Wednesday PM May 7th, 2008
by: Ed Mayberry, May 7, 2008 4:05:00 pm
The Offshore Technology Conference at Reliant Park is a chance for governments to whip up oil company interest in their backyards. Malcolm Wicks is the UK Minister of State for Energy.
"Where the North Sea is now, it's, you know it's, it's past its prime, I guess, that's the honest answer. It has peaked. But there's still a huge amount of resource there in the North Sea—the equivalent of 25 billion barrels of oil. So there's an awful lot to exploit there. And what we're seeing now is that, yes, some of the larger companies may be putting more of their priority, the investment priority, elsewhere in the world. But that means there's a lot of scope now and a lot of space for some smaller, medium-sized companies—some British, some foreign-owned because Britain believes in globalization, we believe in free trade—and we've always had a number of international companies operating in Britain. We have a licensing system in the North Sea which is on the side of the entrepreneur; it's on the side of enterprise. We don't let a company, a big company, keep a license if it's not exploiting the resource. They will lose that license and we'll give it to a hungrier competitor—often a smaller competitor. So it's a great arena—the North Sea in Britain—for enterprise and entrepreneurship. And that's to the benefit of British companies, but it's to the benefit of overseas companies. as well."
Wick, who's a member of Parliament, has been meeting with Houston oil executives and participating in a number of functions at OTC. The conference concludes tomorrow with more technical sessions on alternative energy, LNG and improving energy policy through better dialogue between consumers and the energy industry.
KBR's proposed $550 million acquisition of an Alabama engineering and construction firm is further evidence of its drive to expand in industrial construction. Details came from the top executive of the Houston-based military and engineering contractor. KBR, well known for its role as the Pentagon's biggest private contractor in Iraq, this week announced it will buy privately held BE&K of Birmingham, Alabama. KBR Chairman Bill Utt says the acquisition, which needs regulatory approval, will help the company fill out its offerings to industrial customers. BE&K posted $2 billion in revenue last year. It has both domestic and international clients and employs about 9,000 people. KBR has more than 50,000 employees.
The U.S. finance arm of automaker Daimler will move 60 jobs from California and New Jersey to its Fort Worth office. Authorities announced the move is expected by early 2009. Daimler Financial Services Americas says the consolidation of customer service and collections operations will reduce costs for the maker of Mercedes vehicles. The company had already planned to move about 100 employees from its truck-finance unit in Illinois to Fort Worth later this year. When both moves are complete, the office in Fort Worth's AllianceTexas Industrial Park will have about 710 workers.
Treasury Secretary Henry Paulson says the worst of the credit crisis may have passed. But he acknowledges that rising gas prices, will blunt the effect of economic stimulus checks to 130 million taxpayers. In an interview with the Associated Press on Wednesday, Paulson rules out a second stimulus package for now. He says the turmoil that has gripped Wall Street has now eased somewhat. Paulson says he thinks "we're closer to the end of this than the beginning."
A new company that makes Dr Pepper and Snapple made its Wall Street debut. Trading has begun in Dr Pepper Snapple Group Incorporated after the Plano-based beverage group was spun off from former owner Cadbury Schweppes. Dr Pepper Snapple is listed on the New York Stock Exchange as DPS. It had 5.7 billion in sales last year while part of the British confectioner. It bottles soft drinks, tea, water and other beverages under such brands as Dr Pepper, 7Up, Canada Dry, Schweppes, Mott's, Sunkist and RC Cola. Cadbury spun off the beverages division to focus on its core candy business. Last month, a Lehman Brothers analyst said the beverages company will face many challenges, including high commodity costs and competition from Coca-Cola and Pepsico, which have much larger market shares.
The American newspaper columnist Franklin P. Adams once said, "what this country needs is a good five-cent nickel." He wasn't kidding. If you think times are tough, consider: it now costs more than a penny to make a penny, which is made of zinc and copper. And the cost of a nickel is more than 7.5 cents. Surging prices for copper, zinc and nickel have Congress trying to bring back the steel-made pennies of World War II, and maybe using steel for nickels, as well. The House is moving toward a vote on a measure that would direct the Secretary of the Treasury to suggest a new, more economical composition of the nickel and the penny. The Treasury Department opposes the bill as "too prescriptive."