Newspapers obtain transcripts of BP investigation employee interviews…Dynegy reports third-quarter profit slide…Senate Energy and Commerce Committees to hear testimony from several Houston-based oil executives…
Workers at the BP refinery in Texas City had concerns about safety practices months before explosions in March killed 15 people. Details are in personnel interviews conducted by the company. Operations manager Kathleen Lucas, in an April 28th interview, said one of her observations was the site looked a little run down. The 15 interview transcripts were obtained by the Galveston County Daily News and the Houston Chronicle after a judge ordered BP to turn them over. The statements were gathered during BP’s internal investigation into the March 23rd blast. More than 170 people were hurt in the blast. The newspapers argued the records involve public health and safety. A judge on October 14th ruled that the interviews were court records and should be made public. The judge denied BP’s motion to keep the records closed while it appealed.
The U.S. Energy Secretary told CNBC interviewers that major oil firms need to provide details of how they are investing their record profits. Sam Bodman told of his hopes that energy companies reinvest funds in productive resources, according to Reuters. The Senate Energy and Commerce Committees will hold a joint hearing on November 9th to hear testimony from several Houston-based executives, including Jim Mulva with ConocoPhillips, John Hofmeister with the U.S. division of Royal Dutch Shell and Lee Raymond with Irving-based Exxon Mobil. Lawmakers have expressed concern about record oil company profits and forecasts for record high winter heating bills. Some want oil companies to donate a portion of their record profits to help the poor pay those heating bills.
While it will cost you more to heat your home this year, it won’t be as bad as first believed. In its monthly short-term energy outlook, the Energy Information Administration says households using natural gas will shell out $306, or 41 percent more than they did in 2004. In its last monthly report, EIA predicted those households would see a surge of $350, or 48 percent. EIA also said homes heated by heating oil will spend $325 more this winter. It predicted a $378 jump in October. Propane heating bills are now expected to increase by $230, not the $325 forecast last month. Households that heat using electricity will see their winter heating bill increase by $33, compared with the $38 rise EIA forecast in October. Both futures and retail prices have fallen during the past two weeks as more Gulf of Mexico facilities came back on line.
Dynegy today reports its third-quarter profit slid by more than two-thirds. But results for the Houston-based company topped Wall Street expectations and Dynegy has raised its full-year 2005 forecast. Net income after paying preferred dividends declined to $23 million in the three months that ended September 30th. That compares to earnings of $72 million one year earlier. Revenue totaled $770 million in the year-ago period. Dynegy says its results were weighed by a $25 million pre-tax legal and settlement charge associated with its customer risk management segment. The company forecast net income after paying preferred dividends of $435 million to $455 million for 2005–compared with its previous estimate up to $410 million.
The former directors of Pennzoil-Quaker State are celebrating last week’s jury decision supporting their claim that they fulfilled their duties to shareholders in the handling of the sale of the Houston company to Royal Dutch Shell. The former directors said they ensured shareholders had the information needed to make an informed decision when the company was sold. Plaintiffs who were shareholders before the merger contended the company was worth more than the $22 per share paid by Shell. Shell paid $1.9 billion for Pennzoil in 2002.
Shell Exploration & Production says it expects to have most currently displaced New Orleans employees back home, and almost all returned to the city in the first or second quarter of next year. Shell says the timetable is dependent on the availability of public services and maintaining short-term business continuity. Shell has been operating from transitional offices, including here in Houston, to implement repair and recovery plans for damaged offshore facilities, restoring Gulf of Mexico production and assisting employees with personal recovery.
The chairman and CEO of Six Flags again urged investors today not to support a group seeking to take over the board. Kieran Burke instead asked investors to wait for Six Flags to finish the process of selling the company. Burke said he was confident there will be an attractive bid to recommend to shareholders by December. Six Flags has several parks in Texas. The Oklahoma City-based theme park operator put itself up for sale in August. That’s when an investment group led by Washington Redskins owner Dan Snyder began an effort to replace Burke and two other board members with his own candidates. Snyder’s group–called Red Zone–holds about 11 percent of Six Flags’ stock. Red Zone is seeking shareholder consent to remove Burke and fellow directors Stanley Shuman and CFO James Dannhauser.
Airlines being squeezed by high fuel costs continue to turn to their Web sites and other technology to save money. The airlines are pushing customers to book travel online, which saves the carriers on labor costs. The Web site of the nation’s largest carrier–Fort Worth-based American Airlines–draws upward of a million visitors per day. American Vice President Bella Goren says the site’s revenue has increased 60 percent from one year ago, accounting for just over one-third of American’s total ticket sales. American won’t reveal precise dollar figures, but Goren says it had ten days in September with more than $22 million of bookings per day. American also is trying to boost sales of hotel rooms and rental cars on its site. It’s working with a seller of last-minute vacation packages. The Associated Press reports the most successful airline Web site, in terms of percentage of its tickets sold online, likely belongs to southwest airlines. The Dallas-based carrier sells more than half its tickets on its Web site.
The Federal Emergency Management Agency says it will reimburse Harris County $1.2 million for costs associated with providing temporary shelter for hurricane evacuees. The federal funds are through FEMA’s Public Assistance Program, administered by the State of Texas. The state will be reimbursed for providing shelter, food, water, utilities, medical services, telecommunication, security, janitorial operations, transportation and shelter staffing.
The Houston Retail Performance Update from O’Connor & Associates says its unclear how the increase in unemployment brought by the hurricanes, record high gasoline prices and high home heating oil prices will affect consumer spending this year. But the National Retail Foundation projects an increase in holiday sales over last year. Bernard Sands retail analyst Richard Hastings expects the holiday season will be the most heavily discounted since 2002. High-end and large department stores have been reporting same-store sales increases in the past month, but some smaller stores report same-store declines.
Target is closing its Sharpstown store on the Southwest Freeway on January 29th after what the company calls careful consideration of the long-term economic viability of that location. That outlet opened in February 1970. Target will continue operating 12 stores in the Houston market.
Motiva Enterprises has tapped KBR to plan and design a potential refinery expansion. Motiva announced in September that it intends to increase refining capacity at one or more of its petroleum product refineries. The company says all three Motiva refineries on the Gulf Coast are strategically located to be viable candidates for expansion. Houston-based Motiva is a joint venture between Shell Oil and Saudi Refining.
Chevron will ship fuel from a natural gas import terminal in Sabine Pass on a pipeline owned by Kinder Morgan Energy Partners. Chevron has also started construction for its $3.5 billion Tahiti Field production facility. Production on the platform has begun at Technip’s shipyard in Finland, and fabrication will take place at Technip’s facility near Corpus Christi.
Houston-based Cal Dive International has acquired Aberdeen, Scotland-based Helix Energy Ltd., for $31 million. Helix Energy provides reservoir and well technology services to the upstream oil and gas industry, including geoscience, reservoir and petroleum engineering, production technology and well drilling operations.
Transocean is performing a $300 million upgrade of one of its semisubmersible drilling rigs for an affiliate of Royal Dutch Shell for a three-year contract. Work on the rig is expected to be completed by May 2007. Transocean has a fleet of 92 mobile offshore drilling units.
PennWell plans to produce a special publication on the development of Libyan oil fields as a supplement to the Oil and Gas Journal, Offshore and Oil and Gas Financial Journal. The special publication is being produced in agreement with the Lyamec Group.
The Houston Apartment Association is building a new office at Westway Park at West Sam Houston and Clay Road, between where facilities are being built for Invensys and BJ Services. Westway Park is a 150-acre master-planned, deed-restricted development at the heart of the “Techway”–home to a growing roster of high-tech companies in that portion of the Sam Houston Tollway between U. S. 59 South and U.S. 290.
New medical office condominiums are being built in The Woodlands by an investment group called 242 Woodlands, according to the Houston Business Journal. The Woodlands Professional Office Condominiums will be at College Park Drive, west of St. Luke’s Community Medical Center. It will consist of three, one-story buildings, with construction set to begin in January and completed by May.
Texas Gulf Coast Medical Group and Medistar plan to build a new medical office building and retail center in the Webster-Clear Lake area, according to the Houston Business Journal. The Medical Plaza at Clear Lake I and II will be located at Highway 3 and Blossom, next to Medstar’s new Triumph Hospital and Clear Lake Hospital. SpawGlass Construction of Houston is the general contractor for the medical office building.
Blockbuster today posted a third-quarter loss. Charges and tighter margins–due to cutting late fees–weighed on the Dallas-based company’s bottom line. The nation’s biggest movie-rental chain lost $491.4 million dollars for the three months that ended September 30th. That compares with a one-year-ago loss of $1.41 billion. Setting aside charges, Blockbuster lost $24.6 million in the latest period. Blockbuster’s adjusted loss matched the average estimate from analysts polled by Thomson Financial. Sales in the latest quarter fell nearly four percent at worldwide stores open at least one year.
Fossil today reports its earnings in the latest quarter were hurt by weak domestic watch sales. Fossil earned $22.3 million on revenue of $257.5 million. Its fiscal third quarter ended October 1st. In the same period one year ago Fossil earned $23.4 million. Domestic watch sales fell seven percent, offsetting gains from international sales–which rose nearly 13 percent.
The eight Gingiss Formalwear stores in the Houston area have been sold to San Antonio-based PrecisionWorx, and will continue operating under the name Tuxedo Junction. Gingiss became insolvent and ceased operations in 2003, and under a new cooperative the company resumed operations in 2004 with the Tuxedo Junction name. There are now more than 100 Tuxedo Junction outlets.