Iraq war boosts Halliburton profits

Controversial US oil and services group Halliburton has said that its contracts in Iraq had helped boost its turnover by about 80% in the first three months of the year.

    The company says it is determined to stay in Iraq

    Support work to US military operations and US-funded reconstruction projects made up $2.1 billion out of the company's $5.5 billion of revenue in the first quarter, the Houston-based group said in a statement on Wednesday.

    The contracts also contributed $32 million of operating profit to Halliburton, which was run from 1995 to 2000 by Vice President Dick Cheney.

    The Defence Department is investigating some of the work of Halliburton and its Kellogg, Brown and Root subsidiary following allegations of overcharging. The group has seen 34 workers killed in Iraq since the US invasion last year.

    But Halliburton said it was determined to stay in Iraq.

    'Committed'

    Chief executive Dave Lesar said "we are committed to honour our contracts and I am extremely proud of the tenacity, the courage and sacrifice of our employees in Iraq. In the face of a hostile environment, KBR performs well."

    Halliburton is involved in oil
    operations in Iraq as well

    "I am disappointed that the allegations, by politicians and in the media, have increased security risks for our employees," he said. 

    "We are uniquely qualified to provide military logistical support. We have been doing that for 60 years," Lesar told a conference call.

    "We continue to see improvement in the energy services business. While oilfield activity and pricing was essentially flat until late in the first quarter, we are beginning to see signs that customer spending and pricing for our services are improving," Lesar added.

    Billion dollar contracts
     
    Halliburton, mainly through KBR, has about six billion dollars worth of contracts in Iraq, mainly for logistics - food supplies for troops, base construction and fuel deliveries. It is also helping to rebuild the Iraq oil industry.

    It employs about 20,000 people in Iraq, directly or through sub-contractors.

    On top of the 34 dead, truck driver Thomas Hammill is held hostage in Iraq and two others are missing.

    Lesar said the value of the contracts hit a peak in the first quarter and would fall from now on, especially after the 30 June handover of power by the US-led occupation in Iraq.

    Halliburton said its overall revenues were about 80% higher than the first quarter of 2003 thanks to KBR's engineering and construction work in the Middle East. It said energy services revenues were up 13%.

    Consolidated operating profit was $175 million in the first quarter against $142 million in the same period last year.

    Halliburton recorded a $65 million loss because of funds put in to pay for compensation for asbestos workers.


    SOURCE: AFP


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