OSHA fines Dow Chemical for safety violations at Freeport…Citigroup earmarks funds to support growth of alternative energy…Parker Drilling claims world record with seven-mile well…
The head of ConocoPhillips said the company continues to work toward an amicable resolution with Venezuela over its oil operations. But Jim Mulva acknowledged negotiations are sensitive and arbitration is possible. Houston-based ConocoPhillips is the only major oil company in Venezuela that hasn’t agreed in principle to state control of its projects. The government of Venezuelan President Hugo Chavez is taking a minimum stake of 60 percent in projects in the country’s oil-rich Orinoco River basin. Chavez is inviting the companies involved to remain as minority partners. ConocoPhillips, BP, Irving-based ExxonMobil, Chevron, France’s Total and Norway’s Statoil have until June 26th to negotiate terms. Mulva spoke to reporters after the company’s annual shareholders meeting in Houston.
Federal job safety officials have fined Dow Chemical $10,000, alleging safety violations at its Freeport plant. Documents show the Occupational Safety and Health Administration fined Midland, Michigan-based Dow $5,000 for each of two alleged offenses. OSHA’s ruling follows an investigation of the November 15th death of a process operator the day after chlorine was released into the air. The citations weren’t linked to that incident. Dow spokeswoman Tracie Copeland tells The Facts in Clute, Texas, that Dow officials expect to meet this week with OSHA representatives.
The nation’s largest financial institution says it’s directing $50 billion over a ten-year period to address global climate change. Citigroup says the funds will go to “investments, financings and related activities to support the commercialization and growth of alternative energy and clean technology.” The bank says the total includes nearly $10 billion Citi has already provided for activities to address climate change. As part of the program, Citi will host a conference early next month to bring senior executives from the corporate, political, regulatory and advisory arenas together to discuss climate issues.
Irving-based ExxonMobil has agreed to pay $400,000 in penalties to California for air permit violations at its biggest West Coast refinery, according to the Houston Chronicle. The Irving-based firm also agreed to spend up to $2 million on a plan to cut excessive emissions of carbon dioxide and other pollutants. The Texas Commission on Environmental Quality proposed a $136,200 penalty for alleged health, safety and water code violations at its Beaumont refinery.
Key lawmakers have tentatively agreed on a compromise that could reduce rates for Texas customers who pay the most for electricity. Details came from an aide to Senator Troy Fraser. Daniel Womack says his boss and representative Phil King have reached a compromise. The agreement still must be approved by other members of a House-Senate conference committee. The Fort Worth Star-Telegram quoted King in first reporting the deal on its Web site. The House version would have given a 15 percent rate cut to about two million Texans. They are still paying the basic rate charged by former monopoly utilities such as TXU and Reliant Energy. Those customers have not taken advantage of deregulation to switch electric companies or sign up for lower-priced, long-term contracts. The Senate would have given the Public Utility Commission power to approve or reject the $32 billion sale of TXU to private equity investors.
McDermott International subsidiary Babcock & Wilcox has been awarded a $250 million contract by American Electric Power for its Southwestern Electric Power subsidiary, according to the Houston Business Journal. The contract is for the design, supply and construction of components for the John W. Turk, Jr., power plant in Hempstead County, Arkansas.
Houston-based Parker Drilling has claimed a world record for drilling a well, according to the Houston Business Journal. The Z-11 well, drilled for ExxonMobil’s Russian subsidiary, reached seven miles–37,016 feet–under the sea floor. The Sakhalin Island well took 61 days to drill, reaching its targeted depth 15 days ahead of budget.
More than 42 percent of all retirees will have significantly less income at age 80 than they did at 67, according to an Urban Institute study. The largest decline in wealth and income among retirees occurs for those who become widowed or divorced. The study finds that the death of a spouse or the onset of poor health can decrease wealth and income. Median wealth declines as much as 44 percent, income falls by 37 percent and 33 percent fall below the poverty level. Almost 30 percent of those between 67 and 80 will experience the onset of poor health, which could decrease their wealth by 38 percent and income by 13 percent.
TXU Corporation swung to a first-quarter loss from a year-ago profit. The Dallas-based electric utility blames hefty charges for halting development of certain coal-fired power plants. Losses after paying preferred dividends totaled $497 million. That’s compared with year-ago profit of $576 million. The state’s largest electric power generator has agreed to a $32 billion buyout led by New York-based Kohlberg Kravis Roberts and Fort Worth-based TPG Incorporated, formerly Texas Pacific Group. The group said in February it would drop plans for eight of 11 coal-fired plants TXU was developing. The buyout awaits federal regulatory and shareholder approval. Excluding costs such as the charge for dropping the coal-fired plants, TXU says it would have earned $444 million. That’s down 16 percent from the first quarter of 2006. Revenue dropped 28 percent to $1.67 billion. TXU says it expects its adjusted profit to fall year-over-year because of a planned extended outage at the Comanche Peak nuclear power plant and more planned outage time for coal-fired plant maintenance–as well as lower average retail pricing.
The Texas Instruments president and chief executive has raised TI’s profit expectations. Rich Templeton says he expects strong growth in the coming years for the Dallas-based supplier of computer chips used in more than half the world’s cell phones. Templeton offered no exact time frame–but he says TI would seek to raise its profit margins to 55 percent from 21 percent in the first quarter of 2007. Last month, TI topped Wall Street’s earnings estimate, despite a 12 percent drop in first-quarter earnings. The company also forecast second-quarter revenue ranging from $3.32 billion to $3.6 billion. It plans to release a mid-quarter update June 11th. Templeton also touted the company’s analog chip business, which brings in 40 percent of total sales, as a major source of growth in the coming years. Texas Instruments is the market leader in analog chips but only has about 13 percent of the market.
Comcast dazzled a cable industry audience with a new cable modem. CEO Brian Roberts showed how it can download at 150 megabits per second, or roughly 25 times faster than today’s standard cable modems. He did a download in fewer than four minutes that would have taken two weeks by dial-up. Roberts says the cost of modems that would support the technology, called “channel bonding,” is “not that dissimilar to modems today,” and could be available “within less than a couple years.”