A Local Legacy
Jim Bob Moffett left his mark on New Orleans
A company that once was at the center of an interesting era in local business quietly began folding its tent in the waning days of 2015, and though the firm no longer had much of a local presence, the moment is worth noting.
In the 1980s Freeport-McMoRan was one of the most influential companies in New Orleans and stood among the very few Fortune 500 companies based in Louisiana. Similarly, its chief executive was one of the most powerful businesspeople in the state.
James R. “Jim Bob” Moffett, born in Houma, Louisiana, educated in Texas and for years a denizen of Uptown New Orleans, made his name in the oil and gas industry as a successful wildcatter, drilling one hole after another in the mineral-rich lowlands of Louisiana and bringing up large quantities of hydrocarbons.
In this effort, which would make the young geologist one of the wealthiest people in several states, Moffett teamed up with his friends and mentors Ken McWilliams and B.M. Rankin, who were the “Mc” and “Ran” that combined with Moffett to create McMoRan Exploration Co. in 1969.
In 1981, Moffett led the company through a merger with New York-based Freeport Minerals Co. and subsequently placed both entities under the umbrella of a new company called Freeport-McMoRan Inc.
FMI became a major, publicly traded, independent oil and gas producer with interests in agricultural minerals, such as sulphur and phosphoric acid, and in gold, copper, silver and uranium.
In its early years FMI was headquartered in an office building on Causeway Boulevard in Metairie, but chairman and CEO Moffett, who had a Texas-sized personality and boundless ambition, wanted his company to have a higher profile. In 1984, he moved his headquarters downtown, into a brand new, elegantly curved 23-story office tower that would wear the name Freeport-McMoRan for more than three decades.
During those years, the company expanded rapidly with Gulf of Mexico operations that involved not only oil and gas, but also the extraction of sulphur.
As Moffett led his company to new heights, and as he and his wife raised their children in a sprawling mansion on St. Charles Avenue, he also began concerning himself with the city’s economic future.
He founded a new organization, the Business Council of New Orleans, comprised of the heads of the largest companies in the city. He used the council as a platform for lobbying voters statewide to support tax reform and other measures that he thought would enhance the state’s business climate and help grow jobs.
Moffett became known not only for his business acumen, but for speaking boldly and bluntly about the state of local business and the need for New Orleans to become more competitive.
He made enemies along the way. In particular, Moffett became a target of environmental activists who charged that his company’s various mining activities had harmful effects on air and water quality.
In time Freeport-McMoRan became best known for the copper and gold mining activities it undertook in Indonesia. There, too, Moffett’s public image took a beating due to the company’s perceived lack of concern for safety. More than 30 workers died in accidents in recent years at the Grasberg mine, including 28 who died in a tunnel collapse in 2013.
But the mine became one of the most productive in the world, which led Freeport-McMoRan to engineer the $26 billion buyout of another mining company, Arizona-based Phelps Dodge Corp.
After completing the acquisition, Freeport-McMoRan moved its headquarters from New Orleans to Phoenix but maintained an office in its Poydras Street building.
In recent years, Freeport-McMoRan – which at one point reached more than $20 billion in annual revenue – dived back into the oil and gas business, and in 2013 completed a controversial $19 billion deal that brought Houston-based Plains Exploration & Production Co. under its wing, along with oil and gas assets it had previously spun off.
The company took on heavy debt in order to complete the deal, and as commodity prices plunged during the past year, the economics of the transaction turned sour.
Activist investor Carl Icahn took a big position in Freeport-McMoRan last year and began pressing for changes at the top. In mid-December, the company announced it would auction off all its oil and gas assets. A week later, Moffett announced he would step down from the Freeport-McMoRan board.
The asset sale and departure of Moffett, who has lived in Austin, Texas, for some time, won’t have a big impact on New Orleans, as the company had almost no employees left in the city.
But the departure of Moffett from his company’s board marks a symbolic end to a memorable chapter in New Orleans business history.
During his years as a business activist, Moffett forced New Orleans to take a harder look at its economic future. His efforts inspired many local business owners to follow in his footsteps, and over the years forward-thinking, civic- minded entrepreneurs have become more the norm than the exception in the city.
Jim Bob Moffett cannot take credit for the current relative strength of the local economy, but he deserves credit for introducing a sleepy New Orleans, years ago, to a new style of business leadership that took root and continues to thrive.
Freeport-McMoRan made a big bet on oil and gas in 2013 with acquisitions valued at more than $19 billion, including debt. Since these acquisitions, oil prices have plunged 50 percent.
The company’s energy division includes assets in the deepwater Gulf of Mexico; onshore and offshore California; and in the Haynesville natural gas shale formation in Louisiana.
Shedding the oil and gas business would leave the company with mainly copper and gold mining assets.