5/22/2008

US: Halliburton CEO says Dubai base the 'right decision'

Halliburton will "continue to have many, many employees in Houston" and remain a U.S. company for tax purposes even though it opened a second headquarters last year in Dubai in the United Arab Emirates, CEO Dave Lesar said Wednesday.

However, he maintained it was the "right decision" to establish an overseas base for Halliburton as the oil and gas industry continues to grow outside the U.S.

"I believe it's necessary for Halliburton to go where the reserves are," he said. "That's where our future business is going to be."

Even so, the company has more than 5,700 employees in the Houston area and has said it plans to do more hiring here and around the world.

Lesar made the comments in response to a question from a stockholder during what otherwise was a quiet and brief annual meeting of the company's shareholders Wednesday at the Houstonian Hotel, Club and Spa.

The stockholder questioned the motives for the move to Dubai, suggesting it was designed to dodge paying U.S. taxes or escape blame for past wrongs, accusations Lesar denied.

"I'm not sure who this company owes its allegiance to," said John Harrington, head of Napa, Calif.-based Harrington Investments, which engages in shareholder activism. "Who are we? We don't even have a country anymore."

Halliburton remains a target for criticism even though it has spun off its KBR unit, which handles military contracts in Iraq and elsewhere. But it was clear Wednesday that the company is not the lightning rod it used to be.

Though security was heavy, no more than seven protesters gathered outside the meeting, a far cry from the circuslike atmosphere seen at Halliburton meetings in the past.

Standing on Post Oak Lane, they held up two large banners reading " Halliburton Rapes" as shareholders pulled out of the Houstonian's driveway. The signs were a reference, the group said, to the company's war profiteering, poor environmental record and human rights abuses.

Katie Heim, with peace group Codepink, said the small turnout of protesters was attributable to a variety of factors. Some activists have moved away. The presidential election is occupying others. And there are "momentum issues" with the anti-war movement, she said.

Heim wondered if the protest at last year's meeting in The Woodlands might have been "our last hurrah."

"You just get tired after a while," she said.

The company, through its former KBR unit, once had a contract valued at more than $20 billion to support the U.S. military in the Middle East. Some Halliburton critics believe Vice President Dick Cheney, former CEO of Halliburton , helped steer the business to his old employer.

But in April of last year, Halliburton severed the last of its ties to KBR to focus on its more profitable oil field services business.

KBR, which still does work in Iraq, has not attracted the same attention from activists since it split from Halliburton . Earlier this month, at KBR's annual meeting, not one protester showed.

Halliburton 's meeting Wednesday also did not attract many stockholders รข€” just 20 attended. A short agenda of business took less than 30 minutes.

Stockholders elected all 10 nominees to the board of directors, ratified the selection of KPMG as the company's accountant for 2008 and renewed an executive compensation plan created in 1993.

The stockholders also considered three shareholder proposals. One called for a review of the company's human rights policies, a second concerned disclosure of political contributions and the third proposed the creation of a board committee on human rights. All three failed.

Halliburton 's board of directors met separately after the shareholder meeting and declared a 2008 second-quarter dividend of 9 cents a share.

In 2007, Halliburton earned $3.5 billion, up from $2.3 billion the year before, after revenues climbed nearly 18 percent to $15.3 billion. Strong commodity prices have increased demand for its energy services.

Halliburton directors are expected to decide soon whether to make a rival bid to buy England's Expro International Group.

Earlier this month, Expro, a maker of deep-sea well-testing equipment, agreed to be acquired by an investor group led by Candover Partners, a European private equity firm, and that includes U.S. investment bank Goldman Sachs.

Halliburton has had discussions with Expro but has not said if it will top Candover's $3.2 billion offer.

On Wednesday, Halliburton officials again declined to comment..

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[Source: CorpWatch

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