OPEC confirms global crude production cut…Indonesia cancels Exxon Mobil natural gas development contract…650 economists call for minimum wage increase…
The head of OPEC confirms that the organization will cut global crude production by a million barrels a day, hoping to keep prices from falling further. The official says the cut will be put into place at the end of the month, with details yet to be fully worked out. OPEC’s output quota now is at 28 million barrels a day. Including Iraq, which is not bound by the quota system, OPEC’s daily production is roughly 30 million barrels. The last time OPEC trimmed its output was December 2004, when oil traded slightly above $40 a barrel.
Indonesia has canceled a contract with Exxon Mobil to develop a natural gas field in the East Natuna Sea. Indonesia’s energy minister says the country’s now negotiating a new deal with Irving-based oil company. Exxon Mobil insists that the deal stands. It says it’s told the Indonesian government it would fulfill its contractual obligations to develop the Natuna block and was in discussions with potential gas buyers. A lengthy dispute between the two parties would concern foreign investors. They’ve long complained that poor contract enforcement in Indonesia makes it hard for multinational companies to tap the country’s rich natural resources. Exxon Mobil and state-owned Pertamina are the joint contractors for Natuna, with Exxon Mobil holding a 76 percent contractor’s share to Pertamina’s 24 percent. Discovered in 1973, the field is estimated to have 46 trillion cubic feet of recoverable gas.
BP’s 85-person North America Alternative Energy business will move its headquarters to the Bank of America Center in downtown Houston. The business oversees BP’s wind energy, natural gas-fired power generation and hydrogen power projects, including wind power in development and plans to build the country’s first industrial-scale hydrogen power plant with carbon capture.
Ross Stores says it’ll acquire 46 former Albertsons supermarkets in six states–including Texas–as part of its ambitious expansion plans next year. The Pleasanton, California-based retail chain announced plans Tuesday to take over sites in Texas, Oklahoma, California, Florida, Arizona and Colorado by November. It plans to convert them to Ross Discount Stores or its sister brand DD’s Discounts as early as March. Ross wouldn’t specify which of the Albertsons stores it will take over. Its latest plans for expansion are among the biggest in the history of Ross, which started as a family-run junior department store chain in the San Francisco Bay area in 1957. Ross sells name-brand apparel and accessories at prices 20 to 60 percent below those of department stores and specialty shops. It operates 766 stores in 27 states and Guam.
More than 650 economists–five of them Nobel Prize winners–are calling for an increase in the minimum wage. Among the prize winners are Kenneth Arrow of Stanford University, Lawrence Klein of the University of Pennsylvania and Clive Granger of the University of California, San Diego. They claim the value of the last increase, in 1997, has been “fully eroded.” Federal minimum wage is now $5.15 an hour, but 22 states and the District of Columbia have set their minimum wages above that. Critics of a hike contend it would lead employers to cut jobs or move them offshore. They also say that many minimum wage earners are teens working after-school jobs. The economists say that a phased-in increase to $7.25 an hour would benefit the labor market, workers and the overall economy.
America’s budget deficit is at its lowest amount in four years. Officials report the deficit now sits at just under $248 billion for the fiscal year that ended last month. That’s down 22 percent from a year earlier, and is far lower than what the White House projected earlier in the year. The federal government spent seven percent more last year. But that was offset by a nearly 12 percent increase in tax revenues. It gives the GOP something to brag about just weeks before the midterm elections. But Democrats warn the deficit will skyrocket soon enough, once baby boomers retire and start tapping into Medicare and social security.
This could be the biggest year on record in terms of corporate chief executive officers leaving their jobs. Outplacement consultancy Challenger, Gray and Christmas says an unprecedented 152 CEOs exited in September breaking the record of 148 set in back in May. That works out to 7.6 departures per business day. The year, which has now seen more than 1,000 chief executives leave their positions, is on its way to becoming the biggest CEO turnover year on record. Thus far in 2006, 517 CEOs have either resigned or stepped down–but stayed with the organization in some capacity, 275 have retired and 23 have been fired.
A $2.5 million rock club and bar opens in mid-November on the second level of Bayou Place in downtown Houston. The Houston Business Journal says r?cbar will feature a 60-foot “rock” bar with adjacent seating areas, a live music stage and a 20-foot video wall. Current tenants in Bayou Place include the Angelika Film Center & Caf?, the Hard Rock Caf? and the Verizon Wireless Theater.
Constellation Energy Group says it’s agreed to sell six gas-fired electric generation plants to privately held Tenaska Power Fund for $1.6 billion in cash. The plants to be sold generate more than 3,100 megawatts of power. Among them is the Rio Nogales plant in Seguin, Texas. The deal is expected to close in 2006 or early 2007, subject to regulatory approvals and other closing conditions. Constellation is the parent of Baltimore Gas and Electric but supplies electricity, natural gas and energy services nationwide. It’s in the process of selling itself to FPL Group, the parent of Florida Power and Light.
Perry’s Restaurant Group will open its largest restaurant in mid-November at Memorial City Mall. Perry’s Steakhouse & Grill is being built east of the Macy’s store facing I-10. Perry’s operates five outlets throughout the Houston area, but this will be the company’s first venture inside Beltway 8.