Oil in Iraq

Clare Whitbeck · 08-11-2003, 12:48 PM

Here's an article in rebuilding the Iraqi oil fields. Oil is a major concern in Iraq. Halliburton is or was Dick Cheny's company.
Clare

Rivals Say Halliburton Dominates Iraq Oil Work
By Neela Banerjee
New York Times

Friday 08 August 2003

The Bechtel Group, one of the world's biggest engineering and construction companies, has dropped out of the running for a contract to rebuild the Iraqi oil industry, as other competitors have begun to conclude that the bidding process favors the one company already working in Iraq, Halliburton.

After the United States Army Corps of Engineers quietly selected Halliburton in the spring to perform early repairs of the Iraqi oil business in the aftermath of the war, other companies and members of Congress protested that the work should have been awarded through competitive bidding.

Halliburton's role in the rebuilding has been under political scrutiny because the company was formerly headed by Vice President Dick Cheney. But the Bush administration and the Corps of Engineers, which is overseeing the Iraqi oil reconstruction effort, have repeatedly said that Halliburton has no inside track.

Preliminary plans for a new contract, which industry executives had thought might total $1 billion, were announced late in June by the Corps of Engineers. The bidding was meant, in part, to introduce competition and a sense of fairness into the lucrative Iraqi reconstruction market, an executive with a major engineering concern said. Like many industry executives, he would speak only on condition of anonymity because his company does not want to jeopardize its chances for future government contracts.

But in the last month, the corps, which is overseeing the reconstruction efforts, has specified a timetable for the work that effectively means that the value of any contract companies other than Halliburton could win would be worth only about $176 million, according to Corps of Engineers documents and executives in the engineering and construction business.

Earlier this week, Bechtel cited the timetable as its reason for dropping out of the bidding. The company now plans to deal directly with the Iraqi oil ministry for future reconstruction work, a spokesman, Howard N. Menaker, said.

Although the oil ministry and the Army Corps of Engineers nominally cooperate, industry analysts say the Americans have the upper hand.

Officials of the Corps of Engineers did not return numerous phone calls yesterday seeking comment on the contract. But last month, in response to questions from other companies about Halliburton's role, the corps said on its Web site that all potential bidders had received the same information to "eliminate any competitive advantage" Halliburton might have from its involvement in the Iraqi reconstruction work so far.

A spokeswoman for Halliburton, Wendy Hall, would not discuss whether its engineering unit, Kellogg Brown & Root, would bid, saying only that "we will evaluate the opportunity."

After indicating in June that it planned to solicit bids, the Corps of Engineers held a conference of prospective bidders in Dallas on July 14. Records of the meeting show that it was attended by some of the most experienced engineering and construction companies in the world - including, besides Halliburton and Bechtel, Fluor, the Parsons Group, Schlumberger and Foster Wheeler.

Among those companies, only Fluor and Parsons have indicated so far that they plan to make bids by the Aug. 14 deadline. A winner will be announced by Oct. 15, according to the Corps of Engineers.

At the meeting and in the initial request for proposals, the Corps of Engineers put forth what the industry calls "an indefinite quantity, indefinite delivery" contract. Industry executives said they were told there could in fact be two principal contracts, one for the oil industry in northern Iraq and the other for the south. The value of each contract could range from $500,000 to $500 million over several years, according to the Corps of Engineers, which cited the continued instability in Iraq as a reason for keeping the terms so vague.

A transcript of the July meeting shows that bidders were concerned even then that Halliburton would have a competitive advantage over other companies because it was already working with the Corps of Engineers in Iraq and helping to assess the repairs needed at oil production sites and pipelines after the war and years of an economic embargo.

The corps denied that such a conflict of interest existed, according to the transcript.

Over the last three weeks, however, the Corps of Engineers has provided additional information to bidders indicating that by the July meeting, it and Halliburton already had a fairly clear understanding of the scope and financial value of the work to be done and the timetable for completing it.

The newly released information indicates that a week before the Dallas meeting, the Corps of Engineers and Halliburton participated in a large workshop in Baghdad that also included representatives of the Iraqi oil ministry and the ruling Coalition Provisional Authority to draw up a detailed plan for rebuilding much of the Iraqi oil industry by the end of March 2004.

A week ago, the Corps of Engineers Web site carried an amendment to the contract proposal, saying that 220 projects, mostly at installations above the ground, must be completed for Iraq's oil production to reach prewar levels. The projects are divided into three phases, with a total estimated cost of $1.14 billion.

But the corps notes in the plan that the first two phases, which together would require about $967 million in investments, would have to be completed by Dec. 31.

Halliburton's competitors worry that if the winner of the new contracts is not announced until Oct. 15, that company could not even begin the work before year's end. The only company that could do the work based on that timetable is Halliburton, its competitors say.

Only the third and final phase, worth about $176 million and requiring the work to be completed by March 31, could realistically be performed by a Halliburton competitor, its rivals say.

"The feeling at our company was `Yes, Halliburton is the incumbent, but we had an opportunity there,' " a representative of another engineering concern said. "But if we had believed that from the beginning we had no chance of winning this, we wouldn't have bid."

Responding to pointed questions about the timetable by potential bidders, the Corps of Engineers' Web site said the proposed schedule was "not intended to change anything" about the bidding process.

For its part, the Kellogg Brown & Root unit of Halliburton will do whatever work the corps gives it, Ms. Hall, the spokeswoman, said.

"It is not known at this time how or if the future award of another Corps of Engineers contract will affect current K.B.R. operations or the terms and conditions of its contract," she said.

The first wave of Halliburton employees arrived in Iraq in March, to oversee the extinguishing of several oil well fires near Basra. Since then, its responsibilities, under the direction of the Corps of Engineers, have expanded from its initial job of making emergency repairs.

Working in Iraq has helped turn around Halliburton's financial performance, its second-quarter results showed. The company made a profit of $26 million, in contrast to a loss of $498 million in the period a year earlier. The company stated that 9 percent, or $324 million, of its second-quarter revenue of $3.6 billion came from its work in Iraq.

vraiblonde · 08-11-2003, 02:10 PM

I would sure love to know what Cheney has to do with war in Iraq. I was unaware that a VP has the power to authorize military action.

SmallTown · 08-11-2003, 02:20 PM

Quote:

Originally posted by vraiblonde
I would sure love to know what Cheney has to do with war in Iraq. I was unaware that a VP has the power to authorize military action.

Even on some far off hypothetical situation, you couldn't possible see where there is a conflict of interest here involving people with power, regardless of their "rank"?

vraiblonde · 08-11-2003, 03:10 PM

Quote:

Originally posted by SmallTown
Even on some far off hypothetical situation, you couldn't possible see where there is a conflict of interest here involving people with power, regardless of their "rank"?

Then we should abolish people with power. I always expect a certain amount of cronyism when it comes to politics or anything else, for that matter. I was probably the only person in the US who wasn't outraged that Clinton fired all the travel office people and stuck his pals in there. The Billy Dale thing was uncalled for, but cronyism is to be expected.

What Clare and other Blood For Oil-ers are insinuating is that the ONLY reason we went to war with Iraq was so Halliburton could make a zillion $$$ rebuilding the country. And that's simply ridiculous. Neither Cheney NOR Bush have the power to declare war. And Congress voted on it fair and square, with bi-partisan support.

Elle · 08-11-2003, 03:18 PM

Quote:

Originally posted by vraiblonde
Neither Cheney NOR Bush have the power to declare war. And Congress voted on it fair and square, with bi-partisan support.

OK, time to go really

but you've bought up this point a few times and this one question always bothers me. How can we call someone that doesn't have this power our commanding chief?

08-11-2003, 03:29 PM

After working as a government contractor for 16 years I am very surprised that anyone is surprised by any of this. Crap like this happens all the time! There are pet contractors everywhere, and they will make sure that contract requirements favor them. I worked on one proposal where the incumbant had written the contract requirements to meet exactly the personnel and the physical location they already had. There was no way that any other company could meet the requirements.

I'm sure Haliburton is going to work with whoever the contract issuer is to make sure that the RFP favors them. That's the way that business is done, regardless of whether you're selling oil services or bullets.

Those companies that are complaining are just setting themselves up to make a challenge of the award because that's cheaper and easier than doing the upfront work and making the investments that Haliburton has made.

There's nothing new here.

vraiblonde · 08-11-2003, 03:48 PM

Quote:

Originally posted by tys_mommy
How can we call someone that doesn't have this power our commanding chief?

Umm....because it's in the Constitution? Only Congress has the power to declare war - it's too important of a decision to leave it to just one person.

SmallTown · 08-11-2003, 03:52 PM

Quote:

Originally posted by vraiblonde
Umm....because it's in the Constitution? Only Congress has the power to declare war - it's too important of a decision to leave it to just one person.

We haven't had a decleration of war in awhile

vraiblonde · 08-11-2003, 04:09 PM

Quote:

Originally posted by SmallTown
We haven't had a decleration of war in awhile

True, but Congress did vote to allow Bush to do as he saw fit with Iraq, knowing full well what was going to happen. Bush didn't just take it upon himself. Congress did a little CYA maneuver so the Dems could say, with some truth, that THEY never authorized the war.

Remember the video to Land of Confusion? Where they show Ronald Reagan accidentally setting off a nuke? I always thought that was the most ignorant thing I ever saw but you'd be surprised how many people think that's actually how it happens. The Prez gets a wild hair and pulls the trigger.

*Ken King* ^(Premo) · 08-11-2003, 05:27 PM

I’m sure almost all of us know that Cheney was employed by Halliburton, but he divested himself of all interest in that company, the largest U.S. oilfield services company, after the 2000 election.

Remembering the oil well fires from Gulf War I, and the amount of work getting Kuwait squared away, the administration had the Corps of Engineers let contracts prior to hostilities in preparation for more of the same. I don’t find it amazing or unusual to have the largest company in our nation for this type of work getting the contract.

Could some see it as a conflict of interest? I’m sure they could, but I just don’t see how as Cheney divested his interests in that company. It looks like the government got the company most capable of performing the work. I’m sure Cheney still has contacts with Halliburton, but if he didn’t obtain any direct benefit from this work, how could it be a conflict of interest?

As to the powers of the Commander-in-Chief, with regard to the War Powers Resolution, the President may “introduce United States Armed Forces into hostilities, or into situations where imminent involvement in hostilities is clearly indicated by the circumstances, are exercised only pursuant to
(1) a declaration of war,
(2) specific statutory authorization, or
(3) a national emergency created by attack upon the United States, its territories or possessions, or its armed forces.”
In this case he had specific statutory authorization.

08-11-2003, 12:48 PM	#1 (permalink)
Clare Whitbeck Registered User Member Since: Jan 2003 Location: leonardtown Posts: 55	Oil in Iraq Here's an article in rebuilding the Iraqi oil fields. Oil is a major concern in Iraq. Halliburton is or was Dick Cheny's company. Clare Rivals Say Halliburton Dominates Iraq Oil Work By Neela Banerjee New York Times Friday 08 August 2003 The Bechtel Group, one of the world's biggest engineering and construction companies, has dropped out of the running for a contract to rebuild the Iraqi oil industry, as other competitors have begun to conclude that the bidding process favors the one company already working in Iraq, Halliburton. After the United States Army Corps of Engineers quietly selected Halliburton in the spring to perform early repairs of the Iraqi oil business in the aftermath of the war, other companies and members of Congress protested that the work should have been awarded through competitive bidding. Halliburton's role in the rebuilding has been under political scrutiny because the company was formerly headed by Vice President Dick Cheney. But the Bush administration and the Corps of Engineers, which is overseeing the Iraqi oil reconstruction effort, have repeatedly said that Halliburton has no inside track. Preliminary plans for a new contract, which industry executives had thought might total $1 billion, were announced late in June by the Corps of Engineers. The bidding was meant, in part, to introduce competition and a sense of fairness into the lucrative Iraqi reconstruction market, an executive with a major engineering concern said. Like many industry executives, he would speak only on condition of anonymity because his company does not want to jeopardize its chances for future government contracts. But in the last month, the corps, which is overseeing the reconstruction efforts, has specified a timetable for the work that effectively means that the value of any contract companies other than Halliburton could win would be worth only about $176 million, according to Corps of Engineers documents and executives in the engineering and construction business. Earlier this week, Bechtel cited the timetable as its reason for dropping out of the bidding. The company now plans to deal directly with the Iraqi oil ministry for future reconstruction work, a spokesman, Howard N. Menaker, said. Although the oil ministry and the Army Corps of Engineers nominally cooperate, industry analysts say the Americans have the upper hand. Officials of the Corps of Engineers did not return numerous phone calls yesterday seeking comment on the contract. But last month, in response to questions from other companies about Halliburton's role, the corps said on its Web site that all potential bidders had received the same information to "eliminate any competitive advantage" Halliburton might have from its involvement in the Iraqi reconstruction work so far. A spokeswoman for Halliburton, Wendy Hall, would not discuss whether its engineering unit, Kellogg Brown & Root, would bid, saying only that "we will evaluate the opportunity." After indicating in June that it planned to solicit bids, the Corps of Engineers held a conference of prospective bidders in Dallas on July 14. Records of the meeting show that it was attended by some of the most experienced engineering and construction companies in the world - including, besides Halliburton and Bechtel, Fluor, the Parsons Group, Schlumberger and Foster Wheeler. Among those companies, only Fluor and Parsons have indicated so far that they plan to make bids by the Aug. 14 deadline. A winner will be announced by Oct. 15, according to the Corps of Engineers. At the meeting and in the initial request for proposals, the Corps of Engineers put forth what the industry calls "an indefinite quantity, indefinite delivery" contract. Industry executives said they were told there could in fact be two principal contracts, one for the oil industry in northern Iraq and the other for the south. The value of each contract could range from $500,000 to $500 million over several years, according to the Corps of Engineers, which cited the continued instability in Iraq as a reason for keeping the terms so vague. A transcript of the July meeting shows that bidders were concerned even then that Halliburton would have a competitive advantage over other companies because it was already working with the Corps of Engineers in Iraq and helping to assess the repairs needed at oil production sites and pipelines after the war and years of an economic embargo. The corps denied that such a conflict of interest existed, according to the transcript. Over the last three weeks, however, the Corps of Engineers has provided additional information to bidders indicating that by the July meeting, it and Halliburton already had a fairly clear understanding of the scope and financial value of the work to be done and the timetable for completing it. The newly released information indicates that a week before the Dallas meeting, the Corps of Engineers and Halliburton participated in a large workshop in Baghdad that also included representatives of the Iraqi oil ministry and the ruling Coalition Provisional Authority to draw up a detailed plan for rebuilding much of the Iraqi oil industry by the end of March 2004. A week ago, the Corps of Engineers Web site carried an amendment to the contract proposal, saying that 220 projects, mostly at installations above the ground, must be completed for Iraq's oil production to reach prewar levels. The projects are divided into three phases, with a total estimated cost of $1.14 billion. But the corps notes in the plan that the first two phases, which together would require about $967 million in investments, would have to be completed by Dec. 31. Halliburton's competitors worry that if the winner of the new contracts is not announced until Oct. 15, that company could not even begin the work before year's end. The only company that could do the work based on that timetable is Halliburton, its competitors say. Only the third and final phase, worth about $176 million and requiring the work to be completed by March 31, could realistically be performed by a Halliburton competitor, its rivals say. "The feeling at our company was `Yes, Halliburton is the incumbent, but we had an opportunity there,' " a representative of another engineering concern said. "But if we had believed that from the beginning we had no chance of winning this, we wouldn't have bid." Responding to pointed questions about the timetable by potential bidders, the Corps of Engineers' Web site said the proposed schedule was "not intended to change anything" about the bidding process. For its part, the Kellogg Brown & Root unit of Halliburton will do whatever work the corps gives it, Ms. Hall, the spokeswoman, said. "It is not known at this time how or if the future award of another Corps of Engineers contract will affect current K.B.R. operations or the terms and conditions of its contract," she said. The first wave of Halliburton employees arrived in Iraq in March, to oversee the extinguishing of several oil well fires near Basra. Since then, its responsibilities, under the direction of the Corps of Engineers, have expanded from its initial job of making emergency repairs. Working in Iraq has helped turn around Halliburton's financial performance, its second-quarter results showed. The company made a profit of $26 million, in contrast to a loss of $498 million in the period a year earlier. The company stated that 9 percent, or $324 million, of its second-quarter revenue of $3.6 billion came from its work in Iraq. __________________ Democracy is a verb.
	[ Reply w/Quote ]

08-11-2003, 03:29 PM	#6 (permalink)
Bruzilla Posts: n/a	After working as a government contractor for 16 years I am very surprised that anyone is surprised by any of this. Crap like this happens all the time! There are pet contractors everywhere, and they will make sure that contract requirements favor them. I worked on one proposal where the incumbant had written the contract requirements to meet exactly the personnel and the physical location they already had. There was no way that any other company could meet the requirements. I'm sure Haliburton is going to work with whoever the contract issuer is to make sure that the RFP favors them. That's the way that business is done, regardless of whether you're selling oil services or bullets. Those companies that are complaining are just setting themselves up to make a challenge of the award because that's cheaper and easier than doing the upfront work and making the investments that Haliburton has made. There's nothing new here.
	[ Reply w/Quote ]

08-11-2003, 05:27 PM	#10 (permalink)
Ken King ^(Premo) Oldtimer Member Since: Feb 2001 Location: On the road again Posts: 13,101	I’m sure almost all of us know that Cheney was employed by Halliburton, but he divested himself of all interest in that company, the largest U.S. oilfield services company, after the 2000 election. Remembering the oil well fires from Gulf War I, and the amount of work getting Kuwait squared away, the administration had the Corps of Engineers let contracts prior to hostilities in preparation for more of the same. I don’t find it amazing or unusual to have the largest company in our nation for this type of work getting the contract. Could some see it as a conflict of interest? I’m sure they could, but I just don’t see how as Cheney divested his interests in that company. It looks like the government got the company most capable of performing the work. I’m sure Cheney still has contacts with Halliburton, but if he didn’t obtain any direct benefit from this work, how could it be a conflict of interest? As to the powers of the Commander-in-Chief, with regard to the War Powers Resolution, the President may “introduce United States Armed Forces into hostilities, or into situations where imminent involvement in hostilities is clearly indicated by the circumstances, are exercised only pursuant to (1) a declaration of war, (2) specific statutory authorization, or (3) a national emergency created by attack upon the United States, its territories or possessions, or its armed forces.” In this case he had specific statutory authorization. __________________ No more Mr. Nice Guy.
	[ Reply w/Quote ]

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