Oil prices rise following kidnapping of oil workers in Nigeria…Equipment and manpower shortage looms for independent exploration and production companies…Enron trial resumes on Tuesday…
Oil has soared over $61 a barrel in trading in London, following attacks on oil pipelines in Nigeria. Militants holding nine foreign hostages in Nigeria destroyed an oil pipeline today and blew up a boat in violence that’s cut about 20 percent of crude production in Africa’s oil giant. The movement for the emancipation of the Niger Delta attacked a Shell-operated oil-pipeline switching station known as a “manifold” and a military houseboat in the oil-rich southern region. A Royal Dutch Shell spokeswoman confirmed the oil pipeline attack and said the houseboat was abandoned when the attackers blew it up. It was unclear who owned the boat. Dozens of armed militants seized the nine foreigners after storming a barge belonging to Houston-based oil services company Willbros Group, which was laying pipeline for Shell. The hostages include three Americans. The militants have threatened to attack the country’s oil interests by opening fire on foreign oil tankers. Nigeria’s military says it will do whatever’s necessary to keep international oil tankers safe. The country is Africa’s leading oil exporter and America’s fifth-biggest supplier. Recent attacks on oil and gas pipelines in the West African nation have forced a 20 percent cut in crude exports. In an e-mail to the Associated Press, the militants said they’ll decide what to do with their foreign hostages in the next few days.
Despite a banner year for independent oil and gas companies in the United States, a shortage of equipment and manpower will take a toll this year, according to the Houston office of Grant Thornton. Their survey of about 75 senior industry executives indicates independents are already having trouble meeting drilling demand and expect the situation to worsen. Nearly all say they’ll employ more people at their companies this year than last and will pay significantly more for technical staff. Most anticipate ongoing difficulties in hiring and retaining employees. Respondents say the problem is linked to the graying of the engineering force and the shortage of young professionals entering the field. Most of those surveyed say their companies will invest more in capital expenditures in 2006. Grant Thornton says the findings mark the first time independent exploration and production companies were more concerned with issues like human resources than with price expectations.
Enron accountant Terry West returns to the stand as the government’s third witness in the fraud and conspiracy trial of Ken Lay and Jeff Skilling on Tuesday. The trial recessed last Thursday, and the court was closed for the federal holiday President’s Day. The trial is expected to last four months. The past three weeks have included the tedious replaying of conference call audio tapes, videotapes of analyst presentations and the projection of PowerPoint documents. Defense attorney Daniel Petrocelli says he’s pleased with the trial’s progress.
“I think the week went real fine. The pace is picking up and we’re gonna start making some real progress in getting through the witnesses. A lot of the tapes have been played, although there are a number more that will have to be played in the course of the trial, and the documents are coming out. And I think that the story is being told. I think we are seeing the facts of what happened at Enron for the very first time, and that’s what we wanted.”
Prosecutors hope to show that Enron executives were publicly displaying optimism about the company’s business even when it was falling apart. The defense has been projecting old e-mail exchanges and documents to show that executives believed the company was in a strong financial condition until its collapse. Defense attorney Mike Ramsey says he’s ready for the fourth week.
“It’s going too slow right now. It’s about as, you know, some days it’s, we don’t have much fun, other days we don’t have any fun at all.” Ed: “Are you feeling bruised at all from your interactions with the judge in the past week or two?” “No, no, that goes with the territory. If you don’t get a yellow flag every now and then, you’re probably not playing hard enough. So, I’m very happy the way the case is going.”
Ken Lay and Jeff Skilling blame former Chief Financial Officer Andrew Fastow for any crimes at the company, which they say triggered a crisis of confidence that brought the company down. Testimony from former Enron Broadband Services chief Ken Rice last week implicated Skilling for painting a false picture of the company’s Internet division, although Rice admitted he had no documents to back up his assertion. But the defense pointed out that Rice had struck a deal with the government for a lighter prison term and therefore motivated to falsely testify against his former bosses. Rice is one of 16 former executives who have pleaded guilty to crimes at Enron.
Two senior British judges are to rule Tuesday on the extradition of three former NatWest bankers for Enron-related fraud charges. The former bankers are appealing Home Secretary Charles Clarke’s decision to allow their extradition to face trial in the United States. David Bermingham, Giles Darby and Gary Mulgrew also challenge the Serious Fraud Office’s decision not to investigate their case in Great Britain. The three are alleged to have conspired with Enron executives, including former Chief Financial Officer Andrew Fastow, over the sale of a stake in an Enron entity in 2000. In a November appeal hearing, Lord Justice John Laws and Justice Duncan Ouseley questioned why the U.S. government wanted to extradite them when they are accused of defrauding a Royal Bank of Scotland unit, rather than Enron. British business leaders have complained that the U.S. is abusing a treaty designed to speed up the transfer of suspected terrorists by targeting suspected white-collar criminals.
The embattled president and CEO of RadioShack resigned today. David Edmondson came under fire after admitting to errors in his resume. A statement says RadioShack’s board accepted the resignation after mutual discussions on what’s best for the company. The chain last week announced the closing of up to 700 of its outlets. The board then promoted Executive Vice President and Chief Operating Officer Claire Babrowski to president and acting CEO. Edmondson drew fire last week over a resume that said he earned degrees in theology and psychology from Pacific Coast Baptist College in California. The school, which relocated to Oklahoma and renamed itself Heartland Baptist Bible College in 1998, said Edmondson only completed two semesters. The school also never offered psychology degrees. The resume flap was first reported by the Fort Worth Star-Telegram.
Houston is becoming one of the largest school districts in the nation with a cafeteria automation system. The setup will let parents dictate–and track–what their kids get. Primero Food Service Solutions was developed by Houston-based Cybersoft Technologies. Cybersoft spokesman Ray Barger says the system allows parents to set up prepaid lunch accounts so children don’t have to carry money. It also shows the cashier any food allergies or parent-set diet restrictions for his or her account. The student isn’t allowed to buy an offending item. Parents also can go online to track their child’s eating habits and make changes. The Houston district is the nation’s seventh-largest–with more than 250,000 students. Barger says the system already is being used in schools in Arizona, Oklahoma, Michigan and Tennessee, as well as some other Texas cities.
Houston-based medical waste treatment services provider MedServe has purchased Oklahoma-based Envirosolve, according to the Houston Business Journal. MedServe was created through the merger of Med-Shred and Enserv, and says the new acquisition complements its mail disposal service, designed to manage environmental concerns raised by the more than two million needles and syringes used for insulin and allergy dosing.
Kinder Morgan has increased its downtown office space by more than one-third, according to the Houston Business Journal. The natural gas pipeline company signed a new long-term lease with Trizec Properties, increasing its square footage and growing from six to eight floors in One Allen Center on Dallas Street.
Since its creation 70 years ago, family-owned Shipley Do-Nuts has grown from a small wholesaler to a chain of 200 stores in six southern states. Officials of the Houston-based company like to call the south “the doughnut belt.” Shipley is run today by the founder’s grandson. It’s survived low-carbohydrate diet fads and outlasted bigger rivals. In fact, Krispy Kreme Doughnuts is quitting the Houston market after eight years. The local company has endured by sticking to nearly the same recipe that Arkansas native Lawrence Shipley, Sr., devised in the 1930’s, and by catering to its franchisees. Lawrence Shipley sold hand-cut doughnuts to grocers and opened his first retail store in the 1940’s. When his son, Lawrence “Bud” Shipley, Jr., died last year, his son, Lawrence W. Shipley III took over as president. He plans to stick to the chain’s formula for success.
When tissue and diaper giant Kimberly-Clark surveyed 600 parents about the young kids’ potty-training habits, they learned kids use too much toilet paper–and ineffectively. Company executives decided consumers need a product to teach their kids good bathroom hygiene and how much paper to use. The result, called Cottonelle for Kids, is now hitting store shelves. It consists of paper with paw prints leading to a puppy on every fifth sheet to cue the kid where to tear off–plus a tub of flushable moist wipes. Irving-based Kimberly-Clark won’t disclose sales targets, but executives believe they’ve got a hit. They plan a multi million-dollar advertising push to begin early next month on television, the Internet and in women’s magazines,