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Halliburton Connected to Office in Iran

Dow Jones, 1 February 2001


Halliburton Co., the U.S. oil-services giant until recently headed by Vice President Richard Cheney, has opened an office in Tehran and operated in Iran in possible violation of U.S. sanctions, Thursday's Wall Street Journal reported.

Since 1995, U.S. laws have banned most American commerce with Iran. Halliburton Products and Services Ltd. works behind an unmarked door on the ninth floor of a new north Tehran tower block. A brochure declares that the company was registered in 1975 in the Cayman Islands, is based in the Persian Gulf sheikdom of Dubai and is 'non-American.' But, like the sign over the receptionist's head, the brochure bears the Dallas company's name and red emblem, and offers services from Halliburton units around the world.

Mr. Cheney's spokesman, Juleanna Glover-Weiss, declined to comment, except to say that 'the vice president is no longer head of Halliburton and has severed all ties to the company.'

But a U.S. official said a Halliburton (HAL) office in Tehran would violate at least the spirit of American law. The Treasury Department's Office of Foreign Assets Control declined to comment on a specific company, referring inquiries to a Web site summary of Iran sanctions that bans almost all U.S. trade and investment with Iran, specifically in oil services. The Web site adds: 'No U.S. person may approve or facilitate the entry into or performance of transactions or contracts with Iran by a foreign subsidiary of a U.S. firm that the U.S. person is precluded from performing directly. Similarly, no U.S. person may facilitate such transactions by unaffiliated foreign persons.'

An executive order signed by President Clinton in March 1995 prohibits 'new investments [in Iran] by U.S. persons, including commitment of funds or other assets.' It also bars U.S. companies from performing services 'that would benefit the Iranian oil industry.' Violation of the order can result in fines of as much as $500,000 for companies and up to 10 years in jail for individuals.

Halliburton spokeswoman Wendy Hall said the Tehran office didn't violate the Treasury Department's restrictions on foreign subsidiaries of U.S. firms operating in Iran.

'This is not breaking any laws,' Ms. Hall said. 'This is a foreign subsidiary and no U.S. person is involved in this. No U.S. person is facilitating any transaction. We are not performing directly in that country.' Ms. Hall suggested that other companies were performing in a similar fashion in Iran but did not elaborate.

The Halliburton brochure in Tehran says the company has performed oil-drilling services on two offshore drilling contracts in the Iranian sector of the Persian Gulf. One is the Sirri field, being developed by France's TotalFinaElf SA, and the other is Phase 1 of the South Pars field, being developed by an Iranian company. 'We are committed to position ourselves in a market that offers huge growth potential,' it says.

Copyright © 2001 Dow Jones
Reprinted for Fair Use Only.

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