Halliburton, Vice President Dick Cheney’s alma mater, is going to move its headquarters to Dubai in the United Arab Emirates:
Halliburton, the big energy services company, said today that it would open a corporate headquarters in the United Arab Emirates city of Dubai and move its chairman and chief executive, David J. Lesar, there.
The company will maintain its existing corporate office here as well as its incorporation in the United States.
Although the announcement of the new Dubai arrangement took many by surprise, Halliburton said the move was part of a plan announced in mid-2006 to concentrate its efforts in the Middle East and surrounding areas, where state-owned oil companies represent a growing source of business.
Halliburton, which was led by Vice President Dick Cheney from 1995 to 2000, is currently in the process of spinning off KBR, its military-contracting unit, to focus on its business of drilling wells and maintaining fields for oil companies. The company did not say what implications the Dubai development might have for its Pentagon contracts.
The announcement about the Dubai move, which Halliburton made at a regional energy conference in Bahrain, comes at a time when the company is being investigated by the Justice Department and the Securities and Exchange Commission for allegations of improper dealings in Iraq, Kuwait and Nigeria. Halliburton has also paid out billions in settlements in asbestos litigation.
But the Times notes that it’s highly likely the move is due to business motives, not legal ones:
Halliburton officials did not elaborate today on what the shift of its top executive might mean. The move seemed to raise questions about whether Halliburton might gain tax advantages or other benefits from shifting into a foreign country with pro-business regulations.
On the face of it, the decision to move Mr. Lesar abroad appeared to have less to do with unwelcome headlines than with shifting epicenters for big energy construction projects and exploration from mature fields in North America toward the Middle East and Africa. The move especially underscores the arrival of Dubai as a center for energy deal-making and commerce, a role once solidly filled by Houston.
Company officials put out the news via email and various additional explanations. Note this report from Bloomberg:
“Growing our business here will bring more balance to Halliburton’s overall portfolio,” Lesar, 53, said in the statement. “This is a market that is more heavily weighted toward oil exploration and production opportunities.” Dubai is on the Persian Gulf and is part of the United Arab Emirates, the fourth-biggest OPEC crude-oil producer.
The move won’t affect Halliburton’s legal status as a U.S. company, spokeswoman Melissa Norcross said in an e-mailed statement.
“As companies usually refer to the CEO’s office as the corporate headquarters, that’s what we are doing,” Norcross said. “We will maintain our company’s legal registration in the United States and we are not leaving Houston.”
No matter: expect this move to raise a lot of questions and perhaps generate more controversy.
Joe Gandelman is a former fulltime journalist who freelanced in India, Spain, Bangladesh and Cypress writing for publications such as the Christian Science Monitor and Newsweek. He also did radio reports from Madrid for NPR’s All Things Considered. He has worked on two U.S. newspapers and quit the news biz in 1990 to go into entertainment. He also has written for The Week and several online publications, did a column for Cagle Cartoons Syndicate and has appeared on CNN.