Thursday PM September 6th, 2007
by: Ed Mayberry, September 6, 2007 5:09:00 am
Another potential obstacle to the private buyout of TXU has fallen. The Federal Energy Regulatory Commission has approved the deal as "consistent with the public interest.'' That leaves two hurdles for the $32 billion sale to investors led by New York-based Kohlberg Kravis Roberts and Fort Worth-based TPG Capital. One is regulatory approval by the Nuclear Regulatory Commission. But the last major obstacle may be cleared Friday when TXU shareholders vote on the deal. It's widely expected that shareholders will approve the sale of the largest power-generating company in Texas. Dallas-based TXU's largest shareholder, fund manager Franklin Resources, swung behind the deal last week after initially opposing it. Franklin's reversal was important because under Texas law, the sale needs the approval of owners holding two-thirds of TXU's stock. The only remaining public opposition to the deal comes from some consumer and environmental groups. They are pushing the buyers to make concessions such as promising lower electric rates for the next several years.
The former manager of BP's Texas City refinery told a Galveston County jury today that BP refused requests for more money to fix rusted piping and towers at the plant. Don Parus says the British oil giant rejected the requests despite a monthly profit of up to $100 million at the plant. The testimony came in the first civil trial stemming from the March 2005 explosion that killed 15 people and injured more than 170 others. Parus told the jury that the refinery was so successful that BP was essentially "printing money out there.'' But Parus, who became plant manager in June 2004, said he stopped being proud of this accomplishment after three worker deaths at the refinery the year he took over. This prompted him to look at how many deaths had occurred at the plant in the previous 30 years. Parus said he was shocked to find there had been 22--or about one every 18 months. Parus is on administrative leave from his job. The former manager said that he didn't think there was any danger before a deadly blast at the plant. Parus admits two reports he requested warned of hazards at the plant but said he would not characterize the warnings as "grave'' or "catastrophic.'' Parus says the first report three years before the blast concluded there was a major underinvestment in infrastructure at the Texas City site. The second study came just two months before the blast. It told of various safety problems at the plant and a lack of resources and management awareness to deal with them. In the report, many workers indicated they feared for their lives at the refinery. In his opening statement to jurors, BP attorney Otway Denny said plant safety was never compromised by budget cuts and BP has spent millions of dollars to fix equipment. But plaintiffs attorney Brent Coon says BP's responsible for the accident because it ignored routine maintenance, overworked employees and failed to install safer equipment. The trial could last up to two months.
Jury selection continued in a Manhattan federal court for the conspiracy trial of Houston oilman Oscar Wyatt, Jr. He's accused of offering millions of dollars in kickbacks to Iraqi officials to win lucrative oil contracts from Saddam Hussein's regime in the UN Oil-for-Food program. If convicted, the 83-year-old Wyatt could face a prison term of more than 60 years. Lawyers in the case have said opening statements could occur as early as this week. The trial is expected to take up to six weeks. Prosecutors say they'll show that Wyatt encouraged opposition to the 2003 U.S. invasion of Iraq and bragged about his influence to Iraqi officials to win oil contracts. Defense lawyers plan to portray Wyatt as a victim of a prosecution that came about after his outspoken criticism of President Bush and his administration's policies in the Middle East.
About two dozen chanting demonstrators rallied at a Laredo border crossing this morning to protest allowing Mexican trucks on U.S. highways. The Teamsters Union demonstrators consisted of both freight and delivery service drivers. They circled in the increasing heat by the World Trade Bridge, carrying signs reading "NAFTA kills'' and "Unsafe Mexican trucks.'' They chanted—"What do we want? Safe highways. When do we want them? Now!'' The Bush administration has implemented a plan to let as many as 100 registered Mexican truck carriers drive their cargo anywhere in the United States for the next year as part of a "demonstration project.'' The plan is called for by the North American Free Trade Agreement, or NAFTA. Laredo is the southern terminus of Interstate 35, which is the south is a major north-south trucking artery though the United States to the Minnesota-Canadian border. According to rally organizer Hugo Flores, "there are no means to regulate these guys.'' He says the Bush administration "has opened up highways to unsafe trucks.''
Labor Secretary Elaine Chao, visiting the Port of Houston, says good jobs have been created as a result of partnerships between labor and management at the port. Chao was in Houston to learn more about labor relations at the port. The International Longshoremen's Association says worker productivity at the new Bayport terminal has steadily improved. About two-thirds of the containers that move through the Gulf of Mexico come through Houston.
Anadarko Petroleum's chairman says five of the 15 wells beneath the world's deepest ocean production platform are yielding natural gas. And the remainder should be online by year's end. Jim Hackett made the comments in a presentation at a Lehman Brothers' energy conference in New York. The platform known as Independence Hub rests in the U.S. Gulf of Mexico, southeast of Mississippi. It began producing in July. Enterprise Products Partners is an 80 percent owner of the platform, while Helix Energy Solutions Group owns the other 20 percent. Both companies are based in Houston. Anadarko is an independent oil and gas producer based in The Woodlands. It has reserved 61 percent of hub's capacity. The remainder is controlled by Italy's Eni (20 percent), Norway's Norsk Hydro (12.5 percent) and Devon Energy (6.5 percent).