Hess Corporation (formerly Amerada Hess Corporation) is an American global independent energy company engaged in the exploration and production of crude oil and natural gas. Hess, headquartered in New York City, placed #394 in the 2016 list of Fortune 500 corporations. In 2014, Hess completed a multi-year transformation to an exploration and production company by exiting all downstream operations, generating approximately $13 billion from assets sales beginning in 2013. Hess sold its gas station network to Marathon Petroleum (which operates under the retail brand Speedway); sold its wholesale and retail oil, natural gas and electricity marketing business to Direct Energy; closed its refineries in Port Reading NJ and St. Croix USVI (Hovensa JV with PDVSA); sold its bulk storage and terminalling business mostly to Buckeye Partners; and sold its 50% interests in two New Jersey power plants to their respective JV partners (Bayonne Energy Center: ArcLight Capital and Newark Energy Center: Ares EIF). Hess also sold its 50% interest in its JV commodities trading arm HETCO (Hess Energy Trading Company) to Oaktree Capital. HETCO is now known as Hartree Partners.
The company has exploration and production operations both on-shore: United States and Libya and off-shore: Canada, South America (Guyana & Suriname), Europe (Norway & Denmark), Africa (Ghana & Equatorial Guinea), Southeast Asia (Malaysia and the Joint Development Area of Malaysia and Thailand), and Australia.
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History
In 1919, British oil entrepreneur Lord Cowdray formed Amerada Corporation to explore for oil in North America. The firm was incorporated Feb. 7, 1920, in Delaware as a holding company for its principal subsidiary, the Amerada Petroleum Corporation. The oil producer experienced growth during most of the 1920s, hitting a peak in 1926 with a net income of US$4.9 million. However, in the years leading to the Great Depression, weakness in the oil markets contributed to sluggish profits. The aftermath of the market crash aggravated the unsteady oil industry. In the first quarter of 1930, the company experienced a minor loss. The early years of the Depression was a struggle against wavering demand and overproduction in some regions. Later into the 1930s, the financial forecast became more sanguine for Amerada.
In December 1941, the company reorganized by merging the holding company with the principal operating subsidiary, Amerada Petroleum Corporation, into a simplified operating company. The new entity also adopted the former subsidiary's name.
Robust postwar growth rocketed the company past US$100 million in sales in 1955.
Hess Oil and Chemical, an oil refiner and marketer founded by Leon Hess, acquired 10% of the company for US$100 million in 1966 after the British government sold a stake it had amassed during World War II. Albert Levinson became the senior vice president and designed the Hess logo. Hess and Amerada would announce plans for a merger in December 1968. Some Amerada stockholders led by Morton Adler criticized the arrangement as being too favorable for Hess. Adler argued Amerada's oil reserves would contribute the lion's share of assets for the proposed company, so Amerada stockholders should retain more control of the new company. Before the stockholder vote on the matter, Phillips Petroleum, an integrated oil firm, approached Amerada with its own merger proposal, but the offer was declined in March. Still interested, Phillips nonetheless stated it would not carry out a proxy fight against the proposed Hess deal. Hess fearing such a strategy, made a cash tender offer of US$140 million for an additional 1.1 million shares of Amerada, which would double its holding in the company. The new shares would be employed in a May stockholder vote deciding the merger's fate. The vote took place amidst shareholder rancor that in addition to echoing Adler's arguments, objected to Amerada's financing of the recently completed tender offer. Hess planned to cancel the shares and the cost of the acquisition would be absorbed by the newly formed company. One shareholder at the meeting quipped, "It looks to me as if Hess is buying Amerada with Amerada's money." Proponents of the deal won, and the US$2.4 billion merger combining a purely production company with a refinery and marketer operation was completed. However controversy was not yet extinguished by the stockholder confirmation. A class action federal lawsuit in 1972 claiming the proxy vote information was misleading. In 1976, a court agreed that the company falsely claimed to have considered each company's assets as a reason for the merger.
In February 2000, Hess acquired the 51% shares of the Meadville Corporation it didn't already own, and rebranded all 178 Merit gas stations as Hess. The Merit gas station chain were primarily in the Boston, New York, and Philadelphia markets.
In 2001, Amerada Hess purchased Triton Energy Limited in a cash tender deal valued at approximately US$3.2 billion. Triton, one of the largest independent oil and natural gas exploration and production companies in the U.S., had earned a reputation as a maverick oil company due to its highly successful yet potentially risky overseas exploration. According to Amerada Hess press releases at the time, Triton's major oil and gas assets in West Africa, Latin America, and Southeast Asia would strengthen its exploration and production business and give it access to long life international reserves. Hess also stated that the purchase was expected to immediately increase the company's per-day barrel output by more than 25 percent.
Also in 2001, Amerada Hess entered into a joint venture with A.T. Williams Oil Co. of Winston-Salem, North Carolina. The company and its gas stations were called WilcoHess. Eventually, there were 1200 WilcoHess stations.
Following on the heels of the Triton purchase, energy prices fell and global economies weakened. Amerada Hess struggled through the following years, posting a US$218 million loss in 2002 due primarily to a US$530 million charge relating to its write-down of the Ceiba oil field, but then posting steadily increasing profits from 2003 through 2006, when the company posted US$1.920 billion in net income.
In May 2006, Amerada Hess Corp. changed its name to Hess Corp.
On January 18, 2012 the company announced that it would close the Hovensa refinery in St. Croix, United States Virgin Islands by mid-February 2012. The refinery will then serve as a storage terminal
Hess will permanently close its Port Reading, New Jersey petroleum refinery by the end of February, 2013: Gas prices rose to their highest levels since October and Hess said it will lay off 170 of 217 employees, exit the refinery business and seek a buyer for its 19 storage terminals. It will focus on exploration and production. A Hess press release announces the company's plans for "Fully exiting the Company's downstream businesses, including retail, energy marketing, and energy trading." there is no link between the rise in gas prices after the announcement of the closing of the Woodbridge (Port Reading) NJ facility. The output of that facility was more geared to the aviation and specialty fuels markets and not automotive grade products
On March 4, 2013 Hess announced that it would sell its domestic refineries and retail operations and that it would also sell its holdings in Indonesia and Thailand. The New York Times also reported that Hess retail and refinery operations contributed about 4 percent of the company's revenue. It also noted that Hess will sell its holdings in Indonesia and Thailand. The company will focus exclusively on oil production, following a recent trend in the oil industry for companies to spin off their downstream assets and focus on their more profitable upstream business; ConocoPhillips and Marathon Oil have also made similar spinoffs in recent years with Phillips 66 and Marathon Petroleum, respectively.
In April 2013, Hess Corp announced it would be selling its Russian unit to Lukoil for $2.05 billion. In July 2013, Hess Corp said it would sell its energy marketing unit to UK firm Centrica for around $1.03 billion.
Hess Corp announced in October 2013 that it was planning on selling its East Coast and St.Lucia storage terminal network to Buckeye Partners LP for $850 million.
Hess Corp announced in December 2013 that it is selling its Indonesian assets to an Indonesian petroleum consortium.
On January 8, 2014, Hess filed for a tax free spin-off of its gas station network. The newly formed company was to be known as Hess Retail and will include over 1,200 stores throughout the Eastern United States. Before completing the spin-off, Marathon Petroleum subsidiary Speedway LLC announced on May 22, 2014 that it would acquire the retail unit of Hess Corp for $2.87 billion. Following the closure of the acquisition in late 2014, all Hess gas stations will be rebranded as Speedway gas stations by the end of 2017. The transaction completed the transformation of Hess into an energy company focused solely on exploration and production, effectively reversing the Amerada merger almost 50 years prior.
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Environmental record
The New York Times reported on October 28, 1990, that a barge with a load of 31,000 barrels (4,900 m3) of kerosene struck a reef in the Hudson River, spilling 163,000 US gallons (620 m3) of fuel. Immediately, Hess assumed responsibility for the cleanup; the Coast Guard worked alongside the Red Star company to clean and to contain the spill to one area. Coast Guard official Mr. Holmes said "The weather and wind conditions are almost as close to perfect as they could get," and this contributed to a quicker and surer cleanup than could otherwise be. According to The New York Times, Mr. Holmes also said that 70 percent of the spill would be gone in three days due to the natural evaporation rate of kerosene. Even though most kerosene evaporates, toxic chemicals such as benzene stay in the water and harm certain fish. Hess claims that their corporate policy has "long stressed" their "fundamental commitment to comply with applicable environment, health and safety laws and regulations," and they claim to clean every spill made.
In accordance with a New York State Department of Environmental Conservation (DEC) agreement the Hess Corporation will pay $1.1 million in fines and also "bring 65 gasoline stations and oil storage facilities into compliance with state requirements." The agreement addresses more than 100 violations at 65 gas stations and Hess's Brooklyn major oil storage facility. The agreement is aimed at resolving Hess's violations in the DEC's New York City and lower Hudson Valley regions.
In a recent water contamination case against several major US oil companies, the Hess Corporation will pay part of a $422 million settlement. The case was filed by 153 public water providers in 17 states against the oil companies "over drinking water contamination caused by the gasoline additive Methyl Tertiary Butyl Ether (MTBE)." The settlement also stipulates that the settling parties pay their share of treatment costs of the plaintiff's wells that may become contaminated or require treatment for the next 30 years.
In regard to greenhouse gas emissions Hess outlined in their 2006 Corporate Sustainability Report a "four element" strategy to reduce and control emissions. The strategy's steps include monitoring, measuring, managing, and mitigating. Through reporting results, energy efficiency and recovery, and carbon capture and trading the company intends to improve its environmental impact.
Locations
Prior to the March 4, 2013 announcement of its withdrawal from refining and retail sales of petroleum products, Hess operated gas stations in Alabama, Arkansas, California, Connecticut, Delaware, District of Columbia, Florida, Georgia, Indonesia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, and Virginia.
In May 2014, Speedway LLC, a subsidiary of Marathon Petroleum Company, announced they would purchase Hess Corporation's retail business for $2.6 billion. Hess had 1,342 locations along the Eastern United States. The conversion from Hess branding to Speedway branding took place over the course of 2015.
Toy trucks
The Hess toy trucks, helicopters, police cars, airplanes, space shuttles and rescue vehicles have been popular Christmas gift traditions for over 50 years in the US. It is one of the longest running toy brands on the US market.
Since 1964, Hess gas stations have sold toy trucks each year around Christmas time. Each year, the model changes to a new design. Older models are considered collectibles and typically sell for a few hundred or even thousands of dollars. For example, the 1964 truck sells for about $1,400-2,000, depending on condition. Hess periodically has a rare truck such as the 1995 chrome truck with helicopter and the 2002 chrome Mini, which were given away at a stockholder meeting and, more recently, the 2006 truck given to New York Stock Exchange employees to commemorate its name change from Amerada Hess Corporation to Hess Corporation.
In Christmas of 2011, The Hess Corporation donated 900 of its 2011 Hess Toy Trucks and Race Cars to the Salvation Army for the underprivileged children in North Dakota. There was also a Hess Toy Truck Float in the annual Macy's Thanksgiving Day Parade in New York that participated from 2003 up to 2014 when the Hess Corporation's retail unit was sold.
The toy truck business continued after the sale of Hess' retail unit to Speedway.
Models
There have been several instances in which non-truck vehicles were sold under the Hess Toy Truck banner:
- 1966 Tanker Ship, based on the Hess Voyager
- 1993 Patrol Car
- 2001 Helicopter with Motorcycle and Cruiser
- 2004 SUV with Motorcycles: Note: This marks the 40th anniversary of the Hess Toy Truck
- 2009 Race Car with Racer
- 2012 Helicopter and Rescue
All of the Hess Trucks are:
- 1964-1965 Tanker Trailer
- 1966 Tanker Ship
- 1967 Tanker Truck
- 1968-1969 Tanker Truck
- 1970-1971 Fire Truck
- 1972 Tanker Truck
- 1973 No truck produced due to gas shortages, but the 1972 Tanker Truck made a comeback
- 1974 Tanker Truck Note: This marks the 10th anniversary of the Hess Toy Truck
- 1975-1976 Box Trailer
- 1977 Fuel Oil Tanker
- 1978 Fuel Oil Tanker
- 1979 No truck produced due to gas shortages
- 1980 Training Van
- 1981 No truck produced due to gas shortages
- 1982-1983 First Hess Truck
- 1984 Fuel Oil Tanker with Bank Note: This marks the 20th anniversary of the Hess Toy Truck
- 1985 First Hess Truck Bank
- 1986 Red Fire Truck
- 1987 Truck with Barrels
- 1988 Truck with Racer
- 1989 White Fire Truck Note: Similar to the 1986 Hess Fire Truck
- 1990 Tanker Truck
- 1991 Truck with Racer
- 1992 Truck with Racer
- 1993 Patrol Car Note: This is the first toy car made by Hess
- 1994 Rescue Truck Note: This marks the 30th anniversary of the Hess Toy Truck
- 1995 Truck with Helicopter
- 1996 Emergency Truck
- 1997 Truck with Racers
- 1998 Recreational Van with Motorcycle and Sand Buggy Note: Starting in 1998, mini toys were made with the full size trucks
- 1999 Space Shuttle Transport
- 2000 Fire Truck
- 2001 Helicopter with Motorcycle and Cruiser
- 2002 Truck with Airplane
- 2003 Truck with Race Cars
- 2004 SUV with Motorcycles Note: This marks the 40th anniversary of the Hess Toy Truck
- 2005 Emergency Truck with Rescue Vehicle
- 2006 Helicopter Transport
- 2007 Monster Truck with Motorcycles
- 2008 Truck with Front End Loader
- 2009 Race Car and Racer
- 2010 Jet Transporter
- 2011 Truck with Race Car
- 2012 Helicopter and Rescue
- 2013 Truck with Tractor
- 2014 50th Anniversary Tanker Truck & Miniature 1964 Hess Truck Tanker Replica Note: This was a limited production run and was only sold through the Hess Toy Truck website.
- 2014 Truck with Space Cruiser & Scout Note: This marks the 50th anniversary of the Hess Toy Truck. This was also the final year the Hess truck was sold at their gas stations.
- 2015 Fire Truck & Ladder Rescue (sold only online)
- 2016 Truck with Dragster (sold only online)
- 2017 Dump Truck & Loader (sold only online)
Miniature trucks
From 1998 to 2014 and returning in 2017, Hess has produced a mini truck from those years as well as the regular toy trucks. These are the following:
- 1998 Tanker Truck related with the 1990 model
- 1999 Red Fire Truck related with the 1986 model
- 2000 First Hess Truck related with 1982 and 1985 models
- 2001 Truck with Racer related with the 1991 model
- 2002 Tanker Ship related with the 1966 model
- 2003 Patrol Car related with the 1993 model
- 2004 Tanker Truck related with the 1964 model Note: This marks the 40th anniversary of the Hess Toy Truck along with the 2004 SUV with Motorcycles
- 2005 Helicopter from the 1995 model
- 2006 Truck with Racer related with the 1992 model
- 2007 Rescue Truck related with the 1994 model
- 2008 Recreational Van with Motorcycle and Cruiser related with the 1998 model Note: This marks the 10th anniversary of the Hess Miniature Truck fleet
- 2009 Space Shuttle Transport related with the 1999 model
- 2010 Fire Truck related with the 2000 model
- 2011 Helicopter related with the 2001 model
- 2012 Truck with Airplane related with the 2002 model
- 2013 Truck with Racers related with the 2003 model
- 2014 Sport Utility Vehicle related with the 2004 model
- 2017 A boxed set of 3 vehicles were produced: the Emergency Truck related with the 2005 model, the Toy Truck and Helicopter related with the 2006 model, and the Monster Truck related with the 2007 model Note: This is only available through the Hess Toy Truck website.
References
External links
- Official website
Source of article : Wikipedia
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