Tuesday PM September 19th, 2006

Petrobras signs contract to acquire 50 percent of Pasadena Refinery System... Houston City Controller's performance audit contains recommendations for Greater Houston Convention and Visitors Bureau... eLinear files voluntary petition to liquidate under Chapter 7...

The president and CEO of Petrobras has officially announced the acquisition of 50 percent of the Pasadena Refinery System. The Petrobras president and CEO says it's an investment of about $360 million. Jose Gabrielli says it will develop Gulf of Mexico discoveries by deploying a Floating Production, Storage and Offloading unit—a new development concept in the Gulf but familiar to Petrobras in its operations offshore Brazil.

Petrobras president and CEO Jose Gabrielli"This is going to be very good for us. It's going to be the first FPSO—the Floating Production, Storage and Offloading unit—that we have long experience in Brazil. I think the Brazilian waters are a little bit calmer than the Gulf of Mexico, but we have a feature in this FPSO that's very interesting: that is detachable from the subsea systems in such a way that when the hurricane comes, then you can move the ship up to a safer place."

Petrobras America General Manager Renato Bertani says the Floating Production, Storage and Offloading unit, or FPSO, is appropriate because of the distances involved.

"You know, far from the existing infrastructure main pipelines. These are the conditions that render this sort of solution—an FPSO which you can move around if one project, if the reservoir does not perform accordingly, so you can move to the next phase, always adjusting for the results of the previous phase. Petrobras has more than half of the floating facilities of the world installed offshore Brazil. And so it makes it just natural that we would use that solution in this particular area of the ultra-deep waters."

The Pasadena Refinery System has a processing capacity of 100,000 barrels per day, and technical studies are underway for doubling that capacity and to enhance its ability to refine heavier crude oils.

A performance audit of the Greater Houston Convention and Visitors Bureau released by Houston City Controller Annise Parker contains nearly 40 recommendations for improved coordination, efficiency and effectiveness of bureau operations. The report stresses that the bureau is doing a good job, but there are opportunities for enhanced control over expenditures and improved relationships with other local agencies in the hotel and convention industry and increased effectiveness in bringing lucrative conventions to Houston. The audit finds shortcomings in the bureau's methodology of tracking room bookings and a lack of adequate controls over the distribution of free game tickets and parking passes to sporting events. It also finds a lack of adequate recordkeeping and internal controls over the use of free airline tickets. Bureau management says it agrees with about half of the auditors' findings.

eLinear has filed a voluntary petition to liquidate the company under Chapter 7 of the U.S. Bankruptcy Code. The Houston-based communications, security and technology compliance firm has ceased trading on the American Stock Exchange, and has closed its Texas operations, reducing its workforce to three contract employees who are helping wind down operations.

The Bayport container terminal at the Port of Houston could be delayed until the end of the year because of construction delays, according to Port of Houston Authority Executive Director Tom Kornegay. The $1.2 billion terminal was scheduled to be open earlier this year. Work on the initial phase is about 90 percent complete. Construction of berths larger than originally planned and enhancing security and communications have contributed to the delays. Construction began in June 2004.

The Port of Houston has approved a $50.3-million expansion of the container yard in the first phase of its Bayport container terminal. The new construction will expand the existing 60-acre container yard to about 110 acres in the next year.

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