Kerr-McGee

File:KerrMcGee logo.png

Kerr-McGee Corporation logo

The Kerr-McGee Corporation, founded in 1929, was an energy company involved in the exploration and production of oil and gas. 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 ceased to exist as an independent entity. 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 Oklahoma.

History

Kerr-McGee was initially focused mostly on off-shore oil exploration and production, being one of the first companies to use drillships in the Gulf of Mexico, 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 Resources Corp. established the base of operations in Denver, Colorado and added large resource areas throughout the Rocky Mountains.^{[citation needed]}

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.^{[citation needed]}

Locations

United States

Main oil and gas operations in the US were the Mid-Continent, Rocky Mountains, onshore Louisiana,and offshore in the Gulf of Mexico. Main offices were located in downtown Denver and the Greenspoint area of Houston.

Corporate headquarters were located in Downtown Oklahoma City. In the 1970s the company had a forest products division, and mineral mining in New Mexico, Arizona, and Idaho, and coal mining in Wyoming. Most of the U.S operations were on land owned by the U.S. government (i.e. Bureau of Land Management, National Forest) and on a Native American reservation.^{[citation needed]}

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.

Controversy

Kerr-McGee received international criticism for undertaking exploration for hydrocarbon resources offshore the Moroccan occupied area of Western Sahara in 2001. In 2003, one of Norway's main private investment funds, Skagen Vekst, sold their €3.6 million stake in the oil company, referring to ethic problems surrounding Kerr-McGee's engagement in Western Sahara. In May 2005, despite of the growing protests, the company renewed the contract signed with Moroccan authorities until October. In June 2005, the Norwegian government sold the $52.7 million it had invested in the company through the Government Petroleum Fund (one of the biggest investment funds of the world), characterizing Kerr-McGee's contract in Western Sahara as having "particularly serious violations of fundamental ethical norms". That same month, another two Norwegian private investment funds (Storebrand and KLP) sold their participations on Kerr-McGee, €1 million and €1.45 million respectively. On May 2, 2006, the company declared its intention to no longer drill off the coast of the Western Sahara, by not renewing the contract signed with Morocco.

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. 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.

The company is also at least partially responsible for large scale perchlorate contamination of land used for a manufacturing facility in Henderson, Nevada.

Environmental record

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 near 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. In July 2005, the United States Environmental Protection Agency‎ (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 by 115 tons per year, an 80% reduction from previous levels.

Nuclear production

Kerr-McGee was involved in several nuclear endeavors.

In 1952 Kerr-McGee bought the Navajo Uranium Mining Company, including an interest in a number of mines. It also bought an ore buying station at Shiprock, New Mexico. In 1953 it built a processing plant (called the Shiprock Mill) near the buying station. In 1963 the mines and mill were sold to the Vanadium Corporation of America.

Later a partnership with other companies was formed called the Kermac Nuclear Fuels Corporation. In 1957-58 this partnership built a uranium mill near Grants, New Mexico and Ambrosia Lake. In 1983 the mill was taken over by a new Kerr-McGee subsidiary called the Quivira Mining Corporation. Quivira was sold to Rio Algom in 1989.

From about 1962-1966 Kerr-McGee processed uranium at its oil refinery site in Cushing, Oklahoma. It received licenses in 1962 for processing uranium and thorium, and in 1963 for enriched uranium. In 1966 it stopped production. An attempt was made to move all regulated nuclear material to the company's new Cimarron facility at Crescent, OK. Cleanups were attempted in 1966, 1972, 1979–82, and the 1990s

In about 1965 Kerr-McGee started producing uranium fuel at its Cimarron Fuel Fabrication Site. This was located near the Cimarron River and Crescent, Oklahoma. From 1973-1975 it would also produce mixed Plutonium-Uranium Oxide (MOX) 'driver fuel pins' for use in the Fast Flux Test Facility at the Hanford Site in Washington State. The plant shut down in 1976.

In the 1968 the company started construction on what would become the Sequoyah Fuels Corporation plant in Gore, Oklahoma. In 1970 the plant started turning yellowcake uranium into uranium hexafluoride. In 1987 it began producing depleted uranium tetrafluoride using depleted uranium hexafluoride as input. In 1988 SFC was sold to General Atomics. In 1993 production ceased.

In 1967 Kerr-McGee bought the American Potash and Chemical Company, which owned the Rare Earths Facility in West Chicago, Illinois. This facility produced thorium, radium, and uranium by acid leaching of monazite sands and other ores. It stopped work in 1973.

Nuclear corporations, subsidiaries, and spinoffs

In 1956 Kerr-McGee formed the Kermac Nuclear Fuels Corporation in partnership with Anderson Development Corp, and Pacific Uranium Mines Co. It was active in New Mexico.

Some time in the 1970s, the Kerr-McGee Nuclear Corporation was formed. In 1983 it split into the Quivira Mining Corporation and Sequoyah Fuels Corporation. Quivira got the Ambrosia Lake, NM mine, while Sequoyah Fuels took over the Sequoyah plant in Gore, OK, as well as the Cimarron plant in Crescent, OK. Sequoyah was sold to General Atomics in 1988. and Quivira was sold to Rio Algom in 1989.

The Cimarron Corporation was a subdivision that took control of the Cimarron plant in 1988. When Tronox was spun off in 2006, it would get ownership of Cimarron Corporation and responsibility for the plant as well.

Kerr-McGee bought the American Potash and Chemical Company in 1967, including its Rare Earths Facility that processed uranium and thorium. AMPOT became Kerr-McGee Chemical Company around 1970 or 1974. In 2005 this became Tronox. Tronox became independent in 2006, a few months before Kerr-McGee was sold to Anadarko Petroleum. Tronox later went bankrupt, blaming in part the environmental liabilities inherited from KMC. In 2009 purchasers of Tronox filed a class action lawsuit against Anadarko for having allegedly misled investors.

Licenses

In the US, nuclear companies must get licenses from the Nuclear Regulatory Commission. Kerr-McGee licenses follow:

• SNM-928 - Cimarron - uranium fuel fabrication
• SNM-1174 - Cimarron - mixed oxide fuel (MOX) fabrication - ?-1993
• STA-583 - Rare Earths Facility
• SMB-664 - Cushing refinery - uranium and thorium. 1962-1966
• SNM-695 - Cushing refinery - enriched uranium. 1963-1966
• SNM-1999 - Cushing refinery - cleanup. 1993-2006
• SUB-1010 - Sequoyah

Karen Silkwood

It is alleged that Karen Silkwood was negligently or purposefully contaminated with plutonium while working at Kerr-McGee's Cimarron Fuel Fabrication Site 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."

The jury rendered its verdict of $505,000 in damages and $10,000,000 in punitive damages. On appeal, the judgment was reduced to $5,000. In 1984, the U.S. Supreme Court restored the original verdict (Silkwood v. Kerr-McGee Corp., 464 U.S. 283 (1984)). The suit was headed for retrial when Kerr-McGee settled out of court in 1986 for $1.38 million, admitting no liability.

References

pt:Kerr-McGee