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Halliburton's Dubai move sparks US political ire
By Justin Cole
AFP
WASHINGTON
Petroleumworld.com 03 13 07US oil services giant Halliburton, formerly led by Vice President Dick Cheney, provoked fury among some Democrats Monday after announcing it will shift its corporate base to Dubai from Texas.
Halliburton, which was run by Cheney from 1995 to 2000, said Sunday it was relocating to the United Arab Emirates to capitalize on the Gulf region's booming energy market.
"It's an example of corporate greed at its worst," Democratic Senator Patrick Leahy, chairman of the powerful Senate Judiciary Committee, said in a statement.
"This is an insult to the US soldiers and taxpayers who paid the tab for their no-bid contracts and endured their overcharges for all these years," he charged.
"At the same time they'll be avoiding US taxes, I'm sure they won't stop insisting on taking their profits in cold hard US cash."
Halliburton and its former KBR subsidiary, which it is spinning off, have weathered several contracting controversies and investigations since Halliburton was awarded a no-bid 2.4 billion dollar contract to supply the US military on the eve of the US-led invasion of Iraq in 2003.
KBR agreed last year to pay the US government eight million dollars to settle fraud claims related to an Army supply contract. The firm's Nigerian operations have also come under US government scrutiny in recent years.
Halliburton spokeswoman Melissa Norcross said there would be no layoffs as a result of the move, and that Halliburton would still remain legally registered in the United States.
Halliburton's chief executive, Dave Lesar, will move his office from Houston, Texas to Dubai. But Norcross said other top officers would remain based in Houston.
Halliburton said it was relocating to Dubai on business grounds and that Lesar would be overseeing a ramped-up bid to gain more regional oil services contracts and other related business.
Karen Lightfoot, a spokeswoman for Democratic Congressman Henry Waxman, said the lawmaker might convene a hearing in the House of Representatives over Halliburton's announcement.
"This is a surprising development. I want to understand the ramifications for the US taxpayer and national security," Waxman, the chairman of the House Oversight and Government Reform Committee, said in a statement.
The firm said that over 38 percent of its 13 billion dollar oil-field services revenue was generated from the eastern hemisphere.
It also said its move to the United Arab Emirates was the next step in a strategic plan unveiled in 2006 to boost its business with national oil companies in and around the Gulf.
Halliburton's stock was down 10 cents at 31.92 dollars in late morning deals.
Houston mayor Bill White was less critical of Halliburton's move.
"The mayor says he understands the nature of the decision," said Frank Michel, a spokesman for White. "He doesn't think it will negatively impact Houston or our status as an international energy center."
Halliburton's move is likely to bolster the image of Dubai as an up-and-coming business capital. The city is undergoing a building boom, partly tied to luxurious tourist hotels.The UAE's rulers are vying to develop Dubai as a corporate, tourism and financial hub lying between Europe and Asia. The kingdom neighbors oil-rich Saudi Arabia to its west and Oman to its east, while its northern coastline nestles the Gulf across a stretch of water from Iran.
Other international energy players already operate in the UAE. US energy behemoth ExxonMobil last year acquired a stake of nearly 25 percent in a huge oil field off Abu Dhabi, the country's capital.
Halliburton has operations in 70 countries and more than 45,000 employees.
AFP 12 1630 GMT 03 07
Copyright© 2007 AFP. All Rights Reserved.
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