Halliburton, the oil services company formerly run by United States Vice-President Dick Cheney, this week reported soaring revenues from its contracts to help rebuild Iraq.
The company said sales in the third quarter were 39% higher, at $4,1-billion.
Iraq-related work transformed the prospects of its Kellogg Brown & Root subsidiary. The division’s total revenues increased by 80% to $2,3-billion, of which $900-million came from Iraq, and profits grew fourfold to $49-million, of which $34-million was Iraq business.
Boeing, the world’s largest plane maker, and defence contractor North-rop Grumman also enjoyed a war dividend. Boeing raised its revenue guidance for the full year as military sys- tems and aircraft offset the weakness in commercial jets. Northrop, maker of the B-2 stealth bomber, turned a $59-million loss a year ago into a $184-million profit.
Halliburton has been at the centre of a storm over the award of post-war reconstruction contracts in Iraq.
It was given a contract without being forced into a competitive pitch, drawing close scrutiny of its links to the Bush administration. It has already secured business worth $1,3-billion under that award and another $1,4-billion in a separate, competitively bid contract to provide support services to troops.
Cheney ran Halliburton for five years before joining US President George W Bush’s election campaign, receiving a $33-million payoff when he left in 2000. He is still getting $180 000 a year in deferred income.
In the latest controversy, questions have been raised by political opponents about the price Halliburton is charging for trucking fuel into Iraq. Halliburton is charging the army $1,59 a gallon for its oil, but critics say it can be bought from neighbouring countries for as little as $0,98.
Halliburton’s profits in the quarter fell by 38% to $58-million, from $94-million a year earlier. The reason was a $77-million charge related to a courtroom verdict against the company in a civil case in which it was accused it of breaching confidentiality agreements in a Kazakhstan construction project. It also took a charge of $34-million for discontinued businesses.
Boeing profits in the third quarter fell 31% to $256-million, owing to a $184-million charge to cover the costs of shutting down production of its 757 commercial plane. Its defence business was strong. Sales were 12% higher at $7,3-billion, prompting the company to raise its group full year forecasts to $50-billion. — Â