News

Thursday September 29th, 2005

Oil companies continue offshore platform and rig damage assessment…Governor Perry authorizes public utility companies to restore power faster by laying temporary electric transmission lines…Stewart & Stevenson sells Engineered Products Division in $60 million deal… Officials say 13 drilling rigs have been seriously damaged or destroyed by Hurricane Rita, which blasted ashore last Saturday near Sabine […]

Oil companies continue offshore platform and rig damage assessment…Governor Perry authorizes public utility companies to restore power faster by laying temporary electric transmission lines…Stewart & Stevenson sells Engineered Products Division in $60 million deal…

Officials say 13 drilling rigs have been seriously damaged or destroyed by Hurricane Rita, which blasted ashore last Saturday near Sabine Pass. Analysts say production platform damage is still being assessed. The Association of Oil Pipelines reports nine of 12 lines that move gas and oil onshore remain shut down or operating at less than 100 percent capacity. Refineries in the hardest-hit area of Beaumont and Port Arthur, plus Lake Charles, Louisiana are still shut down. When Hurricane Rita veered north and east to spare much of the onshore energy infrastructure along the Houston Ship Channel, it slammed through a prolific oil and natural gas production area in the Gulf. The Energy Department says that’s costing about 1.7 million barrels per day of refined products. About 80 percent of normal natural gas production is shut in.

Chevron is investigating the capsizing of its Typhoon tension-leg production platform, which toppled during Hurricane Rita and drifted 70 miles. Tugboats have secured the upside-down platform, according to the Houston Chronicle, which was co-owned with BHP Billiton. The Ocean Saratoga and Ocean Star drilling rigs owned by Diamond Offshore Drilling broke from their moorings and went aground miles from their original locations. Two GlobalSantaFe jack-up drilling rigs have been found 80 miles from their sites with severe damage. Four Noble semi-submersible rigs broke from their moorings and moved from 75 to 123 miles. Two Rowan Companies rigs are not in their pre-storm locations, and another is aground off Louisiana. A fourth rig has not yet been located.

The Minerals Management Service has granted an extension to oil and gas producers impacted by Hurricanes Katrina and Rita for royalties reporting and payment, according to the Houston Business Journal. The MMS Gulf of Mexico Regional Office in New Orleans–the primary office responsible for developing procedures–has been closed since Katrina hit on August 29th.


The Shell Deer Park refinery and chemical plant has begun the start-up phase of their operations. The restart period will extend into next week as equipment, systems and processes become fully operable and production increases toward normal operating rates, according to the company’s Darci Sinclair.


Governor Rick Perry has issued an emergency proclamation authorizing public utility companies to speed relief and recovery efforts by laying temporary electric transmission lines. Public utilities can enter public and private property to install temporary lines to restore power lost after Hurricane Rita, removing the lengthy easement acquisition process. CenterPoint Energy has agreed to connect its lines to the Entergy grid, and TXU will assist with manpower. As of early Thursday afternoon, 332,746 homes and business in Texas were still without electrical power.

Two of four Strategic Petroleum Reserve storage sites in Texas and Louisiana could be without electricity for up to ten days because of Hurricane Rita, according to the Energy Department. The Bush administration has said it will make crude oil from the underground salt caverns available to refineries, if needed, to replace oil supplies disrupted by the two recent hurricanes.


The Houston FEMA Disaster Relief Center is promising to do better and keep longer hours after being swamped for a time by aid seekers. Officials closed the center early after being caught off guard by the 1,500 or so people who showed up for help. Some of those in line began fainting in triple-digit heat. FEMA now says the center will operate seven days a week and stay open longer into the evening. An agency spokesman says plans are being made to deal with any similar situation. The center had to be closed last week when the city was evacuated in advance of Hurricane Rita. FEMA’s response to Rita and Hurricane Katrina before it continues to get hostile reviews.


The George R. Brown Convention Center gets back to its core business of hosting events this weekend. A business meeting for Trinity Motivational has a two-day event beginning October 1st, and the Invensys Process Systems Customer Conference moves in this weekend for a meeting next week. Throughout their emergency shelter operations for hurricane evacuees, the convention center continued booking events as usual.


Legislation to end a ban on energy development along most U. S. coasts and open an Alaskan wildlife refuge to drilling has advanced in the U. S. House. Opponents say Republican leaders are exploiting the aftermath of Hurricanes Katrina and Rita to pass pro-industry measures. Since 1981, oil and gas development has been off limits in all the coastal waters outside the central and western Gulf of Mexico–amid environmental and tourism concerns. Meanwhile, the House Energy and Commerce Committee tried to find ways to spur the construction and expansion of refineries. Texas Congressman Joe Barton, who chairs the panel, says more refineries will result in more domestic production of gasoline. Barton’s plan included easing air pollution control rules on refineries and shortening deadlines for issuing permits.


Business has picked up at data recovery services, insurance brokers and loss prevention consultancies since two hurricanes hit the Gulf Coast. Analysts say images of flooded and destroyed companies made many small business owners uneasy about their own disaster preparedness. Vericenter is a Houston-based information technology firm with seven data backup centers around the U. S. Co-founder Dave Colesante says Vericenter has seen an uptick in business. He’s found that many customers have been motivated to start tapping into money that was set aside for disaster preparation–but that went unused until now. Colesante says many of those companies were interested in looking, but hadn’t actually purchased. He says Katrina caused a lot of people to actually engage and force their IT staff to make the leap into the disaster recovery world.


East Texas cotton producers who feared the worst from Hurricane Rita came through the storm unscathed. That’s after the storm veered east of their fields. But rice and soybean growers weren’t as lucky. Damage to rice and soybean crops wasn’t substantial, but state agriculture officials say losses will diminish profit margins. Liberty County ag officials say about 15 percent of the East Texas ratoon rice crop in was destroyed by the hurricane. That’s the rice growth that comes after a first crop is harvested. Soybean growers lost as much as 12 percent of their crop. Both rice and soybean growers could see their financial losses worsened by lower prices. Animal health officials said they have had no reports of large livestock losses.


A preliminary inspection of the Isle of Capri Casinos-Lake Charles indicates that both casino vessels appear to have weathered the storm. The Isle reports that both the hotels and pavilion area sustained only minimal damage.


Stewart & Stevenson is selling an oil well servicing unit to Houston-based oil industry executive Hushang Ansary for $60 million. The sale of the company’s Engineered Products Division will be completed by November. Stewart & Stevenson sold is airline products unit earlier this year for $60 million.


Imperial Sugar this week closed the sale of its Holly Sugar subsidiary to Southern Minnesota Beet Sugar Cooperative for $51.1 million. Holly Sugar’s operations include two beet sugar factories and a distribution facility in California, and a beet see processor and seller in Wyoming. The company primarily serves industrial and food-service customers.


Fort Bend County has the second-highest median household income in the nation, according to the Council for Community and Economic Research, as reported by the Houston Business Journal. When adjusted for the cost of living, the county ranks second only to Maryland’s Howard County in 2004 household income. Fort Bend’s adjusted household income is $74,782, according to the Virginia-based research council.


Texas and North Carolina have the most favorable business climates in the United States, according to a survey by Development Counselors International, as reported in the Houston Business Journal. The survey of 207 senior-level corporate executives and the site selection consultants who advise them credits Texas with a favorable tax climate, business-friendly attitude and low cost of business.


Continental Airlines is starting daily non-stop flights between New York and Copenhagen, Denmark beginning May 23rd, 2006. Copenhagen will become the 27th city in Continental’s trans-Atlantic route network–it’s third Scandinavian destination.


The Pentagon has given the go-ahead to begin full production of the V-22 Osprey. The Marine Corps considers the hybrid helicopter-airplane vital to the future of its air fleet. But the Osprey program has been threatened since 23 Marines died in a pair of crashes during testing in 2000. The tilt-rotor aircraft can land and take off like a helicopter and fly like an airplane. Commanders say the Osprey can haul more troops and equipment farther than existing helicopters. A joint venture of Boeing and Textron’s Bell Helicopter unit builds the aircraft in Texas and Pennsylvania. U. S. Senator John Cornyn says full-rate production clears the way for a more efficient and lower-cost delivery of this next-generation military aircraft.


Dell has refreshed the company’s XPS line of computers for gamers and other demanding users. Round Rock-based Dell is emphasizing its commitment to the high end of the PC market. The XPS 200, 400, and 600 desktop PC’s start at $1,099. That’s nearly three times as much as Dell’s cheapest PC. A maxed-out XPS can easily top $6,000. The XPS M-170 laptop computer starts at just under $2,700. The line comes standard with 17-inch LCD monitors, Windows Media Center software and one-year warranties–as opposed to the 90-day warranty on the cheaper dimension line. XPS customers also have their own dedicated technical support telephone and chat lines. Also today, Dell launched its first 50-inch plasma television, which sells for nearly $3,800.


Basic Energy Services has raised the estimated valuation of its pending initial public offering to $287.5 million. That’s almost $29 million above the initial estimates–according to an amended filing with the Securities and Exchange Commission. Basic Energy Services is a midland-based provider of oil and gas well-site services. The company says it plans to use $70 million of the net proceeds to repay a part of a term loan, buy shares from ten officers at the IPO price and use as working capital. The company hasn’t provided details about the number of shares to be offered or an estimated price range for the IPO. Some of the shares will be offered by shareholders, one of which is an affiliate of Credit Suisse First Boston and owns most of the company.


The Susan G. Komen Breast Cancer Foundation Houston Race for the Cure has been moved, due to hurricane relief efforts. Marathon Oil is sponsoring the race’s 15th birthday at a new race location starting on Bagby near Clay and finishing at Sam Houston Park on October 1st. The event expects to draw some 28,000 runners. Marathon Oil became involved in support of two employees who are both breast cancer survivors.

Fairway Medical Technologies has been awarded $2.9 million by the National Institutes of Health-National Cancer Institute to fund the development of technology for early detection of breast cancer. Houston-based Fairway will use the funds to develop an imaging system that can detect tumors five times smaller than most malignant breast tumors that can currently be detected.

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