Halliburton Chickens Out...Iran=Axis of Evil?

January 29, 2005
Halliburton Will Withdraw From Energy Projects in Iran
By SIMON ROMERO

OUSTON, Jan. 28 - The chief executive of Halliburton said on Friday that the company would withdraw all employees from Iran and end its business activities there after its Iranian energy exploration contracts came under criticism this month.

Halliburton, the nation's largest energy- and military-services company, plans to cease dealings in Iran when it completes its present commitments, David J. Lesar, Halliburton's chief executive, told investors on a conference call.
Those commitments include a gas-drilling deal with an Iranian partner valued at about $35 million that the company secured this month, he said.

"The business environment currently in Iran is not conducive to our overall strategy and objectives," Mr. Lesar said.

Speculation has been increasing about potential military action by the United States in Iran.

Halliburton and a handful of other American companies have been able to circumvent sanctions against doing business there.

Halliburton operates in Iran through a unit based in nearby Dubai, United Arab Emirates, that in turn is registered in the Cayman Islands. No American citizens are permitted to work in Iran for Halliburton, and its investing there is limited to no more than $40 million.
Yet Halliburton's decision to no longer be in Iran, even working within the restrictions, suggests that it is still sensitive to criticism about its operations in the Middle East and its connections to Vice President Dick Cheney, who ran the company for five years until 2000.

Mr. Lesar also signaled on Friday that the company was moving forward with plans to split off KBR, the unit responsible for carrying out its military-services contracts in Iraq.

"In Iran they figured it's probably not worth the grief," said Michael Urban, an analyst at Deutsche Bank.

Halliburton's Iraq-related work accounted for $1.7 billion of revenue in the most recent quarter, out of a total of $5.2 billion.

Shares in Halliburton fell $2.67 on Friday, or 6 percent, to close at $40.84.



Copyright 2005 The New York Times Company