Kerr-McGee


Kerr-McGee

The Kerr-McGee Corporation was an energy company involved in the exploration and production of oil and gas resources. The company, founded in 1929, had about 1.4 billion U.S. dollars in assets as of March 31, 2006.Fact|date=May 2008

On June 23, 2006, Houston-based Anadarko Petroleum Corporation agreed to acquire Kerr-McGee in an all-cash transaction totaling $16.5 billion plus the assumption of $2.6 billion in debt. Kerr-McGee shareholders voted to approve the offer on August 10, 2006 and Kerr-McGee immediately ceased to exist as an independent entity. Many aspects of company procedure and policy (such as healthcare and benefits) will be retained until late 2006/early 2007. As a result of the takeover, all operations (with the exception of Tronox which was spun off as a separate company in 2005) moved out of the State of Oklahoma, where Kerr-McGee employed approximately 200 people at its Oklahoma City headquarters.Fact|date=May 2008

History

Kerr-McGee was initially focused in mostly off-shore oil exploration and production, being one of the first companies to use drillships in the Gulf of Mexico,cite news |title=Kerr-McGee Natural Gas STAR Case Study Series|url=http://www.epa.gov/gasstar/pdf/kerrmcgee.pdf |publisher=United States Environmental Protection Agency" |format=PDF] and later one of the first companies to use a Spar type platform in the area. With the acquisition of the Oryx Energy Company of Dallas, Texas in 1999, Kerr-McGee gained more onshore assets, as well as significant assets in several foreign areas, most notably Algeria and western Kazakhstan. Later acquisitions of HS Resources and Westport Energy established the base of operations in Denver, Colorado and added large resource areas throughout the Rocky Mountains.Fact|date=May 2008

Until 2005, Kerr-McGee had two major divisions: chemical and oil-related. On November 21, 2005, the chemical division of the company, based in Oklahoma City, was sold off by IPO as Tronox, thereby making Oklahoma City home to the administrative side of Kerr-McGee, while all exploration and production management was located in Denver and Houston.Fact|date=May 2008

Locations

United States

Main operations centers in the US were the Rocky Mountains and the Gulf of Mexico region. Main offices were located in downtown Denver and the Greenspoint area of Houston.

Corporate headquarters were located in Downtown Oklahoma City.

Mainland China

Kerr-McGee had exploration, development, and production projects in Bohai Bay, China, near Beijing. Additional exploration was planned for the South China Sea. These operations were run primarily from an office in Beijing.

Other locations

Kerr-McGee and its subsidiaries formerly operated in western Kazakhstan, western Australia,Brazil, Trinidad, Benin, the United Kingdom and several other more minor locations around the world at various times. The holdings varied as part of a continuing process of expansion and then re-focus on domestic rather than international exploration.Fact|date=May 2008

Controversy

Kerr-McGee sued the Bush administration in a case to enforce a royalty relief program granted during the 1990s for deep well natural gas and oil exploration in the Gulf of Mexico.Fact|date=May 2008

Kerr-McGee has since 2001 received international criticism for undertaking exploration for hydrocarbon resources offshore the Moroccan occupied area of Western Sahara. Some shareholders have sold out of the company in protest. In June 2005, the Norwegian government sold its $52.7 million shares in the company, characterizing Kerr-McGee's contract in Western Sahara as 'a particularly serious violation of fundamental ethical norms'. On May 2, 2006, the company declared its intention to no longer drill off the coast of the Sahara.Fact|date=May 2008

In January 2007 Kerr-McGee was found guilty by a jury of underpaying oil extraction royalty taxes in the amount of US$7.6 million to the U.S. Government. [ [http://www.pbs.org/now/shows/319/index.html The Royalty Treatment . NOW | PBS ] ] The jury's decision was overturned by U.S. federal judge Phillip Figa of Denver, and the case has been appealed by the original plaintiff, former U.S. Department of the Interior auditor Bobby Maxwell.

Environmental record

The Kerr-McGee Corporation was ranked 30th on the 2003 Political Economy Research Institute's (PERI) Toxic 100. The company was responsible for 840,000 pounds of toxic emissions in 2002. [ [http://www.peri.umass.edu/Toxic-100-Table.265.0.html PERI - Political Economy Research Institute: Toxic 100 list ] ] In May 2007, Kerr-McGee Corp spent $18 million on pollution controls in the first comprehensive settlement under the Clean Air Act that reduced harmful emission and conserved natural gas at production facilities across Utah and Colorado. The settlement addressed violations discovered at several of Kerr-McGee's natural gas compressor stations located on the Uinta and Ouray Indian Reservation bear Vernal, Utah, and in the Denver Julesburg Basin near Weld County, Colorado. In addition to implementing pollution controls, the agreement required Kerr-McGee to pay a $200,000 penalty, and spend $250,000 on environmental projects to benefit the areas in which violations occurred. [ [http://yosemite.epa.gov/opa/admpress.nsf/2467feca60368729852573590040443d/0ff61e4e98efe594852572de0069cfcc!OpenDocument Kerr-McGee Reaches Major Settlement on Natural Gas Production in Colorado and Utah | Newsroom | US EPA ] ] In July 2005, the United States EPA settled with Kerr McGee Chemical in Henderson, Nevada that required the company to pay $55,392 penalty to resolve air permitting violations at its facility that began in 1993. The EPA cited Kerr-McGee for failing to install carbon monoxide emissions controls required under the Clean Air Act when it installed a new open hearth furnace in 1993. The company spent $4.8 million to install proper pollution controls at the facility reducing total carbon monoxide emission 115 tons per year, an 80% reduction from previous levels. [ [http://yosemite.epa.gov/opa/admpress.nsf/2dd7f669225439b78525735900400c31/9e805fced84fff32852570d8005e1779!OpenDocument U.S. EPA settles air pollution case with Kerr-McGee in Henderson, Nev. | Newsroom | US EPA ] ]

Karen Silkwood

It is believed that Karen Silkwood was negligently or purposefully contaminated with plutonium, while working at a Kerr-McGee nuclear plant and investigating safety violations at the plant. Her activism and November 1974 death were the subject of the 1983 film "Silkwood". In a civil suit against Kerr-McGee by the Estate of Karen Silkwood, Judge Frank Theis told the jury, "If you find that the damage to the person or property of Karen Silkwood resulted from the operation of this plant, Kerr-McGee is liable."Rashke, Richard L. "The Killing of Karen Silkwood: The Story Behind the Kerr-McGee Plutonium Case." 2d ed. Ithaca, N.Y.: Cornell University Press, 2000. ISBN 080148667X]

The jury rendered its verdict of US$505,000 in damages and US$10,000,000 in punitive damages. On appeal, the judgment was reduced to US$5,000. ["Silkwood Award Is Reversed." "Associated Press." December 12, 1981.] In 1984, the U.S. Supreme Court restored the original verdict ("Silkwood v. Kerr-McGee Corp.," 464 U.S. 283 (1984)). ["High Court Clears Award in Karen Silkwood Case." "New York Times." January 12, 1984.] The suit was headed for retrial when Kerr-McGee settled out of court in 1986 for $1.38 million, admitting no liability. ["Business Digest." "New York Times." August 23, 1986.]

Trivia

The former Conservative politician Michael Portillo worked for Kerr-McGee between 1981 and 1983. He returned to the company as an adviser having lost his parliamentary seat in 1997.

References


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