Kerr-McGee Name Likely To Disappear From Oklahoma Landscape

Friday, June 23rd 2006, 10:43 am

By: News On 6

OKLAHOMA CITY (AP) _ From humble beginnings in Ada in 1929, Kerr-McGee Corp. rose to become not only a symbol of the oil industry in the Sooner State, but one of only six Fortune 500 companies based in Oklahoma.

Now the Kerr-McGee name likely will be relegated to the history pages, thanks to Anadarko Petroleum Corp.'s $21 billion acquisition of Kerr-McGee and Western Gas Resources Inc. of Denver, which was announced Friday.

News of Kerr-McGee's impending departure from Oklahoma after 77 years caused wistfulness, even among corporate-executive types normally not given to such emotions.

``It breaks my heart, and I'm sincere about that,'' Anadarko chairman, president and chief executive officer Jim Hackett said, rattling off names of bygone industry stalwarts like Standard Oil. ``It does break your heart to have these names go, but I guess it's what free enterprise does ... What we fondly hope for is we can retain much of what made Kerr-McGee special.''

That means, he said, trying to retain as many Kerr-McGee employees as possible _ including the company's 190 corporate service workers at its Oklahoma City headquarters. Anadarko's headquarters are in suburban Houston.

``I have no expectations that there will be two headquarters in this company,'' Hackett said. ``We will look at any way we can to take care of people any way we can ... but we can't have a situation where we double up on staff. That won't be efficient for our shareholders.''

Hackett said he'd meet with Kerr-McGee's Oklahoma City employees next week. Oklahoma City Mayor Mick Cornett said he spoke with Hackett following Anadarko's announcement, and Cornett said it was unlikely that the company would have a presence in the city.

``That's what is really disappointing,'' Cornett said. ``Kerr-McGee has been such a fixture and a high-profile and great corporate citizen through the years. Thousands of Oklahomans have worked for Kerr-McGee through the years. We were a better city because of them.''

Kerr-McGee's corporate citizenship included being one of five ``presenting sponsors'' this past basketball season for the NBA's New Orleans Hornets, when the team temporarily relocated to Oklahoma City after Hurricane Katrina.

``Kerr-McGee was instrumental to making last season happen,'' said Michael Thompson, the Hornets' director of corporate communications.

Gov. Brad Henry said the state values Kerr-McGee and would ``want it to retain a presence in Oklahoma. Since its inception, Kerr-McGee has been an important part of the history of our state ... and that is a tradition worth fighting for.'' Henry said he'd meet soon with Luke Corbett, Kerr-McGee's chief executive officer, ``to see what our next step will be.''

U.S. Rep Ernest Istook, a Republican gubernatorial candidate, said the tax policies of Henry, a Democrat, has contributed to the departure from Oklahoma of companies like Kerr-McGee.

``This is the latest wake-up call that isn't getting answered,'' Istook said.

Kerr-McGee began in 1929 when Robert S. Kerr _ later a governor and U.S. Senator _ and his brother-in-law, James L. Anderson, formed an Ada company known as Anderson and Kerr Drilling. The company moved to Oklahoma City a year later, and in 1931, it began producing oil when a well was completed near Konawa.

The company became known as Kerr-McGee in 1942, when Dean A. McGee became its executive vice president. Under McGee, Kerr-McGee became an international leader in offshore drilling, and in 1947 it opened the first commercially productive well out of the sight of land.

Kerr-McGee has had a significant presence in other Oklahoma towns, too, notably in Wynnewood, where it bought a refinery in 1945. To this day, two of the main streets in that Garvin County town are named after Kerr and McGee.

``It's a vital part of our state's past and present,'' said state House Speaker Todd Hiett.

The company received unwanted publicity after Karen Silkwood, an employee at Kerr-McGee's plutonium processing plant near Crescent, died in a mysterious car crash in November 1974, as she was on her way to meet with a New York Times reporter to discuss what Silkwood said was lax security at the plant.

Silkwood's father, Bill, filed a $71 million lawsuit against the company in 1976. After years in the courts _ including two trips to the U.S. Supreme Court _ Kerr-McGee settled with the Silkwood family for $1.3 million. The case was made famous by a 1983 film starring Meryl Streep.

Kerr-McGee is hardly the first oil giant to leave Oklahoma for Houston. Phillips Petroleum was founded in Bartlesville in 1917 and based there until 2002, when the company merged with Conoco Inc. to form ConocoPhillips, with its headquarters in Houston.

Last month, Citgo Petroleum Corp. announced it would relocate 350 jobs from Tulsa to other locations, with most of them going to Houston. The move would leave about 45 positions in a city where Citgo was based for more than two decades and once employed more than 1,000 people.

``Houston has evolved into a hub in the industry,'' said Chip Minty, a spokesman for Oklahoma City-based Devon Energy Corp. ``What's taking place is that the industry has been consolidating over the past 20 years with a lot of mergers and acquisitions. Many times those transactions mean companies that are acquired move to their new headquarters.''

Devon, the largest U.S.-based independent producer of oil and natural gas _ pending approval of the Anadarko acquisition _ and Chesapeake Energy Corp., the nation's second-largest independent natural gas producer, remain headquartered in Oklahoma City. Minty and Thomas Price, a senior vice president for corporate development at Chesapeake, said Friday their companies remain committed to staying in Oklahoma City.

``We have an ongoing commitment to keeping Oklahoma's best and brightest here in the state,'' Price said. ``If (Kerr-McGee employees in Oklahoma City) are interested in becoming part of the Chesapeake family, we'd be glad to give them the opportunity.''

Cornett acknowledged the ``sentimentality'' connected to Kerr-McGee in Oklahoma City but said that if one ``believes in the entrepreneurial spirit, you have to accept that these type of things happen. They got a deal they couldn't turn down.

``At the end of the day, Oklahoma City is losing a corporate headquarters, which is something you never want to lose. These are 200 high-paying jobs, the kind we try to recruit. But the energy sector is vibrant, a lot of jobs are being created and we will be able to absorb the impact.''