* 2nd-quarter adj profit $1.58/share vs Street view $1.60
* Higher U.S. output offset by lower production in Colombia
* Shares drop nearly 3 pct, giving up past month's gain
July 30 Occidental Petroleum Corp posted a smaller-than-expected quarterly profit on Tuesday, hurt by lower oil prices in the Middle East and North Africa, where the fourth-largest U.S. oil company is considering an exit.
Chief Executive Steve Chazen indicated in April that Occidental's Middle East operations might be put up for sale , and analysts also expect the California division to be spun off.
Chazen said on Tuesday that various options for reshaping the company were being evaluated by the board of directors.
"The board has really just been exposed to this in detail at one meeting, and so it will take a little while," he said on a conference call with analysts, adding that more information would be available toward the end of the year.
Shareholders ousted Executive Chairman Ray Irani in May, ending his more than two-decade run at the company and giving Chazen a free hand.
Occidental said oil and gas production volumes rose nearly 1 percent in the second quarter, to 772,000 barrels of oil equivalent (boe) per day, due to surging output in Texas' Permian Basin and California.
Volumes at the company's international operations declined due to insurgency in Colombia.
Occidental gets about two-thirds of its oil and gas output in the United States, and Chazen said second-half U.S. production would be 2 to 3 percent higher than the first-half's 262,000 boe per day.
The company's second-quarter net profit was $1.32 billion, or $1.64 per share, little changed from a year earlier. Adjusted profit was $1.58 per share, 2 cents below analysts' average estimate, according to Thomson Reuters I/B/E/S.
Revenue rose 3 percent to $5.96 billion.
Occidental said crude oil prices in the Middle East and North Africa fell 7 percent in the quarter, while U.S. prices rose 3 percent.
The company, which is aiming to reduce U.S. drilling costs by 15 percent this year, has cut them by 21 percent so far in 2013.
The Los Angeles-based company offered extensive details on its California operations on the conference call, feeding speculation that it may spin off that unit, which regularly faces tougher government scrutiny than elsewhere.
"We want to make sure that the California company has stable, solid cash flow going forward, and the regulatory environment will take a while to develop," Chazen said. "This is not North Dakota."
Occidental shares fell nearly 3 percent to $87.90 in late-morning trading on the New York Stock Exchange. Through Monday, the stock had risen 18 percent this year.