Houston oilman pleads not guilty to charges in UN Oil for Food scandal…AT&T to keep name after acquisition by SBC…CSB releases preliminary report on BP Texas City refinery explosion…Last weekend of activities for Six Flags Astroworld…
Houston oilman Oscar Wyatt, Jr., today pleaded not guilty in New York to charges in an Oil for Food scandal. Prosecutors say the 81-year-old Texan conspired to pay illegal kickbacks to Saddam Hussein’s Iraqi regime to win contracts through the United Nations program. Wyatt, with his arm in a sling, entered the plea as U. S. District Judge Denny Chin set a June 20th trial date. Outside court later, Wyatt said he had undergone surgery on his arm. The former Coastal Corporation chairman declined comment on the case. Two men previously charged in the case, David Chalmers, Jr., of Houston-based Bayoil USA and oil trader Ludmil Dionissiev–also entered not guilty pleas on a rewritten indictment. All are free on bail.
Nearly half the thousands of companies that took part in the UN’s Oil-for-Food program in Iraq paid illegal kickbacks and fees to Saddam Hussein’s government for the privilege. That word from a report today from an independent investigation of the now-defunct program. Findings obtained by the Associated Press conclude 2,200 companies from more than a hundred nations paid Iraq’s government nearly $2 billion more than they should have. It says Saddam made $11 billion more through sales of smuggled oil. The $64 billion program ran from 1996 to 2003 when the U. S. invasion began and was one of the biggest humanitarian operations in history. The idea was to ease suffering caused by UN sanctions. It allowed Saddam to sell oil supposedly to buy humanitarian goods for his people.
The AT&T name will live on after the long distance phone company is acquired by San Antonio-based SBC Communications. SBC is renaming itself and most of its products under the more than century-old AT&T brand. The deal has been in the works since January. The name change had been widely predicted ever since the merger was announced, given the global recognition and reputation of AT&T. SBC provides local phone service and other products in 13 states. AT&T, which once stood for American Telephone and Telegraph, traces its roots as a company back to the invention of the telephone by Alexander Graham Bell. He sought the patent in 1876.
Federal antitrust regulators today approved the multibillion-dollar mergers of SBC Communications and AT&T, and of Verizon Communications and MCI. The Justice Department attached some conditions to the mergers, requiring Verizon and San Antonio-based SBC to divest some local fiber-optic network facilities in 19 metropolitan areas. Without the condition, the mergers would have resulted in higher prices for certain customers in eight metropolitan areas in Verizon’s territory and 11 metropolitan areas in SBC’s area. That’s what the Justice Department said in announcing approval. The Federal Communications Commission still must sign off on the deals.
The BP refinery in Texas City where 15 people died in fiery explosions had a history of dangerous releases of flammable material. The preliminary report was released today by the U. S. Chemical Safety and Hazard Investigation Board. The review also says the startup of the processing unit that led to the March 23rd explosion should not have occurred because of existing malfunctions with its controls. The blast happened in an isomerization unit that boosts the octane level of gasoline. More than 170 people also were injured in the blast. On Monday, BP announced that former U. S. Secretary of State James Baker will head a panel to investigate safety and management oversight at BP Products North America.
BP Products North America says some of the interim findings announced today by the Chemical Safety and Hazard Investigation Board appear to be inconsistent with evidence gathered by the company’s own investigation team. BP plans a meeting with the CSB to discuss their findings before preparing the company’s final investigation report.
Six Flags Astroworld has modified its operating schedule and limited ticket sales for its last weekend of scheduled operation. The park is closed Friday and will limit hours on Saturday and Sunday to 10 a.m. through 6 p.m. Only season pass holders and those who have purchased tickets prior to arriving at the park will be allowed entry. No tickets will be available for purchase at the park’s front gates. However, a limited number of print-and-go tickets have been on sale through the park’s Web site. Park officials say when Six Flags Astroworld reaches capacity this weekend, signs will be posted closing the park to additional guests.
It is the economic tide after the hurricanes. The Labor Department says the number of people who lost their jobs because of Hurricanes Katrina and Rita has now climbed above the half-million mark. More jobless claims are expected in coming weeks because of Hurricane Wilma. Another 24,000 people who lost jobs because of the devastating Gulf Coast storms are said to have filed applications for unemployment benefits last week. That pushes the total over the past eight weeks to 502,000 hurricane-related claims. Overall, the total number of jobless claims dropped for the second straight week. The decline of 28,000 puts the number of claims at a seasonally adjusted level of 328,000.
All three of South Florida’s largest airports are now open in the wake of Hurricane Wilma. Fort Lauderdale-Hollywood International Airport was the last to reopen. Its first flight arrived this morning. Miami International Airport and Palm Beach International Airport reopened yesterday. Miami’s largest carrier, Fort Worth-based American Airlines, expects to run at only 75 percent of its usual 500 flights. American is the nation’s largest airline.
Southwest Airlines is adding 49 flights, including eight to Hurricane Katrina-recovering New Orleans, in the next few months. Dallas-based Southwest–beginning November 12th–will add two daily non-stop roundtrips each between New Orleans and Dallas; Nashville, Tennessee; and Orlando and Tampa, Florida. That will more than double Southwest flights to New Orleans, where the carrier operated more than 50 daily flights before Katrina hit in late August. Service will also be increased in November between Las Vegas and several cities. Beginning February 5th, Southwest plans additional flights in Houston, Nashville, Chicago, Austin, Las Vegas, Oakland, California and other cities.
American Express Business Travel is warning companies to plan a bigger budget for employee travel next year. It forecasts that airfares will rise by three to six percent. And it expects hotel room rates to increase by one to three percent, with upscale properties costing three to five percent more. Matthew Davis, the company’s director of global consulting, says there are already “very strong trends” for airfare increases, as well as hotel and car rental expenses. He says airfares are probably at a low right now, because low-cost airlines have driven them down over the years. But now the carriers are struggling with the rising cost of jet fuel. Davis says there’s increased demand for business-class seats, which is pushing the already pricey fares even higher. He says companies are beginning to realize that their main assets are their employees, and that they “need to arrive in just as good shape as when they left, to be as productive as possible.”
Southwest Airlines expects fuel costs to rise as much as $600 million next year, and may add a surcharge to fares. Southwest has protected 85 percent of its fuel needs for this year at $26 per barrel of crude oil by using financial instruments known as hedges, limiting the effect of price variations. Next year’s hedges drop to 70 percent of its needs at $36 a barrel.
Houston aviation officials conducted their third and final public information session on proposed recommendations for the George Bush Intercontinental Airport master plan at the Humble Civic Center. After undergoing a review process, the airport’s planning team is now completing the final stages of the master plan process. The plan includes future development designs for the airfield, passenger terminal, access system and support facilities.
Natural gas prices are plunging after word that supplies have increased more than expected for the second week in a row. The Energy Information Administration has reported a build of 77 billion cubic feet in natural gas storage. That’s 11 billion more than analysts were expecting. And the injection comes in a week when about 32 billion cubic feet of Gulf of Mexico production remains shut in. Traders had pushed prices way above their all-time record high in the aftermath of the hurricanes, on speculation that lower storage and prolonged outages could lead to a buyers’ panic during the winter. That speculation probably can be put on ice for now. Total storage is just 106 billion cubic feet below last year’s record for the date, and 2.8 percent above the five-year average.
Profit more than tripled for Marathon Oil in the latest quarter due to higher oil and natural gas prices. The integrated oil company today reports earning $770 million in the third quarter. That compares to year-ago net income of $222 million. Income from refining and marketing climbed to $814 million from $391 million one year ago. Officials say the numbers were driven by higher refining and wholesale marketing margins due to recent hurricanes. Marathon’s Garyville, Louisiana and Texas City units have returned to operation after being shut downs because of Hurricanes Katrina and Rita.
Exxon Mobil, the largest publicly traded oil company in the world, says third-quarter profit surged in the face of higher crude-oil and natural-gas prices. That is despite damage to production caused by hurricanes. Net income soared to $9.9 billion. Excluding certain items, earnings were $8.3 billion. Revenues topped $100 billion in the quarter. The company cautions that reduced volumes and higher costs will also hurt the fourth quarter.
Houston-based Pogo Producing Company has been awarded drilling rights offshore Vietnam in the Phu Khanh Basin. Pogo joins Chevron and India’s Oil & Natural Gas Corporation in winning bids.
CenterPoint Energy is building a 168-mile pipeline from Texas to Louisiana in a ten-year deal to supply natural gas to XTO Energy. The $375 million pipeline from Carthage to the Perryville Hub is planned for completion by the winter of 2007.
Houston-based Enbridge Energy Partners is selling natural gas processing plants and pipelines to TexStar Field Services in a $106 million deal. TexStar is buying 748 miles of gas-gathering and transmission pipelines in Texas and Oklahoma, as well as the Eustace gas-processing plant and stakes in three other facilities.