Page 308 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

290 Dubai & Co.

focus more on Eastern Hemisphere business. The move was ques-
tioned by many observers, including members of the US Senate.
While there are substantial—and understandable—doubts regard-
ing the firm’s decision, a robust senior management presence in the
Gulf makes a great deal of business sense for firms in the energy
sector.

Move to Dubai: Interpreting Halliburton’s Motives

In March 2007, Halliburton, the energy services firm once led by US
Vice President Dick Cheney and historically a key contractor for the
US government, announced that its CEO, David Lesar, would
“move to Dubai to lead the company’s efforts in growing
7
Halliburton’s business in the Eastern Hemisphere.” As the Eastern
Hemisphere had come to represent about 40 percent of Halli-
burton’s global oil-field services revenue, the firm believed shifting
the head office to Dubai was both a reflection of its evolving busi-
ness and a strategic move to capitalize more effectively on the
regional opportunity.
Some members of Congress, however, saw the matter
differently. Senator Byron Dorgan openly questioned whether
the move was for the purpose of tax evasion, circumvention of
US law, or “to run away from bad publicity on their contracts.” 8
The firm has been under investigation for its contracts in a slew of
countries, most notably Iraq. Senator Patrick Leahy criticized the
move strongly, calling it “an insult to US soldiers and taxpayers
who paid the tab for their no-bid contracts and endured their
9
overcharges for all these years.” Revenue from the US government
did, after all, account for over a quarter of Halliburton’s total
earnings in 2006. 10
While there are likely tax benefits to Halliburton’s move, and
while we may never fully know the firm’s motives, there is a funda-
mental business case for looking east. As Gulf states and other
countries invest heavily in their energy infrastructure, there is
much opportunity for service providers looking to expand their
business. Companies need not move their head office to the region
like Halliburton did in order to increase GCC awareness. Increasing
senior management presence there, however, can be a critical step
in ensuring adequate strategic focus on the Gulf.