Thursday AM September 6th, 2007
by: Ed Mayberry, September 6, 2007 5:09:00 am
Jury selection has been underway in the trial of Houston oilman Oscar Wyatt, Jr., in New York, charged with funneling millions of dollars in illegal kickbacks to Iraq to purchase oil under the United Nation's Oil-for-Food program. The 83-year-old is charged with fraud, conspiracy and violating U.S. sanctions laws restricting dealings with the former Iraqi government. Payment of any surcharges was a violation of U.S. law and UN rules governing the program. He faces up to 74 years in prison if convicted. Wyatt contends all his dealings were legal. He founded Houston's Coastal Corporation, now owned by El Paso Corporation.
A Galveston County jury listened as attorneys laid out their cases in the trial of several lawsuits from a deadly 2005 BP Texas City refinery explosion. Plaintiffs' attorney Brent Coon told jurors that the explosion that killed 15 people resulted from unsafe working conditions caused by the British oil giant's appetite for profits. Coon says BP ignored routine maintenance, overworked employees and failed to install safer equipment. Lawyers for BP told the Galveston County jury that the company didn't knowingly put workers at risk. Attorney Otway Denny says BP takes responsibility for the refinery explosion. But he emphasized the company always tried to provide a safe working environment. The trial resumes this morning.
Brazos Electric Power Cooperative has agreed to buy more than 40 percent of the power generated at a proposed central Texas coal-fired plant. Officials say the deal will enable developers to break ground on the project later this year. The Waco-based electric co-op says that it plans to purchase 375 megawatts of power from Dynegy's Sandy Creek energy station. The 900-megawatt plant will be built near Riesel, 15 miles southeast of Waco. It's scheduled to open in 2012. Environmental groups, including some neighbors of the proposed site, say the plant is unnecessary and will be an environmental mess. Brazos Electric Executive Vice President Clifton Karnei says the plant will diversify the co-op's fuel sources and help meet its members' demand for power. Brazos Electric serves 16 member distribution cooperatives and two municipal customers, which include more than 460,000 customers in 68 Texas counties.
The number of job cuts announced by U.S. corporations in August rose by a whopping 85 percent from the prior month to more than 79,000. That's according to a survey released by the outplacement firm Challenger, Gray and Christmas. Challenger says job cut announcements so far this year totaled nearly 516,000. That's 4 percent fewer than the first eight months of last year. The mortgage and sub-prime lending crisis is taking a toll. Challenger says the financial industry announced more than 35,000 job cuts last month, the most for any industry.
Non-farm private sector employment increased by 38,000 in August, according to the ADP Employer Services National Employment Report, as reported by the Houston Business Journal. But that's the smallest increase since June 2003. The survey, based on payroll data, also found that employment in the service providing sector grew by 87,000 jobs, while employment in the goods-producing sector declined by 49,000 jobs.
Wood Mackenzie identifies 594 deepwater blocks which may be included in the 2007 Gulf of Mexico lease sales—double the annual average number of leases offered between 1997 and 2006. The Edinburgh-based consultant forecasts that 2007 may reach $1 billion—a high not seen in the region for a decade. But higher bid totals and more leased acreage will not necessarily lead to a proportional increase in exploration and production.
An Environmental Protection Agency panel hosted a public hearing in Houston to discuss proposed ozone standards. The Texas Association of Manufacturers says the new standard needlessly threatens jobs, and the current standard is generating dramatic air quality improvements. The group says the current ozone standard will cut power plant emissions in half by 2015 and vehicle emissions by 70 percent by 2030, even as the economy grows.
Phoenix-based Opus West plans two office buildings in west Houston in the Energy Corridor, according to the Houston Business Journal. Energy Crossing I and II, on a 17-acre tract at Interstate 10 and Highway 6, will each have roughly 230,000 square feet. Construction is expected to begin by year-end on a speculative basis, and Phase 1 is projected to finish in the fourth quarter of 2008.
Swift Energy has agreed to buy three South Texas oil and natural gas properties from Escondido Resources for $245 million, according to the Houston Business Journal. The property is in La Salle, Dimmit and Webb Counties.
Noble Corporation has taken delivery of a new high-specification jack-up drilling rig constructed in China. The "Noble Roger Lewis" is the first of three such rigs being built for Noble. The unit is in transit to its inaugural assignment in Qatar, where it is contracted to Shell.
The Federal Reserve says the credit crunch is taking its worst toll on the hurting housing market, but its impact on the rest of the national economy so far seems limited. The Beige Book Survey, assessing business conditions around the country, is being mined for clues about what the central bank will do at its next meeting on September 18th. A growing number of economists believe the Fed will lower a key interest rate now at 5.25 percent by at least one-quarter percentage point at that time to protect the economy from any ill effects of the credit crisis. The Fed hasn't lowered this rate in four years.
The European Central Bank says volatility in the money markets has increased and it is prepared to "act accordingly,'' a sign that it could lower its benchmark interest rate. The bank did not explain why it issued the statement, a surprise that caught markets off guard on the eve of a meeting at which its top policymakers are expected to review rates. A few weeks ago, analysts said the bank could raise its benchmark rate from four percent but that view had changed more recently with most betting it would hold rates steady. The ECB, which sets monetary policy for the 13 countries that use the Euro, said it may take action at Thursday's meeting of its governing council to "contribute to orderly conditions.''
Flotek Industries has acquired Oklahoma-based Sooner Energy Services for $7.1 million, according to the Houston Business Journal. The company will join Flotek's chemical division.
GreenHunter Biofuels will begin commercial operation of its methanol distillation by September 10th, according to the Houston Business Journal. The subsidiary of Grapevine-based GreenHunter Energy received approval for the distillation process earlier this year from the Texas Commission of Environmental Quality. The firm plans to receive products at its Houston Ship Channel location by truck, rail or barge, and then ship the finished product.
Mattel has announced its third major recall of Chinese-made toys in a little more than a month. The recall is the latest blow to the world's largest toy maker as the critical holiday shopping season approaches. Mattel says the action involves a total of more than 800,000 units, including 675,000 Barbie doll accessories, because of excessive amounts of lead-tainted paint. The recall also covers 90,000 units of Mattel's Geotrax Locomotive line and 8,900 Big Big World 6-in-1 bongo band toys, both from the company's Fisher-Price brand. The Big Big World products were sold nationwide from July through August of this year, while the Geotrax toys were sold from September 2006 through August of this year. The recalled Barbie accessories were sold between October 2006 and August of this year. No Barbie dolls were included in the action. The details of the recall were negotiated by the Consumer Product Safety Commission. For information about Tuesday's recalls, consumers should call Mattel at 888-496-8330 or visit the company's Web site.
Congress has approved a makeover for the Sacagawea dollar. Lawmakers hope to encourage consumer and business use of the gold-colored coin. Under legislation passed by voice vote in the House and sent to President Bush for his signature, new editions of the coin honoring the woman who helped Lewis and Clark will be circulated in 2009. The new coins will continue to depict Sacagawea and her child, but they will feature scenes on the reverse side, changed annually, commemorating the achievements of other Native Americans and Indian tribes. The Sacagawea dollar was first minted in 2000 to replace the Susan B. Anthony dollar coin. But like its predecessor, it failed to win widespread public acceptance. The one-Euro coin and British one-pound coin have been used instead of paper equivalents for years.
Transatlantic flights contributed a 10.9 percent increase in overall international flights for Continental Airlines, with domestic flights rising by 8.7 percent. Regional flights dipped by 4.9 percent in the company's latest report. The Houston-based air carrier says its August traffic rose 8.1 percent as capacity rose 4.4 percent. Continental's occupancy rose to 85.3 percent from 82.4 percent.
An analyst who follows Omaha, Nebraska-based Berkshire Hathaway is surprised by how much railroad stock Warren Buffett's investment company is buying. Andy Kilpatrick says Buffett's company seems to be making a real aggressive move on Burlington Northern Santa Fe. Berkshire Hathaway has revealed that it may buy as much as 25 percent of the Fort Worth-based railroad's stock. Documents filed with the Securities and Exchange Commission reveal that Berkshire Hathaway plans to invest nearly $600 million in Burlington Northern, which is the nation's second-largest railroad. Berkshire Hathaway already owns 15 percent of the Texas-based railroad. Federal regulators will examine the proposed purchase to determine if it would violate antitrust regulations.