Business Briefs

Posted: Thursday, August 24, 2000

Double-hulled tanker serves Nikiski refinery

Tesoro Petroleum Co. has hired a double-hull tanker to serve its refineries in Nikiski, Anacortes, Wash., and Kapolei, Hawaii.

While the HMI Cape Lookout Shoals' inaugural voyage was a seven-day transport from Alaska to Hawaii, the tanker's typical itinerary includes moving Cook Inlet crude from the Drift River Loading Platform in lower Cook Inlet to the Tesoro Alaska Refinery at Nikiski and moving Alaska North Slope crude from Valdez to Anacortes.

The 46,000-ton HMI Cape Lookout Shoals, one of Hvide Marine Inc.'s new U.S.-flagged Lightship-class double-hull tankers, began her new charter the first week of August under a three-year contract with Gold Star Maritime, a subsidiary of Tesoro Maritime Company.

"Bringing this double-hull ship into our Alaskan operations shows our commitment to environmental safety as it replaces an older, double-bottom tanker that went off charter," said Tim Plummer, president of Tesoro Maritime.

James Carter, executive director of the Cook Inlet Regional Citizens Advisory Council, said, "Our mission is to promote environmentally safe marine transportation and oil facility operations in Cook Inlet. We consider a single-hull vessel being replaced by a double-hull vessel as a big step forward in Alaska's overall environmental protection."

Oil spill task force goes online

The public can follow deliberations of the state's Task Force on Motorized Oil Transport at www.state.ak.us/dec/nontank/ on the Internet.

The Legislature created the task force to establish oil spill prevention and response requirements for the Alaska Railroad and unregulated vessels such as cruise ships, cargo ships and large fish processors. The Alaska Department of Environmental Conservation will post information on task force meetings and deliberations at the Web site.

SBDC offers seminars

The Kenai Peninsula Small Business Development Center offers a seminar on starting small businesses today from 1 p.m. to 4 p.m. at the Kenai Peninsula Borough Economic Development District at Mile 14.5 on the Kenai Spur Highway.

The seminar will cover key topics such as choosing a form of business, necessary insurance, record keeping, marketing and finance options.

The SBDC sponsors another seminar Sept. 5 from 6 p.m. to 9 p.m. at the Seward Chamber of Commerce on organizing invoices, cash receipts, sales taxes, checking accounts and credit cards. The seminar will include organizing items for paper, money and tax year-end purposes. For information, call 283-3335.

Food services inspected

The Department of Environmental Conservation last month inspected several Kenai Peninsula food service establishments. A score of 100 reflects adherence to minimum levels of sanitation. A score of 100-90 is good, 89-85 is acceptable, 84-70 is marginal and less than 70 is unacceptable. Scores for the recent inspections were:

Seldovia Lodge bar, 98

Seldovia Lodge food service 98

American Legion bar, Seward, 95

American Legion food service, Seward, 90

Captain Jack's Espresso, Seward, 98

Fox Island Salmon Bake, Seward, 85

Gateway Texaco limited food service, Seward, 98

Oriental Gardens Restaurant, Seward, 91

Ray's Waterfront Bar, Seward, 99

Ray's Waterfront Restaurant, Seward, 92

Terry's Fish and Chowder House, Seward, 93

CIRI Elders' payments suspended

Cook Inlet Region Inc. has suspended payments under its Elders' Benefit Program pending the outcome of a lawsuit filed by shareholders Emil Notti, James Grotha, Ella Ring, Sam Pedro and Glen Kerr.

The elders' program provides for quarterly payments to original CIRI enrollees aged 65 or older. The first quarterly distribution, mailed in May, was $450. Additional distributions had been planned for August and November.

CIRI believes the program is lawful under provisions of the Alaska Native Claims Settlement Act that allow distributions on a basis other than shareholdings. The plaintiffs, some of whom have inherited shares or are under 65, say payments should be made to all shareholders based on the number of shares they own.

Until the court case is resolved, CIRI will place the payments into a separate interest-bearing account. If the lawsuit is resolved in CIRI's favor, it will distribute the money to eligible recipients and the payments will resume.

Phillips completes Arco Alaska acquisition

Phillips Petroleum Co. has completed its acquisition of Arco's businesses in Alaska.

The $965 million closing completed Aug. 1 included Phillips' acquisition of a 22.3 percent interest in the Trans-Alaska Pipeline System, interests in other infrastructure pipelines and three double-hulled tankers currently under construction. The first closing occurred April 26 and included Arco's exploration and production assets in Alaska.

The second closing brings the total cash paid and debt assumed for the acquisition to just under $6.5 billion. Including the additional payments Phillips may make to BP based on the price of crude oil, the total acquisition cost will be less than $6.9 billion.

Phillips has revised its 2000 capital budget from $1.8 billion to $2.3 billion, excluding roughly $6.5 billion for the Alaska acquisition and any payments tied to the price of crude.

Phillips earnings rise

Phillips Petroleum Co. reported second-quarter net income of $442 million, or $1.74 a share, compared with net income of $68 million, or 27 cents a share, for the same period in 1999. Total revenues were $5.4 billion, vs. $3.2 billion a year ago.

"In the second quarter, we began to realize the results of our strategy to grow our exploration and production business while positioning our other business lines for profitable growth through the creation of competitive joint ventures," said Jim Mulva, chief executive.

The acquisition of Arco Alaska Inc. doubled Phillips' worldwide reserves and increased daily crude oil production by 74 percent from the first quarter, he said.

"Production from the acquisition and strong operations in Norway, along with higher prices for crude oil and natural gas, and improved refining, marketing and transportation and chemicals performance, resulted in our operating earnings more than quadrupling, compared with the second quarter of 1999," he said.

Phillips ended the quarter with total debt of $8.1 billion and a debt-to-capital ratio of 59 percent.

"We expect to further decrease our debt and improve our debt-to-capital ratio by year-end," Mulva said.

Halibut fishery is two-thirds done

Gulf of Alaska fishers had landed nearly 12.8 million pounds of halibut from their 18.3-million-pound 2000 quota by Aug. 14. Southeast Alaska fishers had landed nearly 6.1 million pounds from an 8.4-million-pound quota, while Alaska Peninsula area fishers had landed 9.7 million pounds from a 15-million-pound quota.

Statewide landings totaled 37.8 million pounds or 67 percent of the 2000 quota of 56 million pounds. By Aug. 12 last year, Alaska fishers had taken 66 percent of the 1999 quota.

Phillips, Chevron welcome North Slope partner

Phillips Alaska Inc. and Chevron U.S.A. Inc. have announced an exploration alliance with Alberta Energy Co. Oil & Gas Inc. including more than 140,000 acres on the North Slope and Beaufort Sea.

The alliance provides for proportional ownership of seven offshore Prudhoe Bay leases totaling 28,504 acres in the proposed McCovey Unit. AEC Oil & Gas will earn a 33.3 percent interest in the leases through a farmout agreement in the initial well.

Phillips Alaska and Chevron each will hold 33.3 percent interests. Phillips is the exploration and development operator. The companies hope to drill the exploration prospect from an ice island this winter.

AEC Oil & Gas also will earn a 20 percent interest in the Grizzly Gomo prospect, which includes roughly 114,262 acres south of the Kuparuk oil field. Phillips Alaska and Chevron each will hold 40 percent interests. Exploration drilling could begin in winter 2001-02.

Humpback protections proposed

The National Marine Fisheries Service has extended the public comment period until Oct. 15 on a proposal to make it illegal to approach closer than 200 yards from a humpback whale. Text of the proposed rule is available at www.fakr.noaa.gov/prules/humpbackwhales.pdf on the Internet.

Sheldon wins Funny River king derby

Jack Sheldon won the Funny River Chamber of Commerce and Community Association King Salmon Derby with a 59.5-pound king. Second place went to Molly Noyce with a 55-pounder, third to Darren Meuer with a 52-pounder and fourth to John Michels with a 49.5-pounder.

Phillips Alaska appoints officers

Phillips Alaska Inc. president Kevin Meyer has appointed Joseph Marushack vice president, Alaska North Slope gas commercialization, completing his executive team.

Marushack is presently business services manager at Phillips' Sweeny Refinery in Texas. He brings a background in business and operations and has worked in Phillips' exploration and production division, refining, corporate treasury and the corporate planning and development group. Marushack began his Phillips career in 1982. He holds a bachelor's degree in civil engineering from the University of Wyoming and a master's in business administration from the University of Utah.

Meyer also named John Whitehead as vice president, Phillips Alaska human resources. Whitehead worked previously as senior vice president of operations for Arco International in Jakarta, Indonesia.

John R. Hennon, previously president of Phillips Puerto Rico Core Inc., has been appointed president of Polar Tankers Inc., a Phillips Alaska subsidiary.

Cross Timbers to operate Texas field

Cross Timbers Oil Co. has assumed operations of the Cornell Unit in the Wasson Field of Yoakum County.

Current daily production is approximately 1,300 (734 net) barrels of oil and 1,200 (678 net) thousand cubic feet of gas. Cross Timbers owns a 68.7655 percent (56.523 percent net) interest in the unit.

"As operator of the Cornell Unit, we plan to accelerate infill drilling, to implement waterflood optimization projects and to reduce expenses," said Steffen E. Palko, vice chairman and president."We believe there are as many as 60 potential infill locations remaining in this unit"

Permits required for use of Afognak land

A free permit is now required for family recreational activities such as berry picking, hiking and picnicking on Native corporation land on Afognak Island.

Natives of Kodiak Inc. and Ouzinkie Native Corp. now require the permits as part of a land-use policy meant to give shareholders priority use of corporation lands while still allowing controlled recreational access for the general public.

Anyone using the corporations' Afognak lands for hunting, fishing or recreation must obtain an annual land-use permit. Fees vary depending on the activity. However, there is no charge for permits authorizing noncommercial family recreational use.

For information, call Ouzinkie Native Corp. at 680-2208 or Natives of Kodiak Inc. at 486-3606.

Tesoro declares dividend

Tesoro Petroleum Corp. has declared a quarterly dividend on its 7.25 percent mandatorily convertible preferred stock, payable to each holder of Premium Income Equity Securities, each representing 1/100 of a share of preferred stock.

A dividend of $.288875 per PIES will be paid Oct. 1 to holders of record of preferred stock Sept. 15.



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