Halliburton may lose job of trucking fuel into Iraq

| 11/7/2003

The Pentagon is considering trucking fuel into Iraq, a move that would take away one of Halliburton's prime responsibilities in the occupied country, the Houston Chronicle reported.

With Democrats on Capitol Hill accusing the Houston firm of charging exorbitant fees for taking in gasoline and other fuels, the U.S. Army Corps of Engineers has approached the military's own fuel supply operation -- the Defense Energy Support Center -- about handling this multimillion-dollar task.

"It's still in the very early stages of negotiation," corps spokesman Bob Faletti said. Faletti said Pentagon analysts have audited Halliburton's bills and have found nothing improper. He cited logistical difficulties, including finding enough trucks in Kuwait to import the fuel.

The corps reportedly began rethinking Halliburton's assignment once it realized that, because of sabotage and other troubles, Iraq would need to import fuel to get through the winter.

Of the $1.6 billion the corps had allocated as of Oct. 17 to rebuild Iraq's oil infrastructure, some $762.4 million had been spent to import fuel and repair Iraq's fuel distribution network. Halliburton is permitted to earn a profit of anywhere from 2 to 7 percent on the cost of the assignment.