Maybe you are just upset because you did not buy any stock
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Issues & Insights
Friday, March 5, 2004
A Job Well Done
INVESTOR'S BUSINESS DAILY
Media: To listen to recent media accounts, you would think Halliburton's (HAL) performance in Iraq has been scandalously bad. That charge is closer to libel than the truth.
As with so many other things, the media often take their line on a story and run with it, regardless of the facts. That's exactly what has happened with Halliburton.
It has been pilloried by the media for supposedly overcharging the government, for its alleged sweetheart "no-bid" contracts, for its ties to Vice President ? and former Halliburton CEO ? Dick Cheney, and a long list of other supposed sins.
But, as usual, a look at the facts shows a radically different picture.
Let's focus on just one: Halliburton's performance. Just this week, the Coalition Provisional Authority in Iraq told the New York Times Iraq is now pumping 2.5 million barrels of oil a day. That compares to 2.8 million barrels before the war.
"We're well ahead of the targets that we set in the aftermath of the war," noted Robert McKee, the retired oil executive in charge of getting Iraq's oil flowing again.
Ahead indeed. Earlier this week, U.S. administrator in Iraq Paul Bremer noted Iraq's electricity output has also reached prewar levels ? and is set to expand rapidly from here, thanks to growing oil output. A huge success story.
And who deserves credit for much of this success? Halliburton Co. It has worked under extraordinarily tight deadlines in a war-damaged nation still wracked by violence to restore that country's energy grid. Yet, you rarely hear of the oil giant's contribution.
Gee, you might start to wonder: Are some Halliburton critics more interested in scoring points against Cheney and the Bush administration than getting Iraq back on its feet?
Which brings up the most irksome part of the charge: That somehow Cheney got Halliburton the Iraq contract, and Halliburton was thus an undeserving political recipient of government largesse.
In fact, Halliburton won its services contract from the Pentagon back in 1992 ? three years before Cheney became CEO. Then-Defense Secretary Cheney wasn't the one who awarded the contract; career Pentagon officials did. This is undisputed.
Why? They needed a company that could rebuild things fast, in a war zone, on an emergency basis. Through competitive bidding, they picked the company with just that expertise.
By the way, Halliburton worked under the same basic deal in the Balkans under President Clinton. Was that also cronyism?
At least investors seem to recognize what's going on. Impressed by the company's performance under fire, they've pushed up Halliburton's share price by 69% since the start of 2002.
That's a sign Halliburton's doing something right ? and that the petty charges now being hurled its way have little substance.
