Halliburton
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- For information on the early 20th century explorer of the same name, see Richard Halliburton
Template:Infobox Company Halliburton Energy Services Template:Nyse is a multinational corporation based in Houston, Texas. With revenues exceeding $20.46 (billion U.S. FY 2004) and over 95,000 employees, Halliburton operates in two major business segments. The Energy Services Group provides technical products and services for oil and gas exploration and production. The KBR group is a major construction company of mainly refineries, oilfields & pipelines, and chemical plants.
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Business Overview
Energy Services, the company's historical bedrock, includes: drilling & formation evaluation, digital & consulting solutions, production volume optimization, and fluid Systems. This business continues to be a profitable, and the company is a world leader in this industry, Schlumberger is the company's closest competitor.
With the acquisition of Dresser Industries in 1998, the Kellogg-Brown & Root division (in 2002 renamed to KBR) was formed by merging Halliburton's Brown & Root (acquired 1962) subsidiary and the M.W. Kellogg division of Dresser (which Dresser had merged with in 1988). KBR is a major international construction company, which is a highly volatile undertaking subject to wild fluctuations in revenue and profit. Asbestos-related litigation from the Kellogg acquisition caused the company to book over $4.0 (billion U.S.) in losses from 2002 through 2004.
As a result of the asbestos-related costs, Halliburton lost approximately $900 million U.S. a year from 2002 through 2004.
At a meeting for investors and analysts in August 2004, a plan was outlined to divest the KBR division through a possible sale, spin-off or initial public offering. Analysts at Deutsche Bank value KBR at up to $2.15 billion, while others believe it could be worth closer to $3 billion by the time management decides what to do with the business in 2005.
History
1919 to 1990
Mr. and Mrs. Erle P. Halliburton first tried to find work cementing oil wells in Burkburnett, Texas then moved their business (New Method Oil Well Cementing Company) to the Healdton field near Ardmore, Oklahoma.
- 1920: reorganized - Halliburton Oil Well Cementing Company
- 1921: headquarters - Duncan, Oklahoma
- 1924: incorporation
- 1948: New York Stock Exchange listing
- 1957: acquisition of Welex Jet Services of Fort Worth, Texas
- 1960: name shortened to Halliburton Company
- 1961: headquarters - Dallas, Texas
- 1962: acquisition of Brown and Root of Houston, Texas
- 1988: acquisition of Geophysical Service Incorporated from Texas Instruments
- 198?: acquisition of Geosource
- 198?: Halliburton Logging Services
- 1982: workforce - 115,000
- 1982: energy industry decline
- 1991: workforce - 73,000
1990s
- In the aftermath of Operation Desert Storm in Kuwait in 1991, Halliburton crews helped bring 320 burning oil wells under control.
- 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 the Balkans conflict in the 1990s, KBR supported U.S. peacekeeping forces in Bosnia, Croatia and Hungary with food, laundry, transportation and other lifecycle management services.
- In 1995 Dick Cheney became chairman and CEO
- In 1998 Halliburton merged with Dresser Industries, which included Kellogg.
2000s
- On 10 April 2001 the Dresser division (excluding the former Kellogg division) entered an agreement to separate itself once again from Halliburton by management purchasing its equity, the new company to be called Dresser Inc.
- In 2001 it was reported 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." Although HPS was incorporated in the Cayman Islands in 1975 and is "non-American", it shares both the logo and name of Halliburton Energy Services and, according to Dow Jones Newswires offers services from Halliburton units world-wide through its Tehran office. Such behaviour, undertaken while 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." No legal action has been taken against the company or its officials.
- In 2002, Judicial Watch, a public action lawfirm, filed suit on behalf of shareholders against Halliburton, its current and former directors, and its accounting firm, Arthur Andersen LLP and Arthur Andersen Worldwide, for alleged accounting irregularities, said to be profit inflation by accounting for cost overruns as revenue. The Securities and Exchange Commission investigated the same issue. Halliburton counters that the practice was approved by its accounting firm, Arthur Andersen, and conforms to generally accepted accounting practices. In August, 2004, Halliburton paid a $7.5 million fine to settle the issue.
- In April 2002, 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". [1] (http://news.bbc.co.uk/2/hi/business/3006149.stm)
- 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. [2] (http://www.theage.com.au/articles/2003/05/10/1052280472817.html) [3] (http://www.chron.com/cs/CDA/ssistory.mpl/business/1902750)
- 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.
Iraq Controversy
KBR has contracts in Iraq worth up to $18 billion, including a single "No bid" contract known as "Restore Iraqi Oil" (RIO) which has an estimated worth of $7 billion.
Today KBR employ over 30,000 men and women in Iraq. Halliburton's work in Iraq is diverse and complicated. In addition to troop support, Halliburton also provides air traffic control support; produces 74 million gallons of water a month for consumption, hygiene and laundry; deploys as many as 700 trucks a day to deliver essentials to American forces; and provides firefighter and crash-rescue services, as well as working to restore Iraqi oil infrastructure.
Despite cronyism allegations, the company's contracts in Iraq are much less profitable than its core energy business. They are expected to have generated more than $13 billion in sales by the time they start to expire in 2006 but most offer low margins - less than 2% on average in 2003 and just 1.4% this year for the logistics work.
Halliburton is the only company mentioned by terrorist Osama bin Laden in an April 2004 tape where he claims that "this is a war [in Iraq] that is benefiting major companies with billions of dollars."
An audit of KBR by the Pentagon’s Defense Contract Audit Agency (DCAA) found $108 million in "questioned costs" and, as of mid-March 2005, said they still had "major" unresolved issues with Halliburton.
Dick Cheney ties
In recent years the company has become the center of many controversies involving the 2003 Iraq War and the company's ties to US Vice President Dick Cheney.
Bill Gertz, defense reporter for The Washington Times, wrote: "Vice President Dick Cheney was chief executive officer of Halliburton from 1995 until 2000, and Democrats repeatedly have tried to link the administration to claims of government favoritism toward the firm." [4] (http://www.washtimes.com/national/20041006-012159-1086r.htm).
Cheney retired from the company during the 2000 U.S. presidential election campaign with a severance package worth $20 million.
Cheney's deferred compensation from Halliburton, which appeared on Cheney's 2001 financial disclosure statement, generated an income between $50,000 to $100,000 for the vice president. Dick Cheney also retains 433,000 share-equivalent unexercised stock options at Halliburton.
On the question of Cheney's deferred compensation from Halliburton, officials of the Bush-Cheney campaign said that before entering office in 2001, Cheney bought an insurance policy that guaranteed a fixed amount of deferred payments from Halliburton each year for five years so that the payments would not depend on the company's fortunes. The officials also said he had promised to donate to charity any after-tax profits he made from exercising his stock options. These steps are not unusual for corporate executives who enter government.
See also
External links
- Halliburton (http://www.halliburton.com/) official corporate site
- Halliburton Watch (http://www.halliburtonwatch.org/)
- Independent Media TV - Dick Cheney and Halliburton (http://www.independent-media.tv/gtheme.cfm?ftheme_id=35) media watch
- LookSmart - Halliburton/Cheney Probe (http://search.looksmart.com/p/browse/us1/us317829/us317861/us65309/us282395/us10090036/us10104791/us10090040/) directory category
- Halliburton Company (http://www.tsha.utexas.edu/handbook/online/articles/view/HH/doh8.html) from The Handbook of Texas
- Halliburton Is a Handy Target for Democrats (http://www.washingtonpost.com/wp-dyn/articles/A30209-2004Sep17.html) from The Washington Post 18 September 2004
- The Halliburton Agenda: The Politics of Oil and Money (http://www.democracynow.org/article.pl?sid=04/05/17/1431237) from Democracy Now 17 May 2004
- A Halliburton Primer (http://www.washingtonpost.com/wp-srv/onpolitics/articles/halliburtonprimer.html) from The Washington Post 11 July 2002
- A Bill to Disclose Halliburton's Business With Iran (http://www.fas.org/sgp/congress/2005/s299.html)
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