Chehey doing very well $ wise

This is such a blatent crime!!!
Halliburton's Iraq costs $2 bln so far and rising
Reuters

Friday September 12, 11:26 AM EDT

(Adds Army Corps spokesman Dan Carlson, paragraphs 7-11)

By Joseph A. Giannone

NEW YORK, Sept 12 (Reuters) - Costs incurred by U.S. oil services contractor Halliburton Co. (HAL) in Iraq have climbed to about $2 billion and are rising, Army spokesmen said Friday, citing the effect of looting and sabotage to the nation's energy infrastructure.

Kellogg Brown & Root, a unit of Houston-based Halliburton, currently holds two contracts, for oilfield repairs and for logistics support services, from which it earns a small percentage as income. As U.S. involvement in Iraq grows longer and more expensive, Halliburton stands to reap bigger profits.

In March, Halliburton was granted, without competition, a contract by the Army Corps of Engineers to repair and restore Iraq's oil fields. As of Sept. 8, the total cost of that contract to taxpayers was just under $948 million, Corps spokesman Scott Saunders said.

That's about $200 million higher than projected just last month, mostly because the U.S. has been forced to import oil and fuels into Iraq, which has the world's second-largest oil reserves after Saudi Arabia. Importing oil, gasoline, diesel and propane costs the United States about $6 million per day.

"We didn't expect to have this much trouble getting production back up, or to have pipelines blown up and power stations sabotaged," said Saunders.

Halliburton, led by U.S. Vice President Dick Cheney from 1995 to 2000, gets a base fee of 2 percent of those costs, or $19 million. But that could rise as high as 7 percent, or $66 million, with performance bonuses.

LOGISTICS

Under a second contract, Halliburton's KBR unit has racked up a little over $1 billion in expenses in Iraq, said Dan Carlson, a spokesman for U.S. Army Field Support Command in Rock Island, Illinois.

So far, Carlson said 67 task orders had been agreed and three more would be added in the coming days. He did not know the worth of these orders.

Under this contract, secured from the U.S. Army Field Support Command in December 2001 after competitive bidding, KBR provides dining services, mail delivery, transportation and other logistics to military personnel worldwide.

Big ticket items so far have been establishing base camps for U.S. troops in Iraq. Under the field support contract, Halliburton can earn 1 percent to 3 percent of contract costs, or roughly $10 million to $30 million on $1 billion in expenses.

By the middle of next month, the Army is expected to award two contracts for the longer term restoration of Iraq's northern and southern oilfields, which will replace Halliburton's current no-bid contract. KBR is a bidder.

The Corps spokesman declined to disclose the number or identify of bidders.

The outsourcing of military field support services, once handled by the soldiers themselves, began in 1992, when Cheney was secretary of defense in the first Bush Administration.

(Additional reporting in Washington by Sue Pleming)

©2003 Reuters Limited.

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