Halliburton set to begin work in Iran
By Lisa Sanders, CBS.MarketWatch.com
Last Update: 4:14 PM ET Jan. 11, 2005
DALLAS (CBS.MW) -- Halliburton, under investigation for its operations in Iran, is set to begin oilfield services work in that country as a subcontractor for Oriental Kish, a spokeswoman said Tuesday.
Halliburton shares closed at $38.19, up 35 cents.
Halliburton (HAL: news, chart, profile) spokeswoman Wendy Hall said that she did not know the value of the contract and noted that Oriental had won the contract, not Halliburton. Halliburton's products-and-services division is to help Oriental Kish, which is based in Iran, develop the South Pars natural-gas field.
"Halliburton's business is clearly permissible under applicable U.S. laws and regulations," Hall said. "Also, we are in the service business, not the foreign-policy business. We have followed and will continue to follow applicable laws."
She added that Halliburton has no ownership in Oriental Kish and had played no role in its creation.
Because of Iran's suspected links to terrorism, U.S. companies are severely restricted in their dealings with the country. The 1996 Iran-Libya Sanctions Act limits companies to an investment of $20 million or less a year in Iran's oil and gas sectors, according to the U.S. Energy Information Administration.
However, "separately incorporated foreign subsidiaries are not included in the definition of U.S. persons under the current Iranian executive order," a U.S. Treasury official said. "If a U.S. person is involved, that person may be in violation of the sanctions."
The Halliburton unit is registered in the Cayman Islands as Halliburton Products and Services.
"These entities and activities are staffed and managed by non-U.S. personnel," Hall said.
In July, the company said in a regulatory filing that a federal grand jury was investigating Halliburton operations in Iran. See archived story.
Iran, with 10 percent of the world's proven oil reserves, is OPEC's second-largest oil producer. It's also second in the world to Russia in terms of largest natural-gas reserves, the EIA said.
The EIA estimated the South Pars field is the world's largest gas field, with 280 trillion to 500 trillion cubic feet of natural gas and more than 17 billion barrels of liquids. With about $15 billion in investment, the field is Iran's largest energy project, the EIA said.
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