Offshore oil and natural production resumes in Gulf of Mexico…Accredited Home Lenders to shut down most of its business amid troubles in home lending industry…Four major banks borrow $500 million from Federal Reserve in effort to restore liquidity to markets…
Oil and natural gas operations in the U.S. Gulf of Mexico have begun returning to normal, although work in Mexico’s chief offshore oil-producing region may be suspended for a few more days because of Hurricane Dean. Andy Radford with the American Petroleum Institute says the industry learned from the storms of 2005.
“With Ivan, Katrina and Rita, those three storms showed us that we needed to take a look at what we were doing out there and try to minimize the failed moorings, so we issued standards on that. A lot of damage during the storms was the equipment that was placed on the platform—the crew quarters and some of the processing equipment for the oil and gas. We saw a lot of damage to the platform itself, from those getting blown around by the wind. If water got up into the deck it would move those things around and it made it quite difficult to get production back on line, even though the structure was still standing. We issued a bulletin 2TD, which is for tie-downs of this equipment that’s on a platform.”
Radford says other changes have been made to minimize damage on deepwater rigs and platforms.
“Companies have made upgrades to their equipment. On the permanent production facilities, you know, moving critical equipment higher on the platform, if possible. On the mooring side, the availability of equipment is a bit of an issue. Some of the manufacturers of the chain and the ropes and the equipment that’s used to moor these floating drilling units, you know, the availability has not been there, but we’re catching up and trying to get everything we can done before the height of the storm season.”
Shell Oil and ExxonMobil, as well as Noble, Transocean and Pride International have been bringing work back on line. Shell has reduced rates at the Deer Park refinery in anticipation of an interruption in crude oil supply. The company says there is the potential for delayed oil shipments.
San Diego-based Accredited Home Lenders has announced plans to shut down most of its business amid troubles in the home lending industry. Accredited says it will cut its work force by 1,600 jobs and close 65 branches. The company will immediately stop accepting applications for home loans in the U.S., though it will honor the loans it has already committed to finance. The company will close its retail lending business, which issues home loans directly to consumers. Accredited is also scaling back much of its wholesale lending division, which issues mortgages through brokers. The company will close five of its ten brokered loan offices and lay off about three-fifths of the unit’s workers.
Luxury homebuilder Toll Brothers says its third-quarter profit tumbled, hurt by hefty write-downs and higher-than-expected cancellations. Chairman and CEO Robert Toll says in a statement that the company continues ”to wrestle with the interrelated challenges of softer demand and excess housing supply in most markets.”
With home sales plummeting, the number of Real estate agents working in the profession is expected to drop this year. The National Association of Realtors says it will be the first such decline in a decade. The group ended last year with nearly 1.4 million members, nearly double the number in 1997. This year, the group’s membership is expected to finish down four percent from last year. Trade groups in two of the hardest-hit states, California and Florida, also forecast membership drops.
Four major banks say they each have borrowed $500 million from the Federal Reserve’s discount window, amid efforts to restore liquidity to the markets. Citigroup, JPMorgan Chase, Bank of America and Wachovia each stressed they themselves have “substantial liquidity” and the ability to borrow money elsewhere. In a joint statement, three of them say they decided to borrow directly from the central bank to demonstrate “the potential value of the Fed’s primary credit facility” and encourage its use by other banks. Tapping the discount window had previously been seen as a last resort for banks in trouble, a perception the Fed sought to eliminate. Citigroup was the first to announce its decision to borrow the money, “on behalf of its clients” at Citibank.
More children’s items made in China have been recalled because they contain high levels of lead. The largest recall affects about 250,000 Spongebob Squarepants address books and journals, manufactured in China and imported by Martin Designs. They have been recalled because paint on the metal spiral bindings can contain high levels of lead. About 66,000 spinning tops and about 4,700 pails painted with Thomas & Friends, Curious George, circus scenes or solid colors have also been recalled because paint on the wooden handles contains high levels of lead. About 14,000 Toby & Me jewelry sets, and about 7,900 Children’s Divine Inspiration charm bracelets have also been recalled. No injuries have been reported.
A utility executive says there were seven bidders on a proposed coal fired power plant in southwest Arkansas. Three were from companies other than Southwestern Electric Power Company and its parent corporation. SWEPCO has 464,000 customers in Arkansas, Louisiana and northeast Texas. SWEPCO Director of Business Operations Tom Brice told the Arkansas Public Service Commission that the three bidders were rejected because their plans wouldn’t provide the generating capacity SWEPCO needed from the plant. Brice acknowledged that the other four bids came from SWEPCO and its parent company, American Electric Power. But he said a strict code of conduct was followed in the bidding process. Brice says the company team that formulated the request for proposals worked independently of the teams that developed and accepted the bids, Brice said. The commission is hearing from SWEPCO and critics of the plant before deciding whether to certify the proposed project. SWEPCO wants to build the plant on almost 3,000 acres about 15 miles northeast of Texarkana by 2011. Opponents say the 1.3 billion plant near Fulton, Arkansas, would dump more pollutants in the environment and contribute to global warming. The AEP subsidiary estimates the plant would create 110 full-time jobs once it is operating, with an estimated annual payroll of $12 million. The utility is defending its choice of using coal from the Powder River basin of Wyoming and says it has properly evaluated potential costs from the plant. Earlier, a lawyer for hunters and landowners opposed to the project asked that the hearing be delayed so more environmental work can be done. The plant also needs a permit from the State Department of Environmental Quality.
Attorneys told a federal judge in Boston that they’re close to reaching a settlement in a dispute over names of some feminine products. They’re to report back September 4th over the 2006 lawsuit filed by Tyco Healthcare against Irving-based Kimberly-Clark. The suit claims Kimberly-Clark was infringing on the trademarked name “flexi-wings” used on its Always brand. Tyco healthcare is a former Tyco International unit that recently was spun off as Mansfield, Massachusetts,-based Covidien. Tyco Healthcare–now Covidien–licenses the “flexi-wings” name to Cincinnati-based Procter & Gamble, which uses it on Always brand items. Kimberly-Clark denies that the two names are “confusingly similar,” and said in court documents that “wings” is a generic term used by many sanitary pad companies.