Halliburton's involvement in Iraq

International Business

Halliburton Involvement in Iraq

This is paper on Haliburton's involvement in Iraq. There are ten references used for this paper.

Lately, the Halliburton Oil Company has come under fire for its Iraq involvement. It is important to examine the services it provides to those in Iraq and exactly why its practices have been questioned.

Halliburton Oil

Halliburton Oil is a "service firm for the oil and gas industry that currently has more than 24,000 employees and subcontractors in Iraq (Comerford)." The company, which was established in 1919, is based in Houston, Texas and "describes itself as one of the world's largest providers of products and services to the petroleum and energy industries (unknown, 2003)."

The company was "headed by Vice President Richard Cheney before he accepted Bush's invitation to be his running mate in the 2000 presidential election. Cheney is credited with dramatically expanding Halliburton's operations by bringing in billions of dollars in new contracts, but has repeatedly denied any role in company operations after his departure. (unknown, 2003)."

Providing Services

Halliburton has various subcontractors currently providing services in Iraq. These include "Chicago-based Boeing Company which is providing satellite phone services for an estimated $35 million (Comerford)."

Kellogg, Brown and Root

One of Halliburton's more widely known subsidiaries in Iraq is Kellogg, Brown and Root (KBR). This group provides a "wide range of engineering, construction, operations and maintenance, logistics and project management services to three markets: upstream, downstream and government and infrastructure. The upstream sector includes oil and gas production facilities, pipelines, gas processing and liquefied natural gas production facilities and receiving terminals, while the downstream includes oil refining, petrochemicals, synthetic gas and fertilizer production facilities. Infrastructure includes a wide range of facilities and services; including roads, airports, railroads and buildings, and coordinating and planning major events (KBR, (www.halliburton.com)."

Private Over Military

The Defense Department is "contracting out more and more jobs traditionally done by military personnel in order to focus its mission and save money to private companies (Miller)," and currently Halliburton Oil is considered the most prominent private company in Iraq.

In December 2001, KBR bid for, and was awarded, a military contract known as LOGCAP III, which is a "10-year Task Order contract, with a one-year base period and nine one-year options. The contract requires the contractor to deploy within 72 hours of notice and to deliver Combat Support and Combat Service Support (CS/CSS) for 25,000 troops within 15 days. KBR must be ready to furnish these warfighter services 24 hours a day, 7 days a week, 365 days a year under anycondition ((Halliburton successes, (www.halliburton.com)."

KBR improves the quality of life for the soldiers in Iraq by "changing the conditions in which they must live. Instead of lying on the ground and eating MREs, the soldiers are provided with shelter, sleep on cots, and have hot food prepared for them (Halliburton successes, (www.halliburton.com)."

Since winning the contract, Halliburton has proved to be an invaluable asset to the "war effort by delivering soldiers' mail, washing their clothes, providing them with food, toilets and bunks, shipping fuel for tanks, and building conference rooms for generals (Miller)."

In early 2004, Halliburton was also "awarded a $7 billion no-bid contract to help rebuild Iraq (unknown, Halliburton Ties)."

Fighting Fires

In March 2003, the Defense Department awarded KBR the "contract to oversee any firefighting operations at Iraqi oilfields after any U.S.-led invasion (http://www.freerepublic.com/focus/f-news/860023/posts)." This was due to their reputation among those in the oilfield services field and Halliburton's "extensive logistic support work for the U.S. military (http://www.freerepublic.com/focus/f-news/860023/posts)." Boots and Coots International Well Control Inc., an oilwell firefighting company, proved to benefit from this deal due to a 1995 alliance with Halliburton.

Improving Oil Production

Halliburton has worked with the Army Corps of Engineers to assess the oil wells in Iraq. Upon these assessments, Halliburton personnel has successfully "removed more that 46,000 barrels of oil from oil spills between April 2003 and September 2003. After examining more than 600 oil infrastructure facilities in 30 days, the first oil flowed from Iraq's southern oil fields in late April 2003 (Halliburton successes, (www.halliburton.com)." In June 2003, the company exported the first Iraqi oil, and by December 2003, the country was producing "2.4 million barrels a day, surpassing Iraq's prewar oil production levels of 2 million barrels (Halliburton successes, (www.halliburton.com)."

Halliburton began its delivery of fuel to Iraq in May 2003. Since then, the company has been responsible for transporting "gasoline, liquid petroleum gas, diesel and kerosene to support humanitarian efforts for the Iraqi people (Halliburton successes, (www.halliburton.com)."

Year of Hard Work

The employees of Halliburton worked hard from April, 2003 to March, 2004 on their efforts to support the military stationed in Iraq. During that time "they:

Entered Baghdad on April 20, 2003 - eleven days before the end of the war - and immediately began supporting the Coalition Provisional Authority.

Began building permanent facilities for troops in Iraq in May, 2003, performing tasks such as establishing housing facilities, installing hot showers, and opening dining facilities to serve hot meals at 30 sites throughout the country. Within 180 days, KBR delivered and installed 34,000 living container units, 10,000 toilets and 10,000 showers to house 80,000 troops.

Have opened 64 Dining Facilities (DFACs) throughout the Kuwait-Iraq region since May 2003, serving more than 40 million meals.

Processed more than 1 million bundles of laundry.

Hosted close to 5 million people in the Morale, Welfare and Recreation facilities- letting the troops take advantage of breaks in the action.

Collected and disposed of more than 1.5 million cubic meters of trash.

Exterminated more than 8,000 tents and buildings.

Driven roughly 3.3 million miles per month, due to more than 700 trucks on the roads of Kuwait and Iraq at any given time.

Moved and delivered nearly 8 million bags of mail for soldiers.

Transported more than 1.8 billion liters of fuel.

Moved close to one million equipment and supply containers across Kuwait and Iraq.

Hired, mobilized and trained close to 1,500 certified heavy truck drivers to complete the missions (Halliburton successes, (www.halliburton.com)."

The Price of Danger

Iraq is such a dangerous place to work and do business, that companies are finding their basic costs increasing at an enormous pace. "Industry estimates indicate death and dismemberment insurance is up 20 to 40%, and insurance against sabotage is up as much as four fold. Halliburton is offering drivers and other workers $80,000 tax-free for working in Iraq for a year, or up to $120,000 with overtime. A company official said it is continuing to send workers abroad, but the inflated payrolls are part of the price of doing business (Comerford)."

The Most Dangerous Job

Since March 2003 when operations were established, 45 employees of Halliburton or its subcontractors have been killed in Iraq. The most dangerous job is that of "driving a truck. Of the 18 U.S. citizens killed in Iraq while working for Halliburton, 11 were truckers. Recently, Halliburtons' convoys have been taking hits every day on some routes (Miller)."

Some of the dangers that truckers must face on a daily basis are "sniper fire, car bombs, roadside explosions and rocket-propelled grenades. Iraqi insurgents mount ambushes to pick off trucks from behind, while also throwing bricks and dropping 8-foot-long steel pipes from overpasses into the cabs (Miller)."

The drivers must travel through "a landscape of violence and fear, during which they will take fire from Iraqi insurgents, pass through blinding black smoke from roadside fires and be stuck for tense moments on a stretch of highway famous for its ambushes (Miller)."

While the pay is enticing, many of Halliburton's employees are choosing to return home due to dangers they have faced while in Iraq. Drivers have found their trucks literally "blown out from under them (Comerford)," making them vow to never return to the area upon reaching American soil.

High Turnover

Halliburton's employee turnover is high in Iraq, with few making it to the one year mark. It is estimated that of every 20 truckers who sign on for a year of work, only three will last for the year. While the truckers are committed for a year of service, "company policy is to send anyone home who wants out of their one-year contract, no questions asked - but no tax benefits, either (Miller)."

Code of Business Conduct

Halliburton Oil has a strict Health, Safety, and Environmental policy concerning business conduct. The policy "establishes and communicates the Company's policy concerning the protection of the health and safety of the Company's employees and other persons affected by the Company's business activities and protection of the environment with respect to the Company's business activities and operations (http://www.halliburton.com/about/hse.jsp)."

Chow Billing

In April, Halliburton billed the Pentagon "$141 million for feeding U.S. troops in Iraq (unknown, 2004)." Originally the invoices had been delayed due to questionable billing practices by the company, but military auditors were eventually convinced by Halliburton to allow the expenses.

Questions arose when "Pentagon auditors began asking questions about the company's method for predicting how many soldiers might show up to eat. The auditors had questioned bills generated by Saudi subcontractor Tamimi Global Company, which last July billed for 42,042 meals daily at a U.S. base outside Kuwait City, while only serving up 14,053 meals a day (unknown, 2004)."