ConocoPhillip's chief executive James Mulva said he'll meet later this week in Houston with the chairman of the Russian oil company Lukoil. Mulva says he wants to discuss joint-venture opportunities to build on Houston-based ConocoPhillips' alliance with Lukoil. Mulva spoke with reporters on the sidelines of the annual meeting of the American Petroleum Institute in New Orleans. The API is the oil industry's main trade group. In September 2004, ConocoPhillips announced a strategic alliance with Lukoil. ConocoPhillips agreed to purchase up to 20 percent of Lukoil shares and collaborate with the Russian company on ventures both inside and outside Russia. In another subject, Mulva says the company is in ongoing talks with Venezuela regarding compensation for its investment in the heavy-oil ventures in Orinoco basin. ConocoPhillips announced that it would pull out of the ventures in June rather than accede to less beneficial commercial terms. Mulva reiterated Monday that he expects to have an agreement with Venezuela within months.
ConocoPhillips wants to know if the Roxana, Illinois, area can host about 1,500 construction workers during its refinery expansion. Houston-based ConocoPhillips has hired retired Roxana schools Superintendent James Herndon to help link workers with housing and other amenities. The planned $4 billion expansion could begin by early next year. The company, with help from Alton's Lewis and Clark Community College, plans an informational Web site for prospective workers. The startup is on hold while environmental groups challenge an air permit issued by the Illinois Environmental Protection Agency. The expansion is expected to take five to six years, attract construction workers from across the country and boost the site's processing capacity.
Three Americans are the winners of the Nobel prize for economics. Leonid Hurwicz, Eric Maskin and Roger Myerson are being honored for their work that helps explain situations in which markets work well. The Royal Swedish Academy of Sciences says the three researchers "laid the foundations of mechanism design theory.'' It says their theory allows economists, governments and businesses to "distinguish situations (that) work well from those in which they do not.'' Last year, American Edmund Phelps won the prize for explaining the relationship between inflation and unemployment, work that has had a profound impact on macroeconomics policy.
A review finds companies that produce, refine and transport oil and natural gas will need to spend as much as $21 trillion in capital expenditures by 2030. The analysis shows the funding is needed to meet the sharply growing global demand for hydrocarbons. Platts chief economist Larry Chorn says the tab for capital spending is likely to exceed $1 trillion annually in 2016 and $2 trillion in 2026. The Platts analysis found the bulk of those amounts will likely go toward exploration, development and maintenance of the crude oil supply. Chorn spoke to petroleum executives at a Standard & Poor's Conference in Houston.
The Greater Houston Partnership and UK Trade & Investment at the British Consulate in Houston hosted a day-long conference on the future of liquid fuels at the Intercontinental Hotel. Presentations focused on innovations in the production of economical biofuels. Topics included energy security, climate risk and oil and markets, as well as technology trends linking life sciences and energy.
General Motors says the new four-year contract with the United Auto Workers will transfer more than $46 billion worth of retiree health care liability to the union. The world's largest automaker says that will leave GM with more than $17 billion in retiree health care for salaried employees and other obligations. The agreement includes a company-funded, union-run trust which must be approved by federal courts.
Local union leaders have voted to recommend approval of a tentative four-year agreement with Chrysler. UAW President Ron Gettelfinger says this paves the way for a vote by union members nationwide. National bargaining committee members explained the deal to several hundred local leaders at a four-hour meeting in Detroit. Gettelfinger says there was a lot of discussion about all aspects of the deal, and union officials are happy it was "overwhelmingly recommended.'' A UAW booklet shows Chrysler workers would see gains of more than $10,000 over the life of the contract. Chrysler also would contribute more than $10 billion toward the creation of a union-run trust for retiree health care. Several union leaders say there was some disagreement over the agreement's job security provisions, which were less extensive than in GM's contract.
Ford is up next in the union negotiations. Ford CEO Alan Mulally says the main points of the UAW's deals with GM and Chrysler will help Ford become more competitive. In an interview with the Associated Press, Mulally also said he speaks often with UAW President Ron Gettelfinger, whom he considers a business partner in turning around the automaker. Ford is next in negotiations with the union. On Wednesday, the UAW ratified a historic four-year deal with GM and reached a similar agreement with Chrysler the same day. Before the deals were reached, the union went on strike against both companies. Typically the UAW uses the contract with the first company, which this year was GM, as the pattern for bargaining with the other two U.S.-based automakers.
Economic reports due this week include looks at retail inflation and new housing construction. Tuesday, the Federal Reserve releases a look at industrial production for last month, seen posting a modest increase. On Wednesday, the government reports on the Consumer Price Index, rising two-tenths of a percent in September. Housing starts are also due, expected to show a decline from the previous month. New unemployment claims and the leading economic indicators are scheduled for Thursday.