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March 12, 2007
Halliburton and the Moonbats (updated)
As soon as I read yesterday's Wall Street Journal article ($link) online, I knew the moonbats would have a field day:
It didn't take long. Comment threads on Daily Kos and elsewhere began speculating about moving documents beyond the reach of subpoenas. Of course, it will have no such effect. Even that darling of the right the New York Times reports,
With a huge business base in the United States, Halliburton will never be beyond the reach of subpoenas or any other legal consequence. Indeed, the relative portion of its business still in the United States is the reason it must expand elsewhere.
The action in the oilfield services business is not in the United States, where most of the available opportunities have been exploited. Were the federal and state governments to open up federal lands in the West and offshore drilling in Florida and California, and especially the Arctic opportunities just begging to be developed so the caribou herds could warm themselves, there would be a lot more business for Halliburton in the Western Hemisphere.
But the big new oilfields requiring the sort of work Halliburton specializes in are half a world away. And Halliburton, anchored in Houston, is at a disadvantage compared to rival Schulmberger, with dual headquarters in Paris and Houston.
CEO David Lesar will be spending more of his time in Dubai because the oil business is still based on personal contacts, and he will be dealing with the heads of national oil companies from the Arab World, the Far East, Africa, the Caspian Basin, and other points much more easily accessible from Dubai.
The rise of Emirates Airlines with a massive hub in Dubai Airport means that Dubai-based personnel can fly off the Kazakhstan, Jakarta, Riyadh, or Accra more quickly and cheaply than from Houston. The development of resorts and massive hotel properties in Dubai also means that more and more of the oil world's movers and shakers visit Dubai with regularity. It is simply where Halliburton needs to be.
Mr. Lesar will not doubt be spending part of his time in Houston, and North American activities of Halliburton will continue to be managed from Houston. In this era of global business, it is not in the least unusual for companies to maintain multiple headquarters sites, as does rival Sclumberger. Carlos Ghosn, the president of Renault, has simultaneously serves as CEO of Nissan, and divides his time between Tokyo, Paris, and other locations, using a specially-purchased Boeing Business Jet ( a long range corporate variant of the 737) to help juggle his responsibilities.
Those who have decried Halliburton's alleged "war profiteering" have failed to note the company's stock price and financial results. This business line has been a flop, and the company is in the process of splitting off the KBR Services subsidiary which does the contracting, so it can focus on its strengths in the oil patch.
The move to Dubai was, if anything overdue.
Thomas Lifson is the editor and publisher of American Thinker. He is a former faculty member at Harvard Business School.
Update: Douglas Hanson writes:
While the moonbats wail about a large part of Halliburton's headquarters shift to Dubai, and the planned divesture of its Kellogg, Brown and Root (KBR) subsidiary, it can't hurt to remind Americans of the sacrifices Halliburton/KBR employees have made in supporting the GWOT. As of August, 2005, 43 men and women of KBR had paid the ultimate sacrifice supporting our service members and other civilian staff.
No doubt, that number has gone up since then. Without the courage and dedication of its employees, US forces around the globe would be hard pressed to quickly provide much needed logistics support on a surge basis without having to mobilize a large number of reserve component Soldiers; something that has been problematic since the long war started.
The only good to come out of the hard-core, anti-war left's carping about Halliburton/KBR is that their double standard concerning support contractors is in plain view. For example, it's OK for KBR to support Democrat adventures in Somalia and the Balkans, but heaven forbid if the company supports the fight against Islamo-fascists who have already attacked our homeland. And the Democrats in Congress can draw up grandiose plans to increase troop strength, yet never appropriate money to pay for more Soldiers, and then fail to acknowledge that civilian volunteers lay their lives on the line to fill the need that the Congress has ignored.