Venezuela's state oil company is selling its share in a Houston-area refinery, and will demand new terms to supply crude oil for its owner. After two years of negotiations, Venezuela's oil minister says the state oil company has agreed to sell its 41 percent share in the Lyondell-Citgo oil refinery to majority owner Lyondell Chemical. Oil Minister Rafael Ramirez says Citgo Petroleum, based in Houston and owned by the Venezuelan state oil company, is selling the stake to Houston-based Lyondell for about $1.3 billion. Ramirez said Venezuela's supply contract ends with the sale, but that it will continue to supply crude to the Lyondell refinery under new terms in a five-year supply contract. He says the previous 25-year supply contract included discounts and wasn't a good deal for the Venezuelan government. Venezuelan President Hugo Chavez has complained that the Citgo refineries have been buying Venezuelan oil at a discount, then paying taxes in the United States. The 700-acre plant has a refining capacity of about 268,000 barrels a day, employing about 875 workers.
The University of Texas Medical Branch is constructing a new medical specialty center in north Galveston County at I-45 and FM 646 between Dickinson and League City. The UT System Board of Regents approved $30.5 million for the new facility. The UTMC Specialty Care Center at Victory Lakes will offer educational opportunities for the university's medical, nursing and allied health students, as well as for clinical research. The center is slated to open in December 2007.
Analysts say a joint compensation claim against the British Airports Authority for losses sustained during the recent terrorist alert could run as high as $570 million. British Airways is leading a campaign against BAA, which operates seven airports around Britain, including London's Heathrow, Stansted and Gatwick. Airlines say BAA was slow in responding when the government imposed strict security checks on all passengers and a ban on onboard baggage last week.
A Tempe, Arizona company says it has most of its financing and regulatory approvals lined up for a fuel pipeline it wants to build through Arizona. Pacific and Texas Pipeline and Transportation Company says it's started accepting contracts from customers who want to ship gasoline and other fuels through the planned pipeline. That line would run from El Paso to Phoenix and Las Vegas. The company says the 425-mile pipeline could be under construction by year's end and finished in early 2009. Arizona currently gets all of its gasoline pumped into the state through two pipelines--one from Texas and the other from southern California. They're owned and operated by Houston-based pipeline company Kinder Morgan.
Houston-based pipeline operator Kinder Morgan is selling its Colorado-based retail natural gas distribution business to GE Energy Financial Services. The price is $710 million. The Lakewood, Colorado-based business Kinder Morgan is selling has 260,000 customers in Colorado, Nebraska, Wyoming and Hermosillo, Mexico. The deal is expected to close in the first quarter of 2007. The operation will get a new name, which has not been chosen.
Enterprise Products Partners subsidiary Mid-America Pipeline has signed new long-term transportation agreements will all but one of its current shippers on its Rocky Mountain Pipeline System, according to the Houston Business Journal. The products will go to Enterprise's Hobbs fractionator near the Texas/New Mexico border or to its Mont Belvieu fractionator. The Rocky Mountain region has seen an explosion of drilling and production activity, primarily for natural gas.
Cooper Industries said today that it's acquired privately held Cannon Technologies for an undisclosed sum. Minneapolis-based Cannon provides meter-reading systems to more than 400 North American power utilities. It will operate as part of Cooper Power Systems Unit. Houston-based Cooper says the acquisition is expected to lower earnings slightly in the first 12 months of the acquisition. Cooper Industries makes electrical products, tools, hardware and metal-support products. It says it expects Cannon to generate more than $55 million in revenue this fiscal year. Cooper Industries had 2005 revenue of $4.73 billion. It says Cooper Power Systems accounted for about $900 million of that revenue.
Although job-cut announcements fell to a six-year low last month, it may be just a brief respite before the downsizing season begins. According to Challenger, Gray and Christmas, Labor Day kicks off what is typically the heaviest downsizing period of the year. The global outplacement firm, which tracks job-cut announcements, says the last four months of the year have had the most job cuts in six out of the past ten years. Challenger, Gray and Christmas says the end of the year is a dangerous time for workers as companies are making decisions about the coming year's budget, expansion plans and other factors that help determine staffing levels. The company offers several tips for workers to make themselves less vulnerable to being sacked. They include staying visible, being a team player and letting your supervisor know about your accomplishments.
Ford plans to trim the number of dealerships it has in 18 metropolitan areas in an effort to improve dealer profitability. The nation's number two automaker blames falling car and truck sales for the decision. While the company says most of the metro areas concerned are east of the Mississippi, it would not identify exactly what markets it'll target. Dealers got the word at the company's annual dealership meetings last week in Las Vegas. Ford has about 4,300 Ford and Lincoln-Mercury dealerships nationwide, and dealer profits have fallen an average of ten percent in the first half of the year. Its market share has dropped from around 26 percent in the early 1990s to 17 percent at the end of July.
Louisiana Governor Kathleen Blanco has suffered a setback in her efforts to bolster state coffers. A federal judge turned down the governor's request to block the sale of federal offshore oil and gas leases. Blanco has demanded that Louisiana receive a larger share of the royalties to help the state recover from Hurricane Katrina. She filed a lawsuit to block Wednesday's planned sale, claiming the federal government has not done enough to protect Louisiana's wetlands from damage caused by the drilling. The judge says the state will have a strong case when the dispute goes to trial in November. But he says allowing the sale now won't harm it. The state currently receives less than two percent of the royalties generated by oil and natural gas production.