Tulsa loses another oil corporation

[mranderson]

Sun Oil announced they are moving their headquarters from Tulsa to Houston. This will cost Tulsa 100 jobs. The move could come by January 2006.

Franlky, I am tired of Texas gaining OUR jobs. What is it that causes these companies to move there? The legislature needs to take a look and pass bills authorizing similar proposals, and enact similar lesgislation for income tax and other things.

What do YOU think?

[Patrick]

Unfortunately, it's tough to stop oil companies from moving to Houston for a number of reasons, but the port at Houston and the Gulf are probably top reasons. Unlike back in the 80's, most of the drilling isn't being done in this state any longer...it's either being done off the Gulf or overseas. I'm not sure our legislature could do much to stop the moves.

Seems like most of these companies are following KerrMcGee's trend....cutting down to a skeleton staff of employees...and then finally moving. Expect to see KMG move to Houston within the next 10 years or so, if not sooner.

It is sad to see these companies moving to Texas, but in a way, in the end, it's gonig to be a plus for us. Oil is not a stable basis for an economy. We need to continue to diversify and find economical areas that aren't as fluid as oil. The biotech field is definitely one we need to continue to explore further.

[swake]

It's an accounting office, not the headquarters. But yes, this group of accountants is leaving.

[Patrick]

The Oklahoman claimed it was the Headquarters........

But, it could be wrong......

I think it's interesting that Sullivan was playing dumb here.

Anyways, seems like Tulsa could've saved Sunoco with a decent incentives package...once again they got beat out by Sugar Land, TX, a suburb of Houston. That's pretty bad when suburbs are starting to offer bigger incentives than our large cities in this state.

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"Tulsa loses Sunoco to Houston

By Adam Wilmoth
The Oklahoman

Tulsa is losing another major energy operation — and more than 100 jobs — as Sunoco Logistics Partners LP on Monday confirmed it is moving the headquarters of its Western Pipeline System to the Houston area by January 2006.
The announcement came about two weeks after Sunoco said it was considering a move and had asked for incentive packages from both communities.

"The decision to move Sunoco Logistics' Western Pipeline System headquarters from Tulsa to Houston was made after a thorough review of several key factors," Deborah M. Fretz, Sunoco Logistics president and chief executive officer said in a statement. "One key factor was the increased availability of people in the Houston area with the requisite experience and disciplines that will sustain the excellent performance Sunoco Logistics has achieved and continue its strategic growth. We sincerely thank the city of Tulsa for having been an integral part of the company's success."

Randy Sullivan, Tulsa city council chairman and 23-year oil and gas land manager, objected to Sunoco's claims about the labor market.

"I can't imagine that the expertise they need for their pipeline division is not here," Sullivan said. "I have not found any independents expressing a particular problem with the labor market in Tulsa. That may be a little window dressing, but I don't think that's the core reason."

Although nearly all of the energy industry nationwide has struggled to fill key positions as the industry has grown in recent years, Sullivan said the expanded presence of both the University of Oklahoma and Oklahoma State University in Tulsa has helped that community remain competitive.

Sunoco also said it chose Sugar Land, Texas, for its division headquarters in part because of the "significant financial incentives" the community offered. The company said it expects to sign a lease when the incentive package has been approved and that it expects to complete the move by January 2006.

The move will send about 150 positions from Tulsa to Houston, although only about 110 currently are filled. Those employees have been offered jobs with the company when it moves, Sunoco said.

Sunoco's refinery and marketing operations, however, will remain unchanged, said Scott McCord, Sunoco Logistics' manager of lease crude acquisition.

"We hope our decision to move to Houston is going to be transparent to our customers," McCord said. "All the people independent producers deal with are going to remain in Tulsa."

Still, the move comes as a blow to a community formerly known as the "energy capital of the world" but has since lost dozens of energy company operations, most recently the headquarters of Citgo Petroleum Corp.

"Certainly Tulsa has the wherewithal and is well diversified enough to replace the jobs, particularly in the travel industry and in the gaming industry," said Jake Dollarhide, money manager and chief executive officer of Longbow Asset Management Co. in Tulsa.

"But what is cause for concern is that Houston has won again in the battle for the energy industry. Tulsa's dominance as being the center of the universe for the energy industry is far in the rearview mirror."

[Patrick]

Obviously, I guess it's a divisional headquarters they're moving.

[adaniel]

Did Tulsa even offer any incentives to keep these jobs? You would think officals up there would have learned after the Citgo fiasco. In any event, a move from Sunoco doesn't mean death to Tulsa. It forfeited its title as "Oil Capitol of the World" a while back, and there are other positives for that area. Semgroup is moving their division to Tulsa from Wichita, bringing about 100 jobs to the area, and there has been big expansions announced this year by IBM, Boeing, etc. Mind you these are good, high paying jobs.


By the way, did anyone read the article on newsok.com that in May alone the state got 4,400 new jobs secured under the Quality Jobs Act?

[Patrick]

By the way, did anyone read the article on newsok.com that in May alone the state got 4,400 new jobs secured under the Quality Jobs Act?

I read that, but what kind of jobs were these?

[ErnieBall]

Incentives, tax breaks, etc. are not really relevant to an oil company moving its headquarters (read: executives) to Houston. It's a matter of going where the business is and the business is not in Oklahoma any more (neither drilling nor fellow oil companies). Now, that doesn't necessarily apply to more administrative positions, such as financial services, that don't rely on being close to customers, peers, owners, etc. to function well. Hence the reason companies like ConocoPhillips have retained their offices in Bartlesville, OK transferring executives to Houston and their financial services here. The lower cost of living here is attractive, to a point, for such positions to remain in Oklahoma, but the cost savings don't justify keeping core business in Oklahoma and there is very little the state can do to change that. Rather than wasting resources trying to keep oil companies in the state, something akin to sticking ones finger in a leaky dyke, the state should be focusing on attracting new industries to the area that don't have similar industry-wide issues.

[Patrick]

I think the reason OKC will lose KMG eventually is because they've basically already moved all of the service employees to Houston. All that remains here are the executives. For the reason Ernie Ball mentions, I see KMG moving in the near future. The only thing keeping them here presently is their chemical division. Once they sell that off, their entire company focus will shift to Houstom.

In a sense it probably would've made more sense keeping service employees here since cost of living and pay is less here, but they've already made their move.

KMG is in the same boat Sunoco was.

[ErnieBall]

I think the reason OKC will lose KMG eventually is because they've basically already moved all of the service employees to Houston. All that remains here are the executives. For the reason Ernie Ball mentions, I see KMG moving in the near future. The only thing keeping them here presently is their chemical division. Once they sell that off, their entire company focus will shift to Houstom.

In a sense it probably would've made more sense keeping service employees here since cost of living and pay is less here, but they've already made their move.

KMG is in the same boat Sunoco was.

Your estimation may be very accurate, indeed. There are almost no Kerr-McGee oil and gas people left in Oklahoma City. The only employees here are chemical and 'shared services' employees. The chemical employees will go with the chemical business or be laid off and the shared services employees will all be redundant because oil and gas already has all of the job functions and staff to operate as a stand-alone business. Basically the executives are the only employees remaining in Oklahoma City that will be necessary for the company post-chemical split and I don't see them staying here for long.

[br549]

I have a friend who is a programmer in Houston. His company, like hundreds of others, develop software and programs for the oil industry. One of the biggest reasons that oil companies are moving to Houston is because it has become hotbed of smaller companies that support oil companies. It's much more convenient to go across town to look at and speak to some support company, such as someone that is developing a piece of software, than to do it from hundreds of miles away.