Halliburton Moving HQ and CEO to Dubai

Halliburton Co. is moving its headquarters and CEO from Texas to Dubai. For an oil services company, this is no big deal. However, Halliburton isn’t just any petroleum patch company. It used to be run by Vice President Dick Cheney, and its KBR subsidiary, specialist in engineering and military-services, has made more than a pile of money out of Iraq-Nam. The political storm here may result in fewer US government contracts for the company.

From a purely business point of view, the company has globalized and a chunk of its business is east of Greenwich these days. Indeed, almost 40% of last year’s revenues came from the eastern hemisphere. Chief Executive David Lesar said at an energy conference in Bahrain on Sunday, “Dubai is a great business center.” And he’s right. Dubai and the United Emirates, of which is it such an important part, are booming, and it makes some sense to go where the business is. He added, “At this point in time we clearly see there are greater opportunities in the eastern hemisphere than the western hemisphere.”

As the guys at Motley Fool put it, “After all, more than one-third of the company’s 45,000 employees operate in that hemisphere, and as one of the world's top three energy-services companies, Halliburton's role in lifting worldwide crude production by more than 40% over the next couple of decades won't be inconsequential. As I see it, management is simply moving to where the lion's share of that energy activity will be for as long as the eye can see.”

Senator Patrick Leahy (D-VT) had a different take on things, “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.” Congressman Henry Waxman (D-CA), chairman of the House Oversight and Government Reform Committee, may even hold hearings on the move, his office noting that a government audit has Halliburton tied to “$2.7 billion in suspect billings.”

One of the benefits of a move to Dubai is escaping some of the regulatory authorities in the US. Dubai is a much freer kind of place (think Dodge City with camels). The company also will save huge amounts in its annual tax bill. On the downside, Senator Chuck Schumer (D-NY) said, “For one of the largest contractors with the United States government to move its headquarters overseas? [It] just doesn’t look good, doesn’t sound good, doesn’t smell good. Obviously a company that has its headquarters overseas should be given a little more scrutiny than an American company. No question about it.” The question is how much scrutiny can Halliburton afford.

© Copyright 2007 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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