Halliburton is out of Iran
Halliburton said Monday it has completed all work in Iran and has left the country, making good on an earlier pledge to exit the Middle Eastern nation once it served out its last contracts there.
The announcement comes more than two years after Halliburton said it would depart Iran and as tensions rise between the West and a nation President Bush has identified as part of an "Axis of Evil."
On Monday, Iran drew threats of additional U.N. sanctions and wide condemnation from the West after announcing it had dramatically expanded its nuclear program. Relations are also cooling after Iran held and then released 15 British sailors recently.
Halliburton, along with other U.S. firms such as General Electric Co. and Houston's Dresser-Rand Group, have faced sharp criticism for doing business through affiliates in countries subject to U.S. government sanctions. The company's move to quit Iran now leaves the remaining American companies alone to deal with the political pressures of operating in such countries.
Halliburton, the world's second-largest oil-field services firm behind Schlumberger, said in January 2005 it would not seek new business in Iran and would stay only to honor existing contracts.
Though "minuscule in comparison to the scope of our worldwide activity," the company would leave because the Iran business attracted "a disproportionate share of attention," Halliburton CEO Dave Lesar said in a conference call at the time.
Halliburton did its Iranian business through a foreign subsidiary known as Halliburton Products & Services Ltd., a Cayman Islands-registered company headquartered in Dubai, United Arab Emirates.
Federal law prohibits U.S. companies from trading directly with Iran because of ties to organizations believed to foster terrorism. But foreign units of American firms can operate there, as long as the foreign entity is truly independent of the U.S. business.
...Halliburton announced last month it will open a new corporate headquarters in Dubai and move CEO Lesar there from Houston to focus on expanding its business in the Middle East. Last week, the company completed its separation from KBR, its embattled government contracting and engineering and construction unit, to focus on its more profitable oil-field services business.
The move to Dubai fueled speculation that the company was quietly trying to expand in Iran. Monday's announcement may quell those fears.
U.S. companies in Iran and other sanctioned countries, however, will likely continue to face scrutiny. Among those are several large oil and gas firms in Houston, including Schlumberger.
The company's non-U.S. affiliates provide oil-field services for customers with exploration and production operations in Iran, Schlumberger spokesman Stephen Harris said in an e-mail.
The affiliates operate "lawfully and ethically" and have no intention of leaving the country, Harris said.
...
Baker Hughes, a Houston-based oil-field services firm, announced plans to leave Iran and Sudan in 2005. As of the end of last year the company had "substantially completed" its withdrawal from both countries, company spokesman Gary R. Flaharty said.
Don't hold your breath for the European's to leave. Schlumberger, pronounced "slumber--j" is affiliated with the French. Still, the departure of Haliburton is over due and it should make it more difficult for Iran to maintain its oil business.
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