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<H1>Halliburton headquarters leaving U.S.</H1>
<DIV class=storysubhead>The defense contractor's main office will be in Dubai.
It will keep a Houston presence.</DIV>By Richard Verrier<BR>Times Staff
Writer<BR><BR>March 12, 2007<BR><BR>Halliburton Co., the energy services giant
and controversial defense contractor, said Sunday that it was moving its
corporate headquarters from Houston to United Arab Emirates in the Middle
East.<BR><BR>The move to Dubai by the world's second-largest oil-field services
provider was announced by Chief Executive Dave Lesar at an energy conference in
the neighboring Bahrain. <BR><BR>"The Eastern Hemisphere is a market that is
more heavily weighted toward oil exploration and production opportunities, and
growing our business here will bring more balance to Halliburton's overall
portfolio," Lesar said in a statement.<BR><BR>The plan comes amid a major
overhaul at Halliburton, which is spinning off its defense-contracting
subsidiary, KBR Inc., into a separate company. <BR><BR>Halliburton has been
dogged by criticism that it overbilled taxpayers in a multibillion contract to
feed and house U.S. soldiers in Iraq. Last month, federal investigators alleged
Halliburton was responsible for $2.7 billion of the $10 billion in contractor
waste and overcharging in Iraq. The company has strenuously defended its
practices and accused some of its critics of being politically
motivated.<BR><BR>The company's business dealings in Iraq and Nigeria also are
being investigated by the Justice Department and the Securities and Exchange
Commission. The company has said it is cooperating in the investigations.
<BR><BR>The plan for the move surprised longtime critic Rep. Henry A. Waxman
(D-Los Angeles), chairman of the House Committee on Oversight and Government
Reform. He called for hearings on the move, saying, "I want to understand the
ramifications for U.S. taxpayers and national security." <BR><BR>Democrats have
been fiercely critical of the company, which was formerly headed by Vice
President Dick Cheney, but who has not been accused by investigators of any
wrongdoing. <BR><BR>Halliburton provided few details on its pending move but
said it was part of plan to expand the company's business in the Middle East and
other fast-growing markets outside of North America.<BR><BR>The company said it
would keep a corporate office in Houston and would remain legally registered in
the U.S. Nonetheless, Lesar and other executives will be based out of Dubai, the
company said. <BR><BR>"As companies usually refer to the CEO's office as the
corporate headquarters, that's what we are doing," Halliburton spokeswoman
Melissa Norcross said in a statement.<BR><BR>A Halliburton spokeswoman declined
repeated requests to respond to questions about the move, including how many of
its nearly 12,000 employees in Houston would be affected, or when the shift
would occur.<BR><BR>Halliburton would be one of the best known U.S. corporations
to move to Dubai, the Western-friendly boomtown that is rapidly emerging as a
corporate headquarters of the Middle East.<BR><BR>The announcement comes as the
company prepares this month to spin off its KBR military contracting unit, which
has been the focus of heavy criticism from lawmakers for what they have
described as lucrative no-bid contracts in Iraq.<BR><BR>One Washington corporate
lobbyist said: "I think it ensures that there will be some interesting oversight
hearings," since Democrats have already been unhappy with Halliburton's no-bid
contracts and what they believe is its poor performance. <BR><BR>The lobbyist,
who requested anonymity so he would not jeopardize relationships with his
clients, said the move raises several questions, among them how much did
Halliburton receive in incentives to move to Dubai and what does it do to the
company's tax structure. <BR><BR>"If there's a huge tax shift, then it's taking
money from U.S. taxpayers while they're taking no-bid contracts," the lobbyist
said. <BR><BR>He said that he doubted such a move would reduce Halliburton's
legal liability in the U.S., which he said would continue as long as the company
has properties in the nation. <BR><BR>Analysts, however, said business
considerations rather than politics probably drove the decision to
move.<BR><BR>As higher retail gasoline prices show, the energy sector has
struggled to keep pace with soaring demand for oil, especially in India and
China. And many of the new projects to increase production are in the
oil-producing Middle East.<BR><BR>More than 38% of Halliburton's oil-field
services revenue in 2006 came from sources in the Eastern Hemisphere, where the
firm has more than 16,000 of its 45,000 employees.<BR><BR>Dubai could also be
especially attractive to Halliburton because of its favorable tax and business
climate, analysts said. <BR><BR>Even so, the move could be politically risky for
Halliburton, said Anthony Sabino, a law professor at St. John's University in
New York who specializes in oil and natural gas issues. <BR><BR>He cited the
fallout last year after the Bush administration decided to allow Dubai Ports
World, a company from United Arab Emirates to take over operations at several
U.S. ports.<BR><BR>Critics, mainly Democrats, said the deal raised serious
security issues. Dubai Ports subsequently dropped the proposal.<BR><BR>"While
one can see the cogent business reasons for this, it has all the makings of a
public relations nightmare," Sabino said. "This is going to be seized on by
Halliburton's political enemies."</DIV></BODY></HTML>