Halliburton's move is linked to oil
Start of a new trend?: Does this step mark the start of a new trend and will other giant companies shift their headquarters to Dubai which plans to become a global capital by 2050? Picture: EPA
Friday, March 23, 2007
THE decision by US oil services giant Halliburton to shift its corporate headquarters and its chairman and executive officer to the Middle East financial powerhouse of Dubai took many by surprise and raised many questions.
Halliburton's move to shift to Dubai makes one ask: Why Dubai in particular, not another city? There are many other cities that do not suffer from traffic jams and a high cost of living as Dubai does.
However, Halliburton made its decision despite chronic tensions and the increasing talk about the potential breakout of a fourth war in the Gulf region. The Texas-based oil services company, which was headed by United States Vice-President Dick Cheney from 1995 to 2000, is known to have close ties with decision makers in Washington.
So what is the reason behind this move? Why did the company take the decision at this particular time? Does it suggest that a military confrontation is unlikely to take place in the near future? Or, does it strongly bet upon Dubai's security and stability even if a war breaks out?
Despite being home to more than 90 of the top 100 companies in the world, this is the first time that a giant company has shifted its global headquarters to Dubai. The move followed the announcement of Dubai's ambitious strategic plan to continue growing and increase its gross domestic product (GDP) to US$110 billion by 2015.
Halliburton's surprise and unprecedented move triggered a wave of anger and drew a wave of sharp criticism in the US, calling it an insult to America. The Financial Times newspaper described the move as a revolution.
How dare the company, which was founded in 1919, and works in the energy field in more than 70 countries, decide to shift from the US — the land of old dreams — to Dubai in the United Arab Emirates, the land of new dreams?
Does this step mark the start of a new trend and will other giant companies shift their headquarters to Dubai which plans to become a global capital by 2050?
Dave Lesar, Halliburton's chairman, said it was a mere commercial and administrative decision.
Despite its move to Dubai, Halliburton will maintain a corporate office in Houston and maintain its US nationality. However, this does not necessarily mean loyalty or political and sentimental affiliation to America.
Yet, the first and foremost consideration of Halliburton and other global companies is their annual profits, financial returns and investments in the oil industry while remaining at the top in view of fierce competition with other global companies.
Oil figures show that the US has lost its traditional leadership of the oil sector. Although the US is still the world's largest oil consumer, it is no longer the biggest oil producer. It only has 20 billion barrels of oil reserves, which will run out in the next 10 years.
Today, crude oil is concentrated in five GCC states. More than 70 per cent of the world's oil reserves are in the Gulf region as well. Gulf countries produce more than 30 per cent of the world's crude oil. The world's largest oilfields exist in the Gulf region and the largest number of giant oilfields was also discovered in the GCC countries.
The fact is that despite all the GCC oil production and exports, Gulf oil reserves increase every day. This leaves no doubt that the world's oil centre has gradually turned from the US to the Arab Gulf region. It is a known fact that wherever the oil centre moves, oil companies move.
Halliburton is one of the first companies which prefer to be close geographically, administratively and technically to the largest oil and natural gas fields in the world.
No matter what the actual reasons behind Halliburton's move are, it comes to the region with many promising investment opportunities along with its controversial activities as well. Above all, by moving to Dubai — the most global and attractive city in the Arab region — Halliburton will find itself again in centre stage of world media attention.
Dr Abdul Khaleq Abdullah is a professor of political science at UAE University, Al Ain.Gulf News
Halliburton's move to shift to Dubai makes one ask: Why Dubai in particular, not another city? There are many other cities that do not suffer from traffic jams and a high cost of living as Dubai does.
However, Halliburton made its decision despite chronic tensions and the increasing talk about the potential breakout of a fourth war in the Gulf region. The Texas-based oil services company, which was headed by United States Vice-President Dick Cheney from 1995 to 2000, is known to have close ties with decision makers in Washington.
So what is the reason behind this move? Why did the company take the decision at this particular time? Does it suggest that a military confrontation is unlikely to take place in the near future? Or, does it strongly bet upon Dubai's security and stability even if a war breaks out?
Despite being home to more than 90 of the top 100 companies in the world, this is the first time that a giant company has shifted its global headquarters to Dubai. The move followed the announcement of Dubai's ambitious strategic plan to continue growing and increase its gross domestic product (GDP) to US$110 billion by 2015.
Halliburton's surprise and unprecedented move triggered a wave of anger and drew a wave of sharp criticism in the US, calling it an insult to America. The Financial Times newspaper described the move as a revolution.
How dare the company, which was founded in 1919, and works in the energy field in more than 70 countries, decide to shift from the US — the land of old dreams — to Dubai in the United Arab Emirates, the land of new dreams?
Does this step mark the start of a new trend and will other giant companies shift their headquarters to Dubai which plans to become a global capital by 2050?
Dave Lesar, Halliburton's chairman, said it was a mere commercial and administrative decision.
Despite its move to Dubai, Halliburton will maintain a corporate office in Houston and maintain its US nationality. However, this does not necessarily mean loyalty or political and sentimental affiliation to America.
Yet, the first and foremost consideration of Halliburton and other global companies is their annual profits, financial returns and investments in the oil industry while remaining at the top in view of fierce competition with other global companies.
Oil figures show that the US has lost its traditional leadership of the oil sector. Although the US is still the world's largest oil consumer, it is no longer the biggest oil producer. It only has 20 billion barrels of oil reserves, which will run out in the next 10 years.
Today, crude oil is concentrated in five GCC states. More than 70 per cent of the world's oil reserves are in the Gulf region as well. Gulf countries produce more than 30 per cent of the world's crude oil. The world's largest oilfields exist in the Gulf region and the largest number of giant oilfields was also discovered in the GCC countries.
The fact is that despite all the GCC oil production and exports, Gulf oil reserves increase every day. This leaves no doubt that the world's oil centre has gradually turned from the US to the Arab Gulf region. It is a known fact that wherever the oil centre moves, oil companies move.
Halliburton is one of the first companies which prefer to be close geographically, administratively and technically to the largest oil and natural gas fields in the world.
No matter what the actual reasons behind Halliburton's move are, it comes to the region with many promising investment opportunities along with its controversial activities as well. Above all, by moving to Dubai — the most global and attractive city in the Arab region — Halliburton will find itself again in centre stage of world media attention.
Dr Abdul Khaleq Abdullah is a professor of political science at UAE University, Al Ain.Gulf News
2007/3.%20March/23%20Mar/BT23Mar.4.pdf
Business Besides Oil
