Halliburton Distances Itself
From KBR
ANNA DRIVER / Reuters 16may2007
[More on Halliburton | KBR | Cheney]
HOUSTON — Halliburton Co. on Wednesday distanced itself from its former KBR Inc. unit, as the global oil services firm's chief executive told shareholders it was inappropriate for him to talk about the recently split-off engineering and construction company.
KBR, which is the Pentagon's largest contractor, became a separate company in April as part of Halliburton's plan to focus on its more profitable oil services business.
Over the years, KBR has drawn scrutiny from auditors, congressional Democrats and the U.S. Justice Department for the quality and pricing of its work for the U.S. Army.
"We no longer speak on behalf of KBR, nor is it appropriate for us to speak on behalf of KBR," Halliburton Chief Executive Officer David Lesar told a shareholder in response to a question about the engineering company.
Security was tight at the meeting held at a private resort 30 miles north of Houston. Protesters were held in a fenced-off "free expression" zone. Before the meeting, about 20 demonstrators milled around, watched by a heavy police detail.
Katie Heim, with the Houston Global Awareness Collective, said the group was there to throw a goodbye party to Halliburton because it is moving its CEO to Dubai.
"It's getting a little bit too hard for them to do business in the United States," Heim said, adding that it would be easier for Halliburton to escape criticism and scrutiny in the Middle East.
Halliburton is a frequent target of critics and is often used as a punch-line for late-night television talk show jokes for the work KBR does in Iraq as well as its ties to U.S. Vice President Dick Cheney, who was CEO from 1995 to 2000.
When the company announced it was moving CEO Lesar to Dubai in March to win more contracts in the Eastern Hemisphere, U.S. politicians accused the company of turning its back on a government that had been the source of much of its business.
Speaking to reporters after the meeting, Lesar said he was leaving at the end of this week to move to Dubai, but that he would remain a U.S. citizen and taxpayer.
"I'm looking forward to it," he said of the move.
Lesar also said he expects his company's relationship with Venezuelan state oil company PDVSA to remain good.
"We are proud of that relationship and we expect it to continue," Lesar told shareholders.
Halliburton has about 1,000 employees in Venezuela, where President Hugo Chavez has nationalized U.S. oil projects in the Orinoco basin.
Lesar also told reporters after the meeting that he was "certainly more positive" about drilling markets in North America than he was in January and February, but cautioned that Canada would remain a struggle for the industry.
In April, when Halliburton reported its first-quarter results, it said lower-than-expected drilling activity in Canada and the U.S. Rocky Mountains hurt some segments of its business.
In March, the company warned that its first-quarter profit would fall below analysts' estimates due to decreased drilling activity in North America.
At a meeting later in the day, Halliburton's board of directors voted to raise its quarterly dividend 20 percent to 9 cents a share.
Halliburton also said its board reaffirmed its support of the ongoing $1.6 billion stock repurchase plan.
Shares of Halliburton climbed 4.6 percent to close at $35.59 on the New York Stock Exchange on Wednesday.
source: 23may2007
Halliburton Says Political Furor Will Calm
ANNA DRIVER / Reuters 17may2007
HOUSTON — Executives at global oil services company Halliburton Co. expect the political furor over the company's ties to Iraq to die down over time, following its decision to split off engineering and construction company KBR Inc.
"Things are calming down as they should," Halliburton Chief Operating Officer Andy Lane, told Reuters on Thursday. "Most of the war protesters are totally about the Iraq issue and KBR's involvement there. So when you look at Halliburton going forward, we're just a pure energy services business."
Lane said, however, that it would take time, because KBR had been part of Halliburton since 1962 and because of the company's history with Vice President Dick Cheney.
Cheney was chief executive of Halliburton from 1995 until 2000 and KBR is the U.S. Pentagon's largest contractor in Iraq.
And recent gains in Halliburton shares are proof investors are now focusing on the company's energy services business following the KBR split, Halliburton Chief Financial Officer Christopher Gaut said.
"The benefit of allowing investors to focus on two different industries rather than looking at a mixed company has paid off," Gaut said.
Since the separation with KBR on April 5, shares of Halliburton have risen more than 10 percent, while KBR is up 26 percent.
Halliburton CEO Exercises Options
AP 18may2007
NEW YORK - The chairman, president and chief executive of oilfield services conglomerate Halliburton Co. exercised options to buy 33,333 shares of common stock under a prearranged trading plan, according to a Securities and Exchange Commission filing.
In a Form 4 filed with the SEC Thursday, David J. Lesar reported he exercised the options Wednesday for $13.02 apiece and then sold 49,953 shares Wednesday and Thursday for $35 to $36 apiece.
The stock sale was conducted under a prearranged 10b5-1 trading plan that allows a company insider to set up a program in advance for such transactions and proceed with them even if he or she comes into possession of material nonpublic information.
Insiders file Form 4s with the SEC to report transactions in their companies' shares. Open market purchases and sales must be reported within two business days of the transaction.
source: 23may2007
Halliburton Seeks Investors, Eyes $80 Bln in Projects
SIMON WEBB / Reuters 23may2007
DUBAI — U.S. oil services firm Halliburton Co. is looking for major investors to take a stake in the company as it eyes around $80 billion in projects worldwide over the next five years.
"One of my goals would be to find a set of investors or an investor interested in taking a longer-term investment in the company," Halliburton CEO Dave Lesar told reporters on Tuesday, when asked if the firm was searching for major investors as it expands outside the Americas.
Halliburton is tracking about 60 projects worldwide worth around $80 billion for which it may compete over the next five years, Lesar told a briefing in Dubai, out of a potential oil services project market of around $100 billion a year, he said.
Around 70 percent of that potential market is outside the Americas, which is why Lesar is moving to Dubai, he said. Halliburton is also setting up a corporate headquarters in Dubai.
"If you look at a map of global oil and gas reserves, the focus of our business and industry is clearly moving to this part of the world," he said.
The company aims to do 50 percent of its business in the eastern hemisphere, up from around 35 percent now, Lesar said. He declined to give a timeframe for meeting the target.
The oil services giant plans a secondary listing of its shares in the region. It has yet to decide on which bourse to list, but it could be on Dubai's exchange, Lesar said.
He said there were no tax implications for the company due to the move to Dubai. "We have been and continue to be a U.S. registered company," he said.
When the company announced Lesar was moving to Dubai in March, some U.S. politicians accused it of turning its back on a government that had been the source of much of its business.
Lesar said the negative media coverage generated by the company due to its ties to the current U.S. administration, would "cure itself in the very near future."
Vice President Dick Cheney was chief executive of Halliburton from 1995 to 2000. Former Halliburton unit KBR Inc. is the U.S. Pentagon's largest contractor in Iraq and has drawn scrutiny from auditors for the quality and pricing of its work for the U.S. army.
Halliburton aims to boost its number of employees worldwide by about 14,000 this year, Lesar said. During the first quarter it took on around 4,800, of which around 2,000 were outside the Americas.
source: 23may2007
Halliburton‘s Lesar Begins Work in Dubai
JIM KRANE / AP 23may2007
DUBAI, United Arab Emirates - Halliburton will shift some 70 percent of its capital investment over the next five years to the Eastern Hemisphere, which includes oil and gas zones in the Middle East, Russia, Africa, the North Sea and East Asia, the company‘s chief said Tuesday from his new headquarters in Dubai.
"Halliburton is committed to this part of the world," Lesar told a group of Dubai-based reporters.
"We‘re looking for as many young Arab and Asian engineers, technicians and professionals to come and join our organization," Lesar said while swigging a Coke in a swanky hotel meeting room.
Lesar said his goal was to achieve a 50-50 split between Halliburton‘s business in the Western Hemisphere and the booming new markets in the Eastern Hemisphere, primarily the Mideast. Currently, 65 percent of Halliburton‘s business and as much as 70 percent of its capital spending is in North and South America.
Lesar said the company was relieved to have shed prickly relationships that brought unwanted scrutiny. In April, Halliburton completed the sell-off of its KBR construction and services unit, which has been under fire for overcharging the U.S. military in Iraq .
With KBR gone, Halliburton has no current business in Iraq. But Lesar said Halliburton would look to partner with oil firms doing exploration in Iraq once an investment law is in place.
Also in April, Halliburton stopped work in Iran , where a Dubai-based Halliburton subsidiary operated for years. Lesar said the company wasn‘t taking any more Iran business.
And, in a year and a half, the company‘s much-discussed ties to the Bush administration will end when Bush leaves office. U.S. Vice President Dick Cheney was Halliburton‘s previous chief executive.
Lesar arrived in Dubai on Saturday to begin his stewardship of the company from this Persian Gulf boomtown, home to dozens of international banks and corporations, including U.S. giants like General Electric, Microsoft, Goldman Sachs and Citibank. Halliburton is the first major western corporation to move its chief executive here.
Halliburton‘s remaining top executives will probably stay in Houston, although the company plans to hold some of its board meetings in Dubai, Lesar said.
"This isn‘t a giant transplant from Houston to Dubai," Lesar said. "I don‘t see the need to have my senior executives sitting 10 feet from me."
Halliburton will continue to pay U.S. taxes on its global earnings, although Lesar and other Americans may have personal tax savings from working in tax-free Dubai and the company could save on capital purchases made here.
source: 23may2007
Halliburton to Shift More Investments Abroad
Spokesman Review 23may2007
From Wire Reports
Halliburton will shift some 70 percent of its capital investment over the next five years to the Eastern Hemisphere, which includes oil and gas zones in the Middle East, Russia, Africa, the North Sea and East Asia, the company's chief said Tuesday from his new headquarters in Dubai.
Dave Lesar, arriving for his first week in United Arab Emirates, said Halliburton Co. would quickly expand its Mideast operations as it targets $80 billion in new business over the next five years — 75 percent of which lies in the eastern hemisphere, mainly the Middle East.
"Halliburton is committed to this part of the world," Lesar told a group of Dubai-based reporters.
The company seeks Arab investors and a share listing on Dubai's new international stock exchange, Lesar said. Halliburton has already hired 4,800 of the 14,000 new workers it plans to bring aboard this year, many of them in the Arab world, he said.
"We're looking for as many young Arab and Asian engineers, technicians and professionals to come and join our organization," Lesar said while swigging a Coke in a swanky hotel meeting room.
•MGM Mirage Inc.'s board of directors met Tuesday for the first time since Tracinda Corp., the investment arm of billionaire investor Kirk Kerkorian, announced it wanted to enter talks to buy two MGM Mirage properties and perhaps restructure the giant casino company.
Chief Executive Terry Lanni did not accept questions about the Tracinda announcement during a shareholders meeting early Tuesday, and by the afternoon the board was still meeting behind closed doors.
Kerkorian, 89, was present at the shareholders' meeting but said nothing about the matter. He was expected to attend the board meeting as a member. Tracinda owns 56 percent of MGM Mirage shares.
•Brewer Anheuser-Busch Cos. said Tuesday it is on track to meet its 2007 earnings-per-share growth target of 7 percent to 10 percent, but said its second-quarter profit would come in below Wall Street's current projections.
Chief Executive August Busch IV told stock analysts that the nation's biggest brewer planned to cut between $300 million and $400 million in costs over the next four years. Busch said the company plans to grow revenue by selling premium beers and launching a select group of non-beer beverages in growing markets.
Anheuser-Busch's stock rose $1.42 to close at $51.07 Tuesday.
source: 23may2007
U.S. Think Tank Details Global Investment in Iran
CAROL GICOMO / Reuters 7may2007
WASHINGTON, May 7 — Companies and government agencies in three dozen countries have struck more than $153 billion in deals with Iran since 2000, investment that could offer important leverage to help persuade Tehran to abandon its nuclear program, a new study says.
The research by the conservative American Enterprise Institute think tank may be the most comprehensive attempt to publicly identify corporate and government investors whose withdrawal could potentially affect Iran's nuclear policy.
The data comes as the U.N. Security Council considers new sanctions against Iran and momentum grows in the U.S. Congress and in state legislatures for controversial initiatives encouraging divestment in companies doing business in Iran.
The AEI report, made available to Reuters, found that while the number of new deals with Iran fell dramatically between 2000 and 2007 from 101 to 18, the value of those deals rose from $21.68 billion in 2000 to $47.5 billion in 2007.
"I think it means that companies are only interested in going in for a big pay off," said Danielle Pletka, AEI's vice president for foreign and defense policy.
"The companies are doing a cost-benefit analysis and saying to themselves 'this is too good to pass up.' Yes, fewer companies are doing business there but if the payoff is good enough, they figure, so what if they are rogue regime?"
Most of the investment from more than 300 corporations and government agencies comes from Europe and Asia and most deals involve the energy sector, given that Iran is the world's fourth-largest oil exporter.
INVESTMENT TOTALS
The report lists companies, countries, specific transactions, export credit guarantees, and export and import flows — all from public sources. It will be formally released at a news conference on Wednesday.
During the period studied, French companies were the leading investor in Iran at $30.2 billion, followed by China at $29.5 billion, Germany at $26 billion, Italy at $23.7 billion, Japan at $18.3 billion, Austria at $18 billion, the Netherlands at $13.6 billion, South Korea at $13.27 billion, Britain at $12.78 billion and India at $9.9 billion.
While the country-by-country total exceeds the overall value since 2000 cited by AEI, the think tank said it had tried to avoid double-counting of transactions where more than one country was involved.
With other factors added in, France is only Iran's fifth-largest trading partner. While some countries, like Japan, have reduced investment in Iran, "France has remained an enthusiastic partner," Pletka said.
Even the United States, which has had trade sanctions on Iran for nearly 30 years, posted $4.2 billion in investments. The sanctions were imposed after fundamentalist students held 52 Americans hostage for 444 days at the U.S. embassy in Tehran during the 1979 Islamic revolution.
Pletka said U.S. firms took advantage of loopholes that allowed them to conduct business through subsidiaries, as did Halliburton Co. — which recently completed its work in Iran — or to assert, like Coca Cola and PepsiCo., that they were providing needed foodstuffs.
COMPANIES NAMED
Other companies and government agencies cited by AEI included France's Calyon Corporate and Investment Bank, the Italian national export credit agency SACE, China National Non-Ferrous Metals Industry Corp., Germany's Linde AG and Japan's Chiyoda Corp.
China, which needs new energy supplies to support its booming economy, was Iran's number one trading partner in 2005 — the last year for which trade figures were available — after four consecutive years as number two.
In 2005, Italy was the number two trading partner and also the number one guarantor of government export credits to Iran.
Japan, Iran's number one trading partner in 2000-2004, was ninth in 2005. Tokyo has been under strong pressure from Washington to curb its dealings with Iran.
Spokesmen for the U.S. State Department and Treasury Department say they were unaware of any comprehensive U.S. government analysis of U.S. and international investment in Iran despite the fact that their agencies play central roles in the U.S.-led effort to increase pressure on Tehran's leaders.
Conflict Securities Advisory Group, a Washington-based global security risk consultancy, keeps a file on more than 300 companies doing business in Iran but the information is for clients.
The United States and its allies have accused Iran of developing a nuclear weapon but Tehran insists it is only trying to produce nuclear energy.
source: 23may2007
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