Halliburton subsidiary wins Iraqi oil firefighting contract
WASHINGTON (AFP) - The US army said it gave the main Iraqi oil well firefighting contract to a unit of Halliburton Co., a firm once run by Vice President Dick Cheney (news - web sites), without any bidding.
Kellogg, Brown and Root, a unit of Houston, Texas-based Halliburton, was handed the contract by the Army Corps of Engineers, which has been placed in charge of fighting the blazes.
The contract had not been put out to tender, said the Corps spokesman, Lieutenant Colonel Gene Pawlik.
Kellogg, Brown and Root (KBR) had already been asked by the Pentagon (news - web sites) to draw up plans for extinguishing oil well fires in Iraq (news - web sites), Pawlik noted.
"It made the most sense to engage them in the near term as the company to get the mission done because they were familiar with the details of the fires themselves and what would be needed," he said.
The value of the contract would depend on the scale of the work.
The chief of Britain's armed forces, Admiral Sir Michael Boyce, said Friday that Iraqi forces had set fire to seven oil wells in the south of the country.
KBR would claim the cost of its services plus two to five percent depending on how it executed the job, Pawlik said.
Shares in KBR parent Halliburton rose 54 cents or 2.68 percent to 20.66 dollars.
"KBR was selected for this award based on the fact that KBR is the only contractor that could commence implementing the complex contingency plan on extremely short notice," the company said in a statement.
KBR said it had teams of well control and engineering contractors preparing the initial phase.
The company was given a free hand to choose subcontractors for the work, the Corps spokesman said.
KBR chose Houston-based Boots and Coots International, with which it has a services and equipment partnership, and Wild Well Control Inc. as firefighting subcontractors.
President George W. Bush (news - web sites)'s spokesman, Ari Fleischer (news - web sites), said he did not have the details.
"I think the question that people will want answered is: Do we have a plan in place to put out the oil fires, and is it a good plan to put out the oil fires?," he told a news conference.
Bush asked lawmakers on Tuesday to approve some 3.5 billion dollars in aid to get Iraq back on its feet, including nearly half a billion for oil field repair.
In a statement late Monday, the Defense Department said the Army Corps of Engineers would rely largely on contractors to extinguish the oil well fires and assess the damage to facilities.
Kellogg, Brown and Root was the prime contractor for the initial phase, Pentagon said. The contract would be in force for an interim period, until additional contracts were procured, it said.
Subcontractor Boots and Coots, whose shares rose six cents or 5.45 percent to 1.16 dollars, welcomed its selection.
"We have surveyed these wells and are preparing to mobilize the equipment," Boots and Coots president Brian Krause said in a statement.
"We will begin stabilization of the wells once the location around the wells is secure," he said.
Boots and Coots was brought into Kuwait in 1991 to control about 240 of more than 700 burning wells following the Gulf War (news - web sites), it said.
Cheney was chief executive of the KBR parent company Halliburton, a major oil services company, for five years until 2000.
