In our capitalist system, Halliburton ostensibly does what’s best for Halliburton. No doubt… Halliburton (aka HAL on Wall Street) has announced it’s moving its corporate headquarters from Houston to Dubai, part of the United Arab Emirates.
This is “richly” ironic on several levels. Halliburton’s current CEO, Dave Lessar, announced in Bahrain that the company wished to be closer to its growing business interests in Asia:
“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.”
Balance? As the CNBC talking heads might speculate (for other companies), the statement deserves heavy “discounting.” Halliburton has other reasons for getting out of Dodge.
Remember Halliburton? This is the same oil services giant, ostensibly once run (poorly) by Vice President Dick Cheney. This same Halliburton is widely suspected of underhanded abuse of its connection to Cheney to obtain over $25 billion in lucrative, often no-bid contracts in Iraq.
Ok, sure, 38% of Halliburton’s business now comes from “the eastern hemisphere” – including Iraq… Is this new? Or is something wrong with the airport in Houston?
Just last month, Halliburton was cited by US investigators as responsible for as much as $2.7 billion of an estimated $10 billion in contractor fraud and abuse in Iraq. And last year, Halliburton made $2.3 billion in profits, though profits were down 40% last quarter.
I venture a guess that Halliburton’s reputation with the American people is right down there with Enron.
HAL’s share price is down about 25% off of its highs from last year. To be fair, the Wall Street oil services index is also off about 18% from its high.
Yet shareholder and political heat has been building at HAL. So why not get the exit underway before the party is…voted fully out of office?
On the other side of this intriguing move, remember Dubai? Dubai is the remarkable Arab trading hub that has mushroomed dramatically as a trading portal in all directions, especially to the north with Iran and to the Caspian region beyond.
Dubai is also very tax friendly to foreign corporations. It’s the Delaware of the Arab world.
And remember Dubai Ports World, the international conglomerate that, with Bush family backing, wished to invest heavily in six major American ports? “The Lobby” helped force DPW to agree to sell off those investments last year, on the rather specious argument that DPW, an Arab based company, might not be trustworthy in defending against terrorism. DPW recently threatened to reverse its decision, claiming that the New York Port Authority was trying to blackmail it.
Anybody want to put two and two together here?