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Drilling for Mideast money

Jill Barshay May 23, 2007

Drilling for Mideast money

Jill Barshay May 23, 2007


KAI RYSSDAL: We mentioned gas prices on the program earlier this week and how they’re at an all-time record high as well, just like the stock market.

 It's a fact that hasn't escaped congressional scrutiny. The House passed a bill today that would make gasoline price gouging a felony. Penalties would run $150 million for companies — 2 million and 10 years in jail for individuals. One catch, though: As the House was voting, an expert from the Federal Trade Commission was telling the Senate there's no evidence illegal business practices are, in fact, sending gas prices up. Crude oil closed up about a quarter at $65.77 a barrel in New York today. That's an item that's of note to the U.S. oil industry — even the parts of it that aren't based in this country anymore. Halliburton's the world's biggest oil-field services company. This week, it officially opened its new headquarters — in Dubai. And it sent out a call for local investors. Marketplace's Jill Barshay has that story.

JILL BARSHAY: Halliburton wants a Middle East investor to buy a large stake in its oil services business. It may even list its shares on the Dubai Stock Exchange.

Middle Eastern oil fields are drying up. Halliburton specializes in getting the most from old wells and helping to drill new ones. The Middle East is expected to be Halliburton’s fastest-growing market.

Matt Simmons is chairman of Simmons and Company International. That’s a Texas investment bank that specializes in the energy sector.

MATT SIMMONS: As oil fields decline, you need to exponentially increase your rate of basically drilling wells and providing services. So, you know, maturing oil is basically a blessing for service companies.

Halliburton plans to pump billions of dollars into the Middle East over the next five years. It’s already hired thousands of local engineers and workers.

Halliburton doesn’t need money from Middle Eastern sheiks, but it wants to be known as an international company.

Brad Handler is a senior equity research analyst at Wachovia Capital Markets. He follows energy services companies like Halliburton.

BRAD HANDLER: Because of its successes in some of its core businesses in the United States, it has bit more of a shift to make than some of its large peers.

Halliburton started that shift in April, when it shed its military contracting unit, KBR.

And last Saturday, Chief Executive David Lesar opened a second headquarters in Dubai. He’ll be splitting his time between Dubai and Houston.

In Los Angeles, I’m Jill Barshay for Marketplace.

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