Halliburton Moving C.E.O. From Houston to Dubai

Form the NY Times [via Patrick]

Halliburton, the big energy services company, said on Sunday that it would open a corporate headquarters in the United Arab Emirates city of Dubai and move its chairman and chief executive, David J. Lesar, there.

The company will maintain its existing corporate office here as well as its legal incorporation in the United States, meaning that it will still be subject to domestic laws and regulations.

Although the announcement of the new Dubai arrangement took many by surprise, Halliburton said that the move was part of a strategy announced in mid-2006 to concentrate its efforts in the Middle East and surrounding areas, where state-owned oil companies represent a growing source of business.

Halliburton, which was led by Vice President Dick Cheney from 1995 to 2000, is currently in the process of spinning off KBR, its military contracting unit, to focus on its business of drilling wells and maintaining fields for oil companies. The company did not say what implications the Dubai development might have for its military contracts. Lea Anne McBride, a spokeswoman for Mr. Cheney, referred questions about the company’s plans to Halliburton.

The Dubai announcement, which Halliburton made at a regional energy conference in Bahrain, comes at a time when the company is being investigated by the Justice Department and the Securities and Exchange Commission over allegations of improper dealings in Iraq, Kuwait and Nigeria. Halliburton has also agreed to pay billions of dollars in settlements in asbestos litigation.

Read the full article here.

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2 responses to “Halliburton Moving C.E.O. From Houston to Dubai

  1. Halliburton is allocating its resources where it has extensive comparative advantage using all its factors of production. Labor is cheap, Capital is manageable, Land is in aboundance, and technology is rapidly changing. With cheap labor and no union contract, the firm will cut all the “red tape”, minimize costs while miximizing profits. Capital can easily be obtained at a reasonable price with little or no negotiation. Land which includes oil and other minerals resources will be very easy to reach, hence proving to be one of the factors for allocating the headquarters in Dubai.

    Some of the cautions may be the country’s beliefs due to its culture and religion. Beliefs may cause cultural shocks which may lead to cultural conflicts. Its religion calls for doing business in certain rigid ways and forbids some other options that may be of Halliburton’s interest and ways of doing business.

    I think that this is a gradual move that will ultimately be the only headquarter. Overall, Halliburton will be better off allocating its headquarters in Dubai.

  2. Emmarex Okhakhu

    Dubai, an already fast growing economy stands to gain from this move. Indeed, this is a rich economic symbotic marriage which will enrich Halliburton given the many business location factors enuciated by Dr Okolo. Perhaps,the level of environmental regulation in different in Dubai than here in the U.S. On the other hand,the advantages that result from feedback or agglomeration effects: firms locate where hubs of activity already exist will help expand the economy of Dubai especially in the oil sector. There will be standard complementarities and positive spillovers from using facilities and suppliers used by other plants. Great move Halliburton!!!

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