Halliburton Plc.A Corporate Profile
By Corporate Watch UK
Completed July 2003
Logistics, planning and infrastructure building. Also supplies products and services to the oil and gas industries.
Halliburton operates in more than 120 countries and has a base of 7,000 customers.9 It also has many operations in the UK, relating to the oil and gas industry, as well as running Devonport Management Ltd., the company which runs the Devonport Naval dockyard where it is currently contracted to refit Britain’s Trident nuclear submarines.
When Erle Halliburton died in 1957, the New York Times cited him as one of the richest people in the US – with a fortune of $100 million. That same year saw the acquisition of three companies involved in electronic testing, logging services and making rail car couplings. This acquisition program continued following the post-1957 oil slump. Otis Engineering Corporation joined the company in 1959, with Brown & Root Inc. (a firm internationally known for the construction of military bases, petrochemical plants and offshore platforms) becoming a subsidiary in 1962. By 1965, Halliburton's acquisitions program resulted in 16 units that were autonomous but closely coordinated into three main areas. One division was oil-field services and sales (46% of total earnings). The second was the engineering segment headed by Brown & Root (51% of total earnings), the focus of which was such international construction projects as military bases in Saigon and parts of NASA's Manned Spacecraft Centre near Houston. The third division, speciality sales and services to general industry (3% of total earnings), included missile cleaning and, through two subsidiaries, insurance. In 1983, an economic recession plus lower oil prices reduced Halliburton's earnings from $8.3 billion in 1980, to $1.2 billion. Its response was to slash its number of employees from 115,000 to 65,000 by 1986. A lawsuit accusing Brown & Root of mismanaging a south Texas nuclear power plant construction project didn't help matters either – it was forced to pay $750 million.
During the the early 1990s, another downturn in the US oil industry led to a major restructuring. 3,000 jobs were eliminated along with 26 vice-president slots. Ten of the company's semi-autonomous energy services units were merged into a single group called Halliburton Energy Services. Brown & Root's upstream oil and gas engineering and construction services were also combined to form Brown & Root Energy Services. Halliburton's engineering and construction activities were consolidated under a new Construction and Engineering Group. All non-core and under-performing units were shed. In late 1995, Dick Cheney, who had served as US Secretary of Defense under George Bush (see Links with Government), was named chairman, CEO and president of Halliburton, taking over the helm from the retiring Thomas Cruikshank. Cheney quickly launched another round of acquisitions – perhaps the most ambitious in company history. Landmark Graphics Corp was acquired in 1996 for $550 million in stock. OGC International Plc for $118.3 million, and NUMAR Corporation for $360 million. However, these were as nothing compared to the 1998 merger between Halliburton and Dresser Industries, in effect creating the world's largest oil services firm. The new Halliburton, with revenues in excess of $16 billion was led by William E Bradford (Dresser's chairman and CEO) as chairman and Cheney as CEO. The Cheney years saw Halliburton's revenues rise from $5.7 billion in 1994 to $14.9 billion in 1999, fuelled primarily by growth outside the United States. During Cheney’s tenure as CEO, Halliburton’s overseas operations went from 51 percent of revenue to 68 percent of revenue. 'You’ve got to go where the oil is. I don’t think about it [political volatility] very much,' Cheney told the Panhandle Producers and Royalty Owners Association annual meeting in 1998.11 Current CEO, David J. Lesar, took hold of the reins in 2000 and, by December 2001, had hit the jackpot by securing a 10-year deal known as the Logistics Civil Augmentation Program (LOGCAP) from the Pentagon. The contract basically means that the federal government has an open-ended mandate and budget to send Brown and Root anywhere in the world to run military operations at a profit.12 In March 2002, Lesar separated Halliburton into two wholly-owned operating subsidiaries: Halliburton's Energy Services Group and KBR (Kellogg Brown & Root) Engineering and Construction.13 The KBR subsidiary went on to bring in all but $1 million of Halliburton’s $657.5 million military loot.14 June 2002 saw the first LOGCAP contract in the 'war on terrorism' (LOGCAP is a U.S. Army initiative that uses civilian contractors to support U.S. forces in Department of Defense missions15) with KBR awarded a $22 million deal to run support services at Camp Stronghold Freedom, located at the Khanabad air base in central Uzbekistan. Khanabad was one of the main US bases in the Afghanistan war that housed some 1,000 US soldiers from the Green Berets and the 10th Mountain Division.16 In November 2002, Brown and Root began a one-year contract, estimated at $42.5 million, to cover services for troops at bases in both Bagram and Khandahar, in Afghanistan. Brown and Root employees were set to work running laundry services, showers, mess halls and installing heaters in soldiers' tents. That same year saw the beginning of KBR's contract in Kuwait with 1,800 Brown & Root employees arriving to set up tent cities to provide accommodation for tens of thousands of soldiers and officials. These cities included 'popular' fast food outlets such as Burger King, Subway and Baskin-Robbins.17
One of its current projects is the construction of the Barracuda-Caratinga offshore pipeline in Brazil. It recently admitted that it expects to take an after-tax charge of about $104 million due to cost overruns and delays. This will be the third charge for the project.19 The attack on Iraq has proved enormously lucrative and there is plenty of scope for more senseless money-making thanks to LOGCAP and the US's probably never-ending 'war on terror'. For example, although Halliburton's current contract (worth $118 million) to provide catering and housing for US troops in the Turkish cities of Incirlik, Ankara and Izmir is due to expire this September,20 US army officials have confirmed that KBR has been awarded new and additional contracts in Turkey. Similarly, new contracts for providing facilities for troops illegally holding Al-Qaeda suspects in Cuba (see Corporate Crimes) have also fallen into KBR's lap.
Halliburton is hoping to take advantage of the recent oil industry expansion into Africa. The company attended a conference last May on how best to exploit the resources of 'the new Middle East Gulf' – Republic of Congo, Angola, Nigeria, Equitorial Guinea, Chad, Cameroon, Gabon. Africa currently accounts for 15% of US oil imports, a figure experts (and Halliburton) hope will rise to 25% by 2015.21
1'Halliburton pays $6m claim,' David Teather, 02.06.03, The Guardian, http://www.guardian.co.uk/business/story/0,3604,968446,00.html viewed: 03.07.03
2'Halliburton misses $600m Iraq contract,' Mark Tran. 31.03.03, The Guardian, http://www.guardian.co.uk/usa/story/0,12271,926422,00.html viewed: 03.07.03
3Cheney &' Halliburton: Go where the oil is,' Bruno K & Valette J, Multinational Monitor, 22(5), May 2001, http://multinationalmonitor.org/mm2001/01may/may01corp10.html , viewed: 18.07.03
4'Halliburton pays $6m claim,' David Teather, 02.06.03, The Guardian, http://www.guardian.co.uk/business/story/0,3604,968446,00.html viewed: 03.07.03
5'Lieberman Calls for Halliburton Hearings,' US Senate, 20.05.03, CorpWatch, www.corpwatch.org/bulletins/PBD.jsp?articleid=6829 viewed: 07.07.03
6www.fortune.com/fortune/search?query=halliburton&publication_id=6&Search.x=0&Search.y=0&Search=Go viewed: 14.07.03
7www.halliburton.com viewed: 25.06.03
8'Cheney & Halliburton: Go where the oil is,' Bruno K & Valette J, Multinational Monitor, 22(5), May 2001, http://multinationalmonitor.org/mm2001/01may/may01corp10.html , viewed: 18.07.03
10Halliburton, International Directory of Company Histories, 25:188-192.
11'Cheney & Halliburton: Go where the oil is,' Bruno K & Valette J, Multinational Monitor, 22(5), May 2001, http://multinationalmonitor.org/mm2001/01may/may01corp10.html , viewed: 18.07.03
12'Cheney's Ties to Brown & Root,' Pratap Chatterjee, CorpWatch, 20.03.03
13'Halliburton Company,' Disinfopedia, 03.07.03, www.disinfopedia.org/wiki.phtml?title=Halliburton viewed: 09.07.03
14'Cheney & Halliburton: Go where the oil is,' Bruno K & Valette J, Multinational Monitor, 22(5), May 2001, http://multinationalmonitor.org/mm2001/01may/may01corp10.html , viewed: 18.07.03
15'LOGCAP – who and where we are', www.amc.army.mil/LOGCAP/WhoWhere1.html , viewed: 18.07.03
16'Halliburton Makes a Killing on Iraq War,' Pratap Chatterjee, CorpWatch, 20.03.03, www.corpwatch.org/issues/PID.jsp?articleid=6008 , viewed: 18.07.03
17'Cheney's Former Company Profits from Supporting Troops,' Pratap Chatterjee, CorpWatch, 20.03.03
18'Cheney's corporate past,' Seth Gitell, The Boston Phoenix, 21.09.00 www.bostonphoenix.com/archive/features/00/09/21/TALKING_POLITICS.html viewed: 22.07.03
19'Brazilian project impacts Halliburton,' OilOnline, 08.07.03 www.oilonline.com/news/headlines/internet/20030708.Brazilia.11840.asp viewed: 23.07.03
20'Cheney's Former Company Profits from Supporting Troops,' Pratap Chatterjee, CorpWatch, 20.03.03
21'Conflict in Democratic Republic of the Congo,' Reuters, 22.05.03 www.alertnet.org/thenews/photoalbum/1053596476.htm viewed: 24.07.03