Occidental Petroleum (OXY 0.19%) has become a popular oil stock in recent years. Warren Buffett has a lot to do with it. His company, Berkshire Hathaway, has been buying the oil stock hand over fist. It currently owns 28% of Occidental's outstanding shares.

Many investors will likely buy Occidental to follow Buffett, especially since he considers it a potential "forever" holding. Here are three other reasons to buy the oil stock that are even more important than the fact Buffett owns shares.

1. Close to closing a needle-moving acquisition

Last December, Occidental Petroleum agreed to buy CrownRock for $12 billion in cash and stock. The acquisition will enhance its already strong position in the Permian Basin. The company had hoped to close that deal in the first quarter. However, regulatory delays will likely push the closing into the second half of the year.

The acquisition should really move the needle for Occidental. The company anticipates that it will add $1 billion to its annual free cash flow within the first year. That assumes oil averages $70 per barrel (its price point around the time of the deal). Crude oil prices have since risen to above $80 a barrel, so the acquisition would supply it with even more free cash flow.

The increased cash flow would have two notable benefits for shareholders. It would enable Occidental to more quickly repay the additional debt it will incur to buy CrownRock (it's issuing $9.1 billion in new debt and assuming $1.2 billion of existing debt). The company aims to pay off at least $4.5 billion of debt within the next year through free cash flow and asset sales. It could hit that target sooner if oil remains elevated.

In addition, higher free cash flow would enable Occidental to repurchase more shares in the future (including the high-yielding preferred stock owned by Berkshire).

2. The chemical equation

Occidental Petroleum is a rather unique oil company. While it's not a fully integrated energy company like Exxon and Chevron (it doesn't operate oil refineries), it does have a sizable chemicals business (OxyChem). That business generates resilient cash flows for the company, helping mute some of the volatility of oil and gas prices.

The company is investing heavily in expanding OxyChem's capacity. It's modernizing and expanding its Battleground facility and enhancing several Gulf Coast plants. Occidental started spending on its plant enhancement projects last year, which should be complete in 2025.

It's already starting to see an uplift from those projects, with the full benefit expected in 2025. Meanwhile, it anticipates finishing Battleground in mid-2026. The company expects these investments will yield $300 million to $400 million of incremental earnings in 2026 and beyond.

3. Capturing a potential massive opportunity

Occidental Petroleum is also investing heavily in building a lower-carbon energy solutions platform (Oxy Low Carbon Ventures). It's investing $600 million this year, including building its STRATOS direct air capture (DAC) plant in Texas. That facility should be operational by the middle of next year. It will have the capacity to capture 500,000 tonnes of carbon dioxide per year. It's one of several DAC sites the company hopes to build in the future.

The company is in the early stages of commercializing DAC technology. It has sold carbon removal credits to several companies to help them reach their decarbonization goals. Occidental has also formed a joint venture with BlackRock, which will fund $550 million (50%) of STRATOS' development costs.

Occidental bought the company behind its DAC technology (Carbon Engineering) for $1.1 billion last year. That will help support the growth of its DAC business. In addition, the company believes it could eventually license the technology, potentially supporting over 1,000 projects in the future.

Occidental Petroleum believes carbon capture and sequestration (CCS) will become a $3 trillion-$5 trillion global industry in the coming decades. The company thinks it could eventually generate as much earnings and cash flow from CCS as it currently produces from oil and gas.

Multiple ways to grow shareholder value

Occidental has a lot going for it. Its CrownRock deal is a potentially meaningful near-term catalyst. Meanwhile, OxyChem and Oxy Low Carbon Ventures are longer-term growth drivers. They position the energy company to create a lot of value for shareholders over the long term, especially as the global economy continues its slow pivot toward lower carbon energy. They make Occidental look like a potentially appealing oil stock to buy and hold for the long haul.