Transocean and GlobalSantaFe announce consolidation…TXU fined for illegal contract extensions…BP fined for Texas City plant violations…
Offshore drilling firm Transocean is merging with rival GlobalSantaFe. The two Houston-based companies say their consolidation will create a company with a full range of offshore drilling services in the world’s key markets. The deal includes a $15 billion cash payout to shareholders of both companies. That’ll be funded through a bridge loan due one year after closing. Shareholders of both will also get shares in the new company. The two companies estimated the value of the new company will be about $53 billion, including debt. Transocean Chief Executive Robert Long will serve as CEO of the combined company. GlobalSantaFe CEO Jon A. Marshall will serve as president and chief operating officer of the combined entity. GlobalSantaFe Chairman Robert Rose will be chairman. The new company will retain the Transocean name and trade on the New York Stock Exchange under Transocean’s symbol “RIG.” Both of the old companies will be equally represented on the new 14-member board.
TXU must pay $5 million for illegally extending contracts of some companies by one year—when they didn’t respond to renewal notices. The Public Utility Commission says the penalty involves about 4,000 small businesses. Dallas-based TXU’s Retail Electric Division told customers it would renew a contract for 12 months if customers didn’t reply to renewal notices. But PUC rules limit automatic renewals by retail electric providers to 31 days. The commission on Friday approved the penalty, under terms of a settlement reached in June by regulators and TXU officials. TXU has five days to pay the penalty. TXU also must notify affected customers that they could choose another plan or pick a new electric provider without a cancellation fee or penalty. Separately, the PUC ordered Garland to pay about $6,000 in penalties involving two settlement agreements regarding electricity scheduling issues last year.
A safety agency fined BP Products North America $92,000 for violations at its Texas City plant. It’s the same unit where a March 2005 explosion killed 15 people and left about 170 hurt. The Occupational Safety and Health Administration noted four violations of safety rules related to process safety management, and one for rules related to hazardous locations. OSHA administrator Dean McDaniel says these citations are based on identification of hazardous conditions similar to those that led to the 2005 explosion. BP officials in Houston didn’t immediately comment. The company has 15 working days to comply, request a conference with OSHA or contest the citations and fines. OSHA in September of 2005 fined BP $21.3 million over the deadly blast months earlier. BP agreed to review safety management systems and equipment.
Wages for highly-skilled technology professionals in 2007 continue surpassing pay rates from 2006 according to the Yoh Index of Technology Wages. It averaged $31.61 during the middle of the second quarter. The index indicates a 4.29 percent increase in wage growth compared to the same period in 2006. The index is used by Fortune 500 companies to determine salary scales, the average hourly wage for high-impact technology workers.
Halliburton’s second-quarter profit more than doubled to $1.5 billion. The Houston-based oilfield services company largely credits a $933 million gain from the separation of its former subsidiary, Houston-based KBR. Revenue in the quarter rose 20 percent to $3.7 billion. The oilfield services conglomerate said sales rose worldwide, particularly in the eastern hemisphere. Excluding the gain from the KBR split, Halliburton said income from continuing operations totaled $595 million for the quarter. That’s up about 19.5 percent from last year’s second quarter. Last week, Halliburton’s larger competitor, Houston-based Schlumberger, said its second-quarter profit jumped 47 percent because of an active world market for oil and gas.