Former Enron investor relations chief’s earnings testimony challenged by defense…Venezuela removes ExxonMobil from multi-billion dollar petrochemicals project…Saudi Arabia’s oil minister tells Houston oil industry conference that soaring oil prices aren’t sustainable long-term…
The former investor relations chief of Enron appeared tense today when challenged about his testimony on company earnings. Mark Koenig suggested to a federal jury in Houston that ex-CEO Jeffrey Skilling participated in schemes to hike earnings estimates or minimize other revenue. Koenig offered a fourth day of testimony in the fraud and conspiracy trial of Skilling and Enron founder Ken Lay. Both defendants say they’re not guilty. Koenig, who’s testifying for the prosecution, reiterated his belief that top executives made or knew of overnight changes to estimates that he considered suspect. Failure to meet or beat analyst earnings expectations could trigger a drop in the company’s stock price–which Koenig said was all-important at Enron. The Houston-based company filed for bankruptcy protection after its stock collapsed in 2001.
Houston Public Radio business reporter Ed Mayberry has been following the trial from the Federal Courthouse in downtown Houston, and filed this report for KUHF’s 5:04 p.m. local business newscast.
Venezuela has removed Texas-based ExxonMobil from a multi-billion dollar petrochemicals project. The move comes amid wider differences with President Hugo Chavez’s nationalist oil policies. Irving-based Exxon had planned to team up with Pequiven, the petrochemicals division of state oil firm Petroleos de Venezuela. Exxon today released a statement saying Pequiven on January 20th informed ExxonMobil Chemical that it wouldn’t be able to complete the Jose Petrochemical Project feasibility study. The agreement went back to August of 2004. Exxon officials say they regretfully accepted Pequiven’s decision and hope to continue their relationship. Exxon has been resisting tax hikes and contract changes amid a so-called “re-nationalization” of Venezuela’s oil industry.
A janitorial contractor and others will pay nearly $1 million in back wages and interest to some workers in Texas and five other states. The Labor Department today announced the settlement involving alleged overtime pay violations. Colorado-based Omni Contracting Management, ten related janitorial corporations and two individuals will pay nearly 2,800 employees. The corporate defendants were also fined a total of $10,000. The workers are in Texas, as well as in Arizona, Colorado, Minnesota, Nevada and New Mexico, where Omni provides janitorial services to supermarkets and discount stores. The Labor Department didn’t identify the other companies or individuals. An attorney says companies don’t admit to any violations but agreed to settle–rather than defend lawsuits that could be long and expensive.
BP today described its global outlook as “solid.” That’s after high oil prices underpinned strong increases in quarterly and full-year net profits that still fell short of market expectations. The British oil company is the world’s second-biggest by market capitalization. It’s profits fell short of Wall Street expectations, despite a 22 percent increase in the fourth-quarter and a ten-percent hike for the year. BP Chief Executive John Browne said the company’s earnings had been “magnified enormously by the high price of oil, high refining margins, and high gas prices.” Browne said earnings were hurt by the shutdown of BP’s Texas City refinery as a precaution ahead of Hurricane Rita–as well as the impact of accounting changes. He said the refinery was re-commissioned in December and initial production is scheduled to resume by the end of next month. BP says the Texas City closure and the impact of Hurricane Katrina on refining and marketing had cost $870 million in lost profit in the fourth quarter.
Saudi Ambassador Prince Turki Al-Faisal today expressed surprise at President Bush’s State of the Union remarks about less reliance on oil from overseas. Prince Turki spoke to a luncheon of the Dallas World Affairs Council. About 1,000 people attended. The prince in December presented his credentials in Washington. Turki says Bush’s comments about less reliance on foreign oil are the “topic of the hour” in his homeland. He also says Saudi officials are talking with the Bush administration about the president’s speech.
Saudi Arabia’s oil minister says today’s soaring oil prices aren’t sustainable long-term. But Ali Naimi told an oil industry conference in Houston that crude prices must be between $45 and $50 a barrel for petroleum producers to meet global demand. He estimates that demand would grow by 1.4 million barrels per day over the next year. But Naimi says plans for any growth beyond that have been complicated by “all the talk of not wanting our oil.” That’s an apparent reference to President Bush’s recent State of the Union address in which he called for the U.S. to reduce its dependence on oil–and specifically Mideast oil.