Halliburton to build gas-to-liquid plant in Nigeria

May 05, 2005 02:00 AM

Halliburton, the Houston, Texas, USA based oil firm, has again, through its subsidiary, Kellogg, Brown and Root (KBR) been awarded another mouth watering contract by the Federal Government of Nigeria.
The new contract is worth $ 1.7 bn. It is for the construction of a gas-to-liquid plant in the country. The project has a completion date of 2008.

Details of the contract indicate that ChevronTexaco and Nigeria National Petroleum Corporation (NNPC) awarded the contract to a joint venture in which the Halliburton firm, KBR is the major concern. Award of the contract is however, without regards to ongoing investigations into a tax and bribery scandal which has rocked KBR and Halliburton's involvement in the Nigerian business environment.
In May 2003, the company, under probe by the US’ Securities and Exchange Commission (SEC) admitted that it made illicit payments of $ 2.4 mm to Nigerian tax officials to enable it secure favourable tax cuts and evade making appropriate tax payments to the Nigerian government, in a contract to build a LNG plant for the country.
Admitting the fraud, Halliburton said, "the payment was made to obtain favourable tax treatment." The total tax value was put at over $ 5 mm.

Meanwhile, the same company is facing probes in France over KBR's alleged fraudulent business dealings. At the moment, the House of Representatives is also conducting a probe of Halliburton's activities in the country through its numerous subsidiaries. Outcome of these probes is being awaited.
The company had earlier identified some well placed Nigerians as beneficiaries of its inducements. Some of those identified have owned up to receiving inducement, from Halliburton and its subsidiaries to facilitate business activities in the bid for the natural gas plant contract, though they tried to rationalize it.

Questionable business conducts of Halliburton and its subsidiaries are not limited to Nigeria. Indeed, USA Vice President, Dick Cheney's political profile stands dented by his association with the company of which he was CEO between 1995 and 2000. His being part of the President George W. Bush ticket for re-election in November 2004 was dogged all through by his Halliburton links.
The new hefty contract, which ignores Halliburton's contentious records, is to the chagrin and consternation of Nigerians who are constantly told by the Obasanjo government of its commitment to anti-corruption and pro-ethical conducts. The new contract to Halliburton certainly does not reflect this spirit of promoting probity and honest practices in business and public affairs.

The Halliburton contract questions the seriousness of government in holding corrupt public officers accountable for their actions, while on the other hand encouraging and patronizing companies that have not only confessed to corrupt practices, but are not known to respect healthy business ethics.
James Halloran, a top official of Halliburton, who manages one of its accounts in USA, captured the mindset and unrepentant business culture of the company when he said of Nigeria, "they will have to be as clean as possible, but we're naïve if we think we can clean up corruption in Nigeria." Obviously, Halliburton and its subsidiaries have no intentions of changing their corrupt ways of doing business in Nigeria.

Awarding a new hefty contract to the Halliburton group insults the sensibility of Nigerians. No reason justifies the action unless the company has been absolved of wrong doing by the agencies probing it, including the House of Representatives. There are no records of such acquittal.
Information about the contract also indicate effort to keep details of the contract as secret as possible, particularly from the Nigerian public. There should be no reason for such tendency, were Halliburton to have a proud pedigree in business practices. The $ 1.7 bn contract to Halliburton has the potentials to be costlier in many more ramifications than the actual figure presents. The company has proved that indeed, in Nigeria, a firm identified with sleaze and unethical practices can still do multi-billion naira business with the government, even if its activities are under probe.

The fight against corruption which the government insists it is waging with all seriousness must be comprehensively fought if it will be convincing to sceptics and yield result. The new contract to Halliburton does not look like a move in tandem with the spirit of anti-corruption.
Government needs to explain why it has continued its embrace with Halliburton, even against the stance by the House of Representatives that business with the company be suspended until the full extent of its activities in a $ 180 mm bribery scandal is established.
Can't Nigeria do without Halliburton? At least, for now!

Source: Daily Champion
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