Halliburton CEO: Oil majors face long wait in Iraq

Reuters ^ | September 3, 2003

[Shermy]

NEW YORK, Sept 3 (Reuters) - Halliburton Co. (NYSE:HAL - news) Chief Executive David Lesar told investors on Wednesday that Iraq holds "enormous opportunity" for energy companies, but cautioned the major Western oil majors face a long wait before they get their turn.

Lesar, who recently returned from a visit to Iraq, said local oil executives there intend to first develop known resources and then to resume negotiations with foreign oil companies under way before the war. Only then will Iraq's oil industry begin pursuing projects with the big global energy producers, he said.

"If you're an oil company, the view is your opportunities in Iraq will be there, but it will be a long time out," Lesar said during an oil and power investor conference in New York. "It will take a long time for Iraq to go through the prospects and contracts they have in hand."

Lesar noted that Iraq's oil leadership remains confident it can restore production to near prewar levels at about 2.5 million barrels per day. Local executives also told Lesar they can use that cash flow and develop known reserves on their own, without multinational partners, he said.

The second step is resolving outstanding contracts with foreign oil companies, though "that is a smaller universe than is widely thought," Lesar said. "After that, they would open new discussions."

Meanwhile, energy services companies -- including Halliburton -- will enjoy immediate opportunities, he said.

"You will see the services companies there before the integrated oil companies," Lesar said. "The bottom line is we are well positioned in Iraq. We are building our capacity and we'll have a strong position in that country for a long time."

The Houston-based company once headed by U.S. Vice President Dick Cheney (news - web sites) has so far won $1.7 billion in Iraq-related contracts.

Halliburton's KBR unit was awarded a $705 million contract for oilfield infrastructure repairs as well as a $900 million Logistics Civil Augmentation Program (LOGCAP) contract, providing U.S. military and government agencies everything from laundry and dining services to mail delivery, plus construction of barracks and other buildings.

The firm also seeks up to $1 billion in other contracts.

However, Lesar added that Iraq's oil industry is hamstrung by damage to its pipelines and refineries, which have been targeted by looters and saboteurs since major combat in the country was declared over four months ago.

Earlier today the head of Iraq's state oil marketing organization (SOMO), Mohammed al-Jibouri, told Reuters Iraq is closing in on prewar capacity from its southern oilfields, but sabotage along the northern Iraq-Turkey pipeline is preventing Baghdad from maximizing exports. (Additional reporting by Peg Mackey and Carolyn Koo)

[Shermy]

Ping.

[Shermy]

Halliburton representing our establishment's view that the plan for Iraq is to go slow?

The "long" time business is nonsense. Where there's a will, there's a way. I wonder if the corps influencing the Admin are gaming to keep up the value of the assets they already control or profit from.

If Russia's let in, that's all folks. They have an inherent conflict of interest as a competitor supplying nation.

[meenie]

It seems to me that the US has an inherent conflict also. The oil was supposed to be for Iraq. They need it build their infastructure.

[El Laton Caliente]

I've worked as a planner/scheduler in the oil & gas business for twenty plus years.

Getting some of the existing facilities back up to speed should not take more than a few months.

Development of NEW oil fields will take years. Would you like to be the company officer who commits your business to a contract investment of $10 of BILLIONS not even knowing if the government your dealing with will honor it next week?

At minimum, to develop a new field takes about two years. First there is survey and testing, then engineering to size pumping and compressing stations, six months to a year to order and fabricate the equipment, then maybe nine months to a year drilling and construction. In the third world, add two months shipping to almost everything.

But first, you have to have a reasonable chance that the other size isn't going to nationalize your $10,000,000,000.00 plus investment.

This is going to take time unless the US government wants to underwrite the effort.

[marron]

local oil executives there intend to first develop known resources and then to resume negotiations with foreign oil companies under way before the war.

Local oil executives intend to continue dealing with France and Russia? While our guys are busy taking lead, their guys have been busy with the suitcases of money.

Meanwhile GW is busy paving the way for France and Russia to come back in with a UN mandate. And he is inviting Pakistan to take over a section of the country, which is to effectively create an Al Qaeda safe haven. Considering they already have Iran and Saudi Arabia as safe haven, what need have we to create yet another?

Pakistan's secret service is riddled with Al Qaeda and Taliban sympathizers, well, lets be clear, ISI is riddled with Al Qaeda and Taliban case officers. If we are going to bring them in, we may as well just shoot ourselves in the head and be done with it. Lets leave France, Russia, and Pakistan out, and force Al Qaeda to continue to go through the formalities of actually sneaking into the country. In the old vampire movies you have to invite the vampire across your threshold. In real life it doesn't work that way, the vampires are coming in until you finish killing them, but its still a good rule of thumb.

[Shermy]

we may as well just shoot ourselves in the head and be done with it.

Might be where the Admin is trending.

I thought they were missing the big picture, but maybe that picture is not the one they like.

[swarthyguy]

Subtext: US Troops ain't going anywhere, least of all back home, anytime soon.

Still maintain they're working as mad behind the scenes to help gas prices next summer by increasing Iraqi oil on the world market.

Now that Russia seems to have become a NeoOpec based on the SaudiRussian agreement to control oil prices. Bet the Russians don't mind oil prices at 30 bucks a barrel.

[mafree]

Follow da oil bump.