartered in Houston, Texas. It will have exploration and production operations in the Permian Basin and other parts of Texas, the Middle East region and Colombia.

It will also have a midstream and marketing segment and a chemical subsidiary, OxyChem. It also plans to reduce its exposure to proprietary trading activities related to crude oil and other commodities.

“Creating two separate energy companies will result in more focused businesses that will be competitive industry leaders,” said Stephen I. Chazen, who will remain as President and Chief Executive Officer.

Occidental will continue planning for the separation of the businesses, including determining management and governance of the California business. The Company expects to announce the California management team in the third quarter of this year and complete the separation by the end of 2014 or the early part of 2015.