The Occidental Petroleum Corp headquarters is pictured in Los Angeles, California September 16, 2013. REUTERS/Mario Anzuoni

(Reuters) - Occidental Petroleum Corp OXY.N is exploring a sale of its pipeline assets, hoping to fetch more than $5 billion and free up capital to invest in exploration and production as oil prices rebound, people familiar with the matter said on Tuesday.

Occidental’s decision to shed the assets is the latest example of an oil company balking at the capital expenditure required to maintain U.S. pipelines, which have been plagued by bottlenecks and require construction of new networks.

Hess Corp HES.N and Oasis Petroleum Inc OAS.N are among the companies that have sold or spun off pipelines in the past year, looking to take advantage of high valuations for these assets, which have been buoyed by the capacity constrains.

Inability to transport enough oil out of the Permian Basin of West Texas and New Mexico, the largest U.S. oilfield, combined with increasing appetite for U.S. oil exports, could help Occidental sell its pipelines for top dollar, according to the sources.

Occidental is working with investment bankers on an auction for the pipeline assets, added the sources, who asked not to be identified because the matter is confidential. Occidental representatives did not immediately respond to requests for comment.

Occidental’s midstream assets include a major U.S. crude pipeline, a stake in a gas pipeline in the Middle East, a crude export terminal in Texas, and the Centurion Pipeline, a 2,900 mile line carrying crude from the Permian Basin of West Texas and New Mexico to Cushing, Oklahoma.

A year ago, Occidental tried to find a buyer for its 50 percent stake in its Ingleside Energy Center, a crude oil storage and export terminal in Corpus Christi, Texas. That sale process was not completed, and Occidental is including the facility in its package of midstream assets, one of the sources said.