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HALLIBURTON
1401
McKinney, Suite 2400, · Houston, Texas 77010
Phone
713.759.2600
Margaret
E. Carriere
Senior
Vice President and Corporate Secretary
May
26,
2006
VIA
EDGAR, FACSIMILE (202) 942-9579 and U.S. Mail
Cecilia
D. Blye, Chief
Office
of
Global Security Risk
United
States
Securities
and Exchange Commission
100
F.
St. N.E.
Washington,
D.C. 20549-5546
Reference: Halliburton
Company
Form
10-K for the Fiscal Year Ended December 31, 2005
Filed
March 13 2006
File
No. 001-03492
Dear
Ms.
Blye:
This
is
in response to your letter addressed to our President and CEO, David J. Lesar,
dated May 15, 2006.
Response
to Comments 1, 2 and 3
Iran
Activities
in Iran occur through three foreign entities: Halliburton Products and Services,
Ltd., (hereinafter HPSL) a Cayman Islands corporation headquartered in Dubai;
GVA Consultants AB (hereinafter GVA-C), a Swedish corporation headquartered
in
Gothenburg, Sweden; and M.W. Kellogg Limited (hereinafter MWKL), a U.K.
corporation, headquartered in Greenford, England.
HPSL
had
approximately $ 45 million revenue in 2005 for conventional oil field services
work in Iran. Approximately 120 employees worked in Dubai for this entity in
2005. Revenues for 2006 through March 31, 2006 are approximately $ 14.6 million.
Anticipated revenues for the remainder of 2006 are estimated at approximately
$
10 million. Only three active contracts remain and the activity is in the
process of slowly shutting down. No new contracts have been accepted since
March
31, 2005. Only one contract should last beyond 2006. Employment is now below
100
and will continue to decline as the remaining contracts are
completed.
GVA-C
had
approximately $ 1.6 million revenue from Iran in 2005, all based on a single
contract wherein GVA-C are consulting engineers on a semi-submersible project
in
Iran. Approximately 23 employees worked on Iran-related work during 2005. In
2006 only 1 person has been involved with this contract, mostly trying to sort
out the outstanding invoices that are due for payment. Completion of this
contract should come in 2008. Revenue this year through March 31, 2006 is $
0.
No new contracts have been accepted since March 31, 2005. All work should be
completed by the end of 2008.
MWKL
had
approximately $ 7 million total revenue from Iran in 2005, based on four
contracts where it was furnishing consulting engineering and technology
licenses to various Japanese construction companies working on projects in
Iran. The Halliburton portion of this joint venture company was 55%, or
approximately $ 4 million. The MWKL work scope for two of these
contracts has now been completed although MWKL has remaining warranty
liability. Approximately 9 employees worked on Iran-related work
during 2005. Revenue for 2006 through March 31, 2006 is $ 400
thousand. No new contracts have been accepted since March 31, 2005.
All work on these contracts is expected to be completed by the end of
2009. Total remaining expected revenue is approximately $ 2.3 million
spread over the next three to four years.
All
Iran
revenues combined were just over $ 50 million for 2005, or about one quarter
of
1% of the company’s revenue. 2006 revenues are expected to be in the range of
one tenth of one percent of total Halliburton revenues. Particularly in light
of
this very small scale of activities, and the decision not to accept new
contracts, we see no negative impact on shareholders or investors. We do not
believe our remaining contracts with Iran constitute a material investment
risk
to our shareholders. We are not aware that any person or entity has made the
decision to invest or not to invest in Halliburton based on activity in Iran,
nor do we think it likely that they would do so.
We
also
wish to note that there are no plans or intentions at this time to expand
Iranian activity or otherwise re-enter that market.
Syria
The
company has no active operations in Syria. Sales for 2005 were only $21
thousand, consisting of Landmark Graphics oilfield software. The Syrian sales
represent less than one one-thousandth of 1% of the company’s revenue for the
periods discussed. No sales have been made thus far for 2006. We believe that
there is no impact on investors or investor sentiment relating to activities
in
Syria. We are not aware that any person or entity has made the decision to
invest or not to invest in Halliburton based on activity in Syria, nor do we
think it likely that they would do so.
If
you
have questions, please call me at 713-759-2617.
Sincerely
yours,
/s/
Margaret Carriere
Margaret
Carriere