Halliburton has wider Iraq role-- from CNN.com

[AJWatson3]

http://money.cnn.com/2003/05/07/news/companies/halliburton_iraq_con/index.htm

Halliburton has wider Iraq role

Army letter says oil driller unit got distribution rights in noncompetitive oil well fire contract.

May 7, 2003: 10:44 AM EDT

WASHINGTON (CNN) - The Army Corps of Engineers has said a contract awarded without competition to a subsidiary of Halliburton Co. basically gives the company the power to run all phases of Iraq's oil industry .

U.S. Rep. Henry Waxman (D-Calif.), who asked for more details on the Halliburton contract, said, "It now appears ... that the contract with Halliburton -- a company with close ties to the administration -- can include 'operation' of Iraqi oil fields and 'distribution' of Iraqi oil."

Officials previously had said the multimillion-dollar contract only dealt with putting out oil well fires and performing emergency repairs as needed.

But responding to Waxman, Lt. Gen. Robert Flowers of the U.S. Army Chief of Engineers said the company would: put out oil well fires and assess the facilities; clean up oil spills or other environmental dangers at the sites; repair or reconstruct damaged infrastructure; operate facilities; and distribute products.

The awarding of the contract in March prompted some lawmakers, including Waxman, to question whether the administration's deep ties with Halliburton helped secure the contract -- charges the White House has denied.

And the Army has promised it will eventually issue a new contract, subject to an open bidding process, for longer-term work in Iraq. That may be why Halliburton's competitors haven't joined the chorus of criticism about the contract; they're likely hoping for a piece of the action.

Vice President Dick Cheney was CEO of Halliburton from 1995-2000. Cheney sold all his shares of Halliburton during the presidential election of 2000, and he has promised to give to charity any profit from Halliburton stock options he still owns. He is still paid a set amount by Halliburton every year, but he's guaranteed that money even if Halliburton goes bankrupt.

"[Cheney] has nothing at all to do with awarding these contracts, the bidding process or the current work orders," a Cheney spokeswoman said.

Waxman had written Flowers seeking answers as to why the contract has "no set time limit and no dollar limit and is apparently structured in such a way as to encourage the contractor to increase its costs and, consequently, the costs to the taxpayer." Waxman has said the contract to Kellogg Brown & Root (KBR) could be worth up to $7 billion over two years.

In his response, Flowers said that sum was based on the "worst scenario" that a large proportion of Iraq's 1,500 wells would be set ablaze, and that there would be "massive intentional oil spills and pollution resulting from the fires." It turned out only a few oil wells were set ablaze during the war.

Flowers said "task orders are placed only for work that is required in the near term."

"For each order, the government establishes the scope of work and estimated cost. The scope of work is presented to the contractor, who prepares its technical and cost proposal for accomplishing the work," wrote Flowers.

He did not give an overall dollar amount on the contract.

Halliburton has said accusations that it received preferential treatment were off-base. It has said KBR is the only contractor that could implement the complex contingency plan.

In a March press release, Halliburton said once the oil well fires were put out, it would "provide for the continuity of operations of the Iraqi oil infrastructure."

[Golgo-13]

I should have bought stock earlier. :doh:

[jbooma]

The funny thing is also reported on MSNBC, Halliburton will be leaving soon since the job is almost done.

"But because war damage was limited, Halliburton’s contract will end much sooner than expected, according to Lt. Col. Eugene Pawlik at the U.S. Army Corp of Engineers, which is currently in charge of rebuilding Iraq’s oil industry. After a full assessment of the damage is completed, competitive bids for repair work will be posted on the government’s Fedbizopps Web site, he said."

Iraq will have control over the oil when all is said and done. Then they will sell it to all the other companies who are lining up right now.

[AJWatson3]

I believe the article said something different from that:

"The Army Corps of Engineers has said a contract awarded without competition to a subsidiary of Halliburton Co. basically gives the company the power to run all phases of Iraq's oil industry .

U.S. Rep. Henry Waxman (D-Calif.), who asked for more details on the Halliburton contract, said, "It now appears ... that the contract with Halliburton -- a company with close ties to the administration -- can include 'operation' of Iraqi oil fields and 'distribution' of Iraqi oil."

Officials previously had said the multimillion-dollar contract only dealt with putting out oil well fires and performing emergency repairs as needed."

As of now there is no bidding process, although the Army says it was planning to do so. Basically this article is a contradiction of that release and the post that jbooma made... I wish they would get all there stories on the same page.

Wait a bit longer and we will see what happens, including whether or not other companies get a shot at some of the most lucrative work over there.... we at least need an appearance of being fair and unbiased in the awarding of contracts.