Offshore drilling
Fire collapses parts of natural gas rig

Fire raged on an offshore drilling rig in the Gulf of Mexico on Wednesday, a day after a natural gas leak from the well forced the 44-person crew to evacuate the area.

The Coast Guard said portions of the rig had “folded” and collapsed and that firefighters were trying to protect the legs of the rig, which was standing in about 150 feet of water. Because it is a natural gas well, the Coast Guard said there would be no impact on shorelines and that a one-mile-by-200-foot sheen from gas condensates was “dissipating.”

The rig owner, Hercules Offshore, is the world’s largest shallow water driller with 44 rigs, 19 of which are in the Gulf of Mexico. This rig, about 50 miles offshore, was drilling to a depth of 8,000 feet to begin production from an existing well.

People close to the company said workers attempted to close the blowout preventer, but that failed to stem the gas leak. They abandoned the rig around midday Tuesday, and fire broke out around 11 that night.

The Coast Guard said the blowout preventer has now collapsed and there was little chance of plugging the well. Another Hercules rig could arrive by Friday to drill a separate relief well, which would take about 25 days to reach a point in the well where it could cut off the flow of gas.

“This blowout reminds us, once again, of the hazards of offshore energy development and the necessity of doing everything we can to reduce the risks to our workers, waters and wildlife,” said Natural Resources Defense Council President Frances
Beinecke, who served on the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

— Steven Mufson

Study: Defaults occur despite loan program

Nearly half of the mortgages modified in 2009 under the Obama administration’s signature homeowner rescue effort are in default again, according to a report Wednesday that raised concerns about the program’s effectiveness.

The report from the Special Inspector General for the Troubled Assets Relief Program, the watchdog for the aid effort, said 46 percent of the struggling homeowners who received loan modifications in 2009 under the Home Affordable Modification Program had redefaulted.

The White House launched HAMP in 2009 to aid struggling homeowners affected by the housing boom and bust. The program, extended in May by two years to help more struggling borrowers keep their homes, draws from the Treasury Department’s financial bailout fund and pays lenders and servicers to rewrite loan terms for borrowers who can’t make their current mortgage payments.

While HAMP has helped about 865,100 homeowners avoid foreclosure over the lifetime of the program through permanent loan modifications, more than 306,000 homeowners had redefaulted on their modified mortgages as of the end of April, the report stated.

— Reuters

Also in Business

l  Ford Motor reported better-than-expected earnings for the second quarter and raised its profit and sales forecasts for the year as strong U.S. pickup truck demand and growing sales in China offset persistent — but narrowing — losses in Europe. Ford earned $1.23 billion in the April-June period, up 18.5 percent from a year ago. The company’s results were propelled by a $2.3 billion profit in North America, a second-quarter record for that region. Ford also reported a best-ever profit of $177 million in Asia.

l  WellPoint, the nation’s second-largest health insurer, sees the new health-care law giving its revenue a $20 billion boost by 2016, led by an expansion of the Medicaid program for the poor and the introduction of subsidized coverage for the uninsured. WellPoint will be one of the largest players on health insurance exchanges created by the Affordable Care Act that will allow consumers to choose subsidized health plans beginning Oct. 1.

l  Dell founder Michael Dell on Wednesday raised his $24.4 billion bid by $150 million but the sweetened offer is contingent on a key change to the shareholder voting rules that will make it easier for him to take the No. 3 personal computer maker private. The new $13.75 per share bid by Michael Dell and private equity firm Silver Lake came hours before a rescheduled vote on the buyout proposal, which has drawn strong opposition from major investors, including billionaire Carl Icahn and Southeastern Asset Management. The shareholder meeting on the deal will now be held Aug 2.

l  GlaxoSmithKline chief executive Andrew Witty said Wednesday that an anti-corruption probe in China will probably hurt the drugmaker’s sales there in his first public statement since the investigation was disclosed. Glaxo’s sales in China rose 14 percent in the second quarter to $325 million, the London-based company said in the statement. China accounts for slightly less than 3.5 percent of the company’s global pharmaceutical revenue. Glaxo said some senior executives in China may have broken the law after allegations this month by the Chinese government that Glaxo bribed hospitals, doctors and health officials.

— From news services

Coming Today

l  8:30 a.m.: Weekly jobless claims and durable goods orders for June released.

l  10 a.m.: Weekly mortgage rates released.

l  Earnings:, General Motors, Southwest Airlines, Starbucks, United Continental Holdings, Zynga.