Halliburton to move headquarters, CEO to Dubai

By Mohammed Abbas and Anna Driver

MANAMA/HOUSTON (Reuters) - U.S. oil services firm Halliburton Co. (HAL.N) is moving its headquarters and chief executive to Dubai in a move that immediately sparked criticism from some U.S. politicians.

Texas-based Halliburton, which was led by Vice President Dick Cheney from 1995-2000, did not specify what, if any, tax implications the move might entail. It plans to list on a Middle East bourse once it moves to Dubai -- a booming commercial center in the Gulf. The company said it was making the moves to position itself better to gain contracts in the oil-rich Middle East.

"This is an insult to the U.S. soldiers and taxpayers who paid the tab for their no-bid contracts and endured their overcharges for all these years," said judiciary committee chairman Sen. Patrick Leahy, a Vermont Democrat.

Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee, might hold a hearing on the implications, an aide to Waxman said.

Halliburton has drawn scrutiny from auditors, congressional Democrats and the Justice Department for the quality and pricing of its KBR Inc. (KBR.N) unit's work for the U.S. army in Iraq.

"My office will be in Dubai, and I will run our entire worldwide operations from that office," Chief Executive David Lesar said at an energy conference in Bahrain on Sunday. "Dubai is a great business center."

Halliburton, which has long been involved in the Middle East, generated more than 38 percent of its $13 billion in oil-services revenue in the eastern hemisphere last year.

MIDDLE EAST GROWTH

"The company as a whole has continued to diversify internationally, and the Middle East is a point that they have targeted," said William Sanchez, a U.S.-based analyst at Howard Weil Inc.

"They are being opportunistic in putting the CEO in the middle of the action."

Sanchez said he believed Halliburton's move to Dubai was not tax related. Instead he viewed it as a strategic play.

Alan Laws, an analyst at Merrill Lynch, said the move would likely help Halliburton's position in negotiating large contracts.

Halliburton said it would maintain its legal registration in the United States and was not leaving Houston, where it was currently based.

But Lesar told reporters: "At this point in time we clearly see there are greater opportunities in the eastern hemisphere than the western hemisphere."

KBR, the engineering and military-services contractor unit that Halliburton is in the process of splitting off, is the Pentagon's largest contractor in Iraq.