Halliburton

For information on the early 20th century explorer of the same name, see Richard Halliburton

Halliburton Energy Services is a multinational corporation based in Houston, Texas, in the United States and the world's second-largest oilfield services company behind Schlumberger Limited. Founded in 1919, the company's primary focus is in the energy and petroleum industries, although it has many diverse subsidiaries which operate in other areas. Halliburton was based in Dallas, Texas, but its headquarters moved to Houston, Texas in 2003.

History

1919 to early 1990s

Mr. and Mrs. Erle P. Halliburton first tried to find work cementing oil wells in Burkburnett then moved their business (New Method Oil Well Cementing Company) to the Healdton field near Ardmore, Oklahoma.

In the early 1990s Halliburton was found to be in violation of federal trade barriers in Iraq and Libya, having sold these countries dual-use oil drilling equipment and, through its former subsidiary, Halliburton Logging Services, sending six pulse neutron generators to Libya. After having pleaded guilty, the company was fined $1.2 million, with another $2.61 million in penalties.

In 1998 Halliburton merged with Dresser Industries.

In 2001 it was revealed by the Wall Street Journal that a subsidiary of Halliburton Energy Services called Halliburton Products and Services Ltd. opened an office in Tehran. The company, HPS, operated "behind an unmarked door on the ninth floor of a new north Tehran tower block." HPS was incorporated in 1975 in the Cayman Islands.

Although HPS was incorporated in the Caymans and is "non-American", it shares both the logo and name of Halliburton Energy Services and, according to Dow Jones Newswire offers services from Halliburton units world-wide through its Tehran office. Such behaviour, undertaken while Dick Cheney was CEO of Halliburton, may have violated the Trading with the Enemy Act.

A Halliburton spokesman, responding to inquiries from Dow Jones, said "This is not breaking any laws. This is a foreign subsidiary and no US person is involved in this. No US person is facilitating any transaction. We are not performing directly in that country."

In 2002, Judicial Watch filed suit on behalf of shareholders against Cheney and 13 other Halliburton directors, as well as Halliburton itself and its accounting firm, Arthur Andersen LLP and Arthur Andersen Worldwide.

As of 2003, Halliburton was still operating in Iran. CNN, in a report entitled "US companies are operating in Iran despite sanctions," reported that a Halliburton spokesperson told the news agency that HPS helps Iran build oil rigs in the country's south.

In April 2002, a Halliburton subsidiary, Kellogg, Brown and Root (KBR), was awarded a $7 million contract to construct steel holding cells at Camp X-Ray. More recently, the subsidiary was awarded a no-bid contract to conduct oil well firefighting in Iraq worth an estimated $1 billion. In May 2003, Halliburton's role under contract with regard to Iraqi oilfields was expanded to include "operation of facilities and distribution of products".

Also in May 2003, Halliburton revealed in a filing with the Securities and Exchange Commission that its KBR subsidiary had paid a Nigerian official $2.4 million in bribes in order to receive favorable tax treatment.

The company is currently (2003, 2004) being investigated by the Securities and Exchange Commission due to allegations of profit inflation by accounting for cost overruns as revenue in shareholder reports. Halliburton counters that the practice was approved by its accounting firm, Arthur Andersen, and conforms to generally accepted practices.

Halliburton's chairman and CEO is David J. Lesar, who took over the positions from Dick Cheney, now the U.S. Vice President. Cheney became chairman and CEO of Halliburton in 1995; he retired from the company during the 2000 U.S. presidential election campaign, and was awarded a severance package worth $20 million.

Iraq Controversy

In recent years the company has become the center of many controversies involving the 2003 Iraq War and the company's ties to Vice President Dick Cheney.

Overall, KBR (Halliburton Construction subsidiary) has contracts in Iraq worth up to $18 billion. Including a single "No bid" contract, known as "Restore Iraqi Oil" (RIO) has estimated worth of $7 billion. Influence of the contracts can be seen from company financial reports company posted a second-quarter net loss of $663 million in 2004, revenue rose 38 percent from a year earlier to $5.0 billion. Iraq-related work contributed $1.7 billion in revenue.

Halliburton is the only company mentioned by Osama bin Laden in an April 2004 tape where he says "this is a war [in Iraq] that is benefiting major companies with billions of dollars."

Halliburton is still making annual payments to its former chief executive, the vice-president Dick Cheney. The payments, which appear on Mr Cheney's 2001 financial disclosure statement, are in the form of "deferred compensation" of up to $1m (£600,000) a year. The "deferred compensation" accounts has generated an income between $50,000 to $100,000 for the vice president. Dick Cheney also retains unexercised stock options at Halliburton, the vice president's benefits include three batches of stock options comprising 433,333 shares. He also has a 401(k) retirement account valued at between $1,001 and $15,000 dollars.

In 2002, Cheney's total asset wealth was valued at between $19.1 million and $86.4 million.

See also: private military contractor, list of Halliburton subsidiaries