HOUSTON -- Halliburton Corp.'s (HAL) U.S. government contracts to restore Iraqi oil production and provide support services to troops will cost taxpayers an estimated $2 billion and are expected to rise further, Army spokesmen said Wednesday.
An Army Corps of Engineers contract to rehabilitate the country's oil fields is now valued at $948 million, more than $200 million above the level projected last month. Halliburton's Army Field Support Command contract is now estimated to cost $1 billion in Iraq alone, up more than $400 million from the level in late May.
Although only a small fraction of the value of the contracts will end up as Halliburton profits, the higher price tag could pose political challenges for the Bush administration because Vice President Dick Cheney was previously the company's chief executive.
As with the cost of the overall U.S. effort in Iraq, the Halliburton contracts have escalated in value as Iraqi infrastructure continues to be plagued by looting and sabotage.
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Halliburton reported $292 million in Iraq-related revenues for the quarter ended June 30. Analysts said the Iraq work added two or three cents per share. Halliburton reported second-quarter net income of $26 million, or 6 cents a share, compared with a net loss of $498 million, or $1.15 a share, in the same period the year before.
A Halliburton spokeswoman said the company wouldn't comment on the future earnings impact of its Iraq-related work.
What a difference an invasion makes: a net loss of $498 million versus a quarterly profit of $26 million. That's over a half billion dollar swing to the plus side for Halliburton in a single quarter, comparing 2003 to 2002. And it's in the exact opposite direction of the swing our federal budget has taken from the plus to the minus column. Coincidence, or chicanery?
Did you catch that other detail? Looting and sabotage increase the value of the Halliburton contracts.
Now we know why there's so much chaos in Iraq since the invasion — it's so fucking profitable.
