Tuesday PM February 27th, 2007
by: Ed Mayberry, February 27, 2007 5:02:00 am
Venezuela is nationalizing four oil projects run by foreign companies in the Orinoco River region with a decree signed by President Hugo Chavez. As he puts it, "the privatization of oil in Venezuela has come to an end.'' State oil company Petroleos de Venezuela will take at least a 60 percent stake in the heavy oil-upgrading operations run by six companies, including Houston-based ConocoPhillips, BP, Exxon Mobil, Chevron, France's Total and the Norwegian company Statoil. The companies have invested some $17 billion in Venezuela. The law is expected to be published shortly in the government's official gazette. Then, companies will have four months to negotiate terms and conditions with PDVSA to decide whether they will take part in new joint ventures as minority partners. Chavez says by May 1st, Venezuela will occupy the fields. He did not detail how the government will pay for its increased share in the projects. Chavez has been given special powers by Congress for 18 months to issue laws by decree in energy and other areas.
Halliburton's board approved a plan that will cut its remaining ties to KBR. Shareholders of the Houston-based oilfield services company will be allowed to exchange shares of Halliburton stock for KBR shares held by Halliburton. Once the tax-free split-off exchange is complete, the companies will operate as stand-alone firms. KBR's government contract work in Iraq has been the cause of many audits. Halliburton has defended the work for the military, working to resolve billing disputes.
Kinder Morgan is leaving the retail utility business with a $3.2 billion sale of its Canadian natural gas distribution company. The Houston-based firm is selling Vancouver, British Columbia-based Terasen to Newfoundland-based Fortis, creating Canada's largest investor-owned utility in natural gas and electric distribution. Proceeds will be used to pay down debt. Kinder Morgan is on its way to going private through a $22 billion management-led buyout. The Federal Trade Commission approved the buyout on the condition that two of the participating investment firms become passive investors in Kinder Morgan competitor Magellan Midstream Partners.
Three managers from a crate and pallet making company that employed illegal immigrants pleaded guilty today in New York to federal charges. Thirty-seven-year-old James Rice of Houston, a top executive of Ifco Systems, pleaded guilty to conspiring to employ illegal workers. Thirty-seven-year-old Dario Salvano of Amsterdam and 44-year-old Scott Dodge of Albany, New York, each pleaded guilty to one misdemeanor. Dodge was foreman at an Ifco plant in suburban Albany where Salvano was assistant general manager. Last April, more than 1,100 people were arrested on administrative immigration charges at more than 40 Ifco sites in 26 states.
The U.S. Supreme Court has ordered a lower court to reassess whether a $112 million punitive damage award against Exxon Mobil in a Louisiana land contamination case is excessive. The damages were part of a $168 million award to landowners who blamed Exxon Mobil for radioactive contamination.
The Port Commission of the Port of Houston Authority has approved $11 million in security upgrades for three terminals. The projects include installation of access control systems for the North turning Basin restricted areas and construction on the basin's restricted area entrance/exit lanes, Gate 8 at Turning Point Basin and the East Industrial park terminal access control. The commissioners also approved a sight and sound berm to be built across old Toddville Road to connect phases at the Bayport Terminal Complex Phase 1 container yard. They also approved a memorandum of agreement with the U.S. Army Corps of Engineers for maintenance dredging of non-federal berthing areas and the Barbours Cut Channel.
JetBlue says it successfully weathered its first test of the airline's Customer Bill of Rights. The discount carrier says the early cancellation of dozens of flights at Kennedy Airport in New York Monday morning ensured crews and planes were in place to resume normal operations by afternoon. Still, some customers described delays, bad communication from crew members, and general frustration Monday. Some passengers were given $100 vouchers good for any future JetBlue flight and their choice of either a refund or accommodation on a future flight. JetBlue wasn't the only airline with problems Monday. Delta and American also grounded flights because of a snowstorm in the northeast.