THISDAYonline

Tell me your story, I mean how your company came to Nigeria I can tell you how Halliburton started. I am the Vice President of Halliburton Energy Services Nigeria which provides products and services to the oil industry in Nigeria as we do anywhere in the world. We have actually been operating in Nigeria since 1959. So it's been a long, long history. About 45 years of presence in the country. We started 45 years ago with an operation in Port Harcourt and we steadily grew our operations there and in Lagos. We employ about 700 Nigerians who are full time employees which makes a significant part of our workforce.

Halliburton as a corporation is organised into two distinct business units. One is the Energy Service Group of which Halliburton Energy Services Nigeria Ltd. is a part and the other is the Engineering and construction which is the KBR part of the company, which deals with construction projects such as the LNG type projects which you may be familiar with. They also build hospitals, chemical plants and also there is a branch that pertains to infrastructures and government operations. That is, it helps to sustain government operations such as providing support to US troops in Iraq. That is very different from what we do here at Halliburton Energy Services on a day to day basis. We provide services to the Oil companies by building Well Heads and Wells for our customers here in Nigeria. It represents an important but a distinct portion of the Halliburton Group. I think it is important for me to make this distinction because it's always confused between which part of Halliburton is mention in the media.

You sure have a long history in Nigeria but in recent time you have been enmeshed in undignified allegations of bribery, tax evasion and sundry allegations, can you throw more light on these?

I think the bribery that you refer to is the TSKJ problem which I understand is under investigation. It is not under my direct responsibility. But I want to say here clearly that the TSKJ organisation or consortium was formed by four companies which individually has 25 percent of the joint venture consortium. It was formed before Halliburton was even in the picture, Halliburton acquired Dresser Industries (which owned M.W. Kellogg the original Kellogg in TSKJ) in 1998. And the vast majority of what is being investigated took place before Halliburton took over Kellogg. Also the reports in the media very often mentions our company even more than TSKJ. If you go back in history TSKJ is formed from four (4) companies, Technip, Snamprogetti, JGC and M.W. Kellogg now called KBR.

The whole media attention has put our company in certain light that is not positive and we thought we should just make some clarifications about what we actually do and what we don't do.

So tell me why did the federal government ban Halliburton from getting new contracts in Nigeria?

A ban has been imposed by the federal government since late September 2004. And this is directly linked to the robbery of two radioactive sources almost two years ago now. And that incident took place between Escravos and Port Harcourt and as a result of the investigation that has been carried out the federal government then took a step to ban us, Halliburton Energy Services Nigeria Limited, from getting new contracts in Nigeria. We believe the main reason for the ban was to put pressure on our company to try and get the substance back in the country. I think there has been a lot of miscommunication and misunderstanding over this matter. We have never been opposed to efforts to retrieve and bring back the material to the country. The source has been recovered in Germany and was taken to our facility in Houston for inspection to make sure there was no risk of contamination or exposure to the public. That is the main reason that they ended up in our facility in US. What I think at that stage is that we should have done a better job of interfacing with the Nigerian government. We didn't intend to offend anybody in government. And unfortunately the whole chain of event has resulted in our company being banned today which is negatively affecting our business and operations in the country.

I want you to be clear on this: Were the radioactive sources stolen by unknown persons or were they taken away by your officials?

That's a very good question. The sources were stolen by a third party and investigations are still on-going. And luckily, I must say they were found in Germany. And through radiation detectors we have been able to identify the sources as the ones that were stolen in Nigeria. We have been able to bring the sources back to Nigeria and are actually on ground back in Port Harcourt and inspected by the Nigerian National Radioactive Authority, about a month ago.

So the missing or stolen radioactive sources are back in the country?

Yes. We found them and returned them back to Nigeria.

So how is the current ban affecting your operations?

It is obviously putting a very strong pressure on our ability to do business. The large part of our activities depend on constantly getting new contracts in Nigeria. If the ban was to last some months it will result in shutdown of our operations. That is how serious it is. We haven't taken the situation lightly, we work with our customers, we work with government operatives to find a resolution, and we think we are making progress. And the fact that the sources have been returned should help us come to a positive resolution soon. And back to us, time is of essence to get a positive outcome. So much depends on our ability to get new contracts. We cannot survive on the on-going contracts that we are working on . We constantly need new businesses to maintain our presence here.

Are you really saying that the ban which came soon after the House of Representatives released its report on TSKJ alleged bribery scandal had no connection?

Yes, that is correct. The ban has nothing to do with the House report. There is a lot of confusion going on at the moment about the issue. The ban has been imposed by the Federal Government and clearly, it is not based on any request from the National Assembly. The Assembly investigated large scandal over the LNG and TSKJ issue which have nothing to do with Halliburton Energy Services. The issues are not related. The ban is strictly related to the radio-active source issue.

Still on the bribery scandal. Now tell me, is it the practice of Halliburton to vote huge sums of money to bribe government officials to influence the award of contracts to it?

Absolutely not. Nigeria or anywhere in the world we operate, ethics is our number one value. We are very serious about code of business conduct and are always in compliance with all our regulations and directives from local governments and United States regulations. And as you may know, there is a strong focus on those type of issues in the US. And the foreign corrupt practice Act in the US clearly forbids bribery. Here in Halliburton we don't support acts of bribery, it is against our code of business conduct. And I really cannot find any strong enough word to comment on how abhorrent that is to us.

If you object strongly to giving bribe as you have stated, why are your officials shying away from the House probe? And is it true that Government is secretly asking you not to appear before the House?

Well, I am not aware of any of that at all. I am not aware that government is asking any of our officials not to appear. And it is not true that our officials are shying from appearing before the House. I believe the issues concern TSKJ and not Halliburton. And I think because the issues that are being investigated took place long ago, they are finding it difficult to get to the root of it. As a company, we shall keep co-operating with the various authorities whether in Nigeria or outside Nigeria, in the US, France or wherever to get to the bottom of that. We are very focused and interested in getting to the truth.

With all the allegations in the media there seems to be mounting opposition to Halliburton handling train 6 of the LNG project are you aware of this development?

That is beyond my expertise and operation here in Nigeria. I really don't know what to say on that.

What is the relationship between Halliburton and Tessler?

As I understand Tessler has been contracted sometime in the past by TSKJ and not by Halliburton. That is what I know about the relationship.

Can you shed some light on the relationship between Halliburton and TSKJ.

These are two very different companies as far as Halliburton Energy Services is concerned. TSKJ built Nigerian Liquid Natural Gas plant. And we work with our customers on the surface, TSKJ construct facility on the ground. And this is remotely linked because its part of the Oil and Gas field. It is a very different type of skills that parade the two operations. I mean TSKJ or KBR or similar companies work on projects, usually very big size projects for a limited period of time. They sub contract a lot of their activities for a fixed duration of time. Halliburton Energy Services is a company that invest in the long term projects. We have physical presence in different countries where we operate. We invest locally, and have very talented local content and we are here to stay or perhaps trying to be here to stay. So we have a long term focus.

But is TSKJ structurally under the Halliburton Group?

No. Not at all, not at all. The only link that exist between TSKJ and Halliburton Group is the KBR business unit. KBR is the "K" in TSKJ and a subsidiary of Halliburton. And the KBR unit has 25 percent Shares within TSKJ. And KBR and Halliburton Energy Services are different.

Are we to believe therefore that the sins of TSKJ are being unfairly visited on Halliburton?

Basically yes. There has been a lot of misrepresentation in the newspapers. I am not sure exactly why, maybe the name Halliburton give a better story in the media because of the exposure our company has had in the past year or so. But there shouldn't be any impact from one to the other because they are very different. They are not linked, the management is different, the business is different.

Do you think the connection of Vice President Dick Cheney to Halliburton has somehow helped to push your company to the front burner on this issue even though negatively?

I think it makes the story better for the media. We can't deny that Dick Cheney used to be our chairman. And this was widely used during the US election campaign, and it promoted that Halliburton name beyond its scope. We are normally not a very public company. Our customers are very limited and they are oil operators or companies. So we are dealing with image issue here which we have been compelled to do because of the negative public exposure.

So are you telling me categorically that Halliburton is not involved in the alleged $180 million scam?

I am saying here that Halliburton Energy Services is not involved and has nothing to do with that investigation, bribery or no bribery. I want to make that very clear. Our code of business conduct in Nigeria or anywhere in the world are predicated on values guided by ethics. I am not saying that people don't make mistakes in our establishment, when they do they are investigated and dealt with.

Can you shed some light on the relationship between KBR and Halliburton Group?

KBR is a business unit of Halliburton, just like Halliburton Energy Services. So we have two distinct business units. KBR is the K in TSKJ and it is 25 percent part of the consortium. That is the extent of its involvement. But it is misrepresented in the media, and this create a lot of confusion.

Now tell me, is there any relationship between Halliburton, Jeffrey Tessler or Trista?

Halliburton Energy Services? No. I don't know Mr Tessler. I have only read in the media about him. Mr Tessler has a contract with TSKJ as I understand it through his company Trista. TSKJ I am aware actually severed its relationship with Trista while all these investigations are going on. They even said they may have proceedings against this company. Please, this information is what I read in the media.

Lets go to the tax issue. Halliburton is said to be in tax default payment to the federal government to the tune of $10 million by the Federal Inland Revenue Service, a claim disputed by your company, can you tell us the correct situation?

One thing I want to make very clear here is that Halliburton pays its tax everywhere it operates. Actually, in this situation, which is also KBR entity not Halliburton Energy Services, what I know of it is that an internal investigation established that payment of taxes for one given project didn't end up reaching the Federal Government. It was Halliburton's investigations that established those facts. And it was Halliburton that self reported the matter to the authorities. And I don't think there are many companies that will do that. And we made sure the money eventually got to the appropriate tax authorities. So technically Halliburton has paid its tax.

As for the outstanding, the dialogue is still going on between KBR, our tax department and Federal Inland Revenue towards a resolution. This is purely a normal tax assessment situation and really has nothing to do with tax evasion. We meet our tax obligations anywhere we operate.

With all these allegations of bribery, tax evasion, missing radioactive materials etc even though you have stated your own side to it all, are you not worried about the image problem it will create for you?

Of course we are worried about the image of the company obviously because of the way it is presented. And this does end up having an impact on the way we are perceived. Even though we are a very ethical company, but the image that is communicated is 180 degrees away from the principles and values that we share. It is one of the reason we are having this conversation. Because we want to make the facts known as opposed to the misrepresentation in the media. The tax issue clearly indicates that there was no intent of tax evasion by our company. The robbery of radioactive material is something that we have suffered consequences. It was a third party act and we regretted the situation more than anything else. The source we are talking about is about the size of a coin. The sources are radioactive and they are kept in protective shield which are locked and transported in containers that are chained up. The robbery of such materials is very difficult. Obviously all the security we put in place to ensure the safety of the material was not enough even though we complied with standard international security procedures.

We have now made design change on the containers to make it more difficult to break. We have cooperated with the relevant bodies here and international to help establish standard procedures to safeguard the public and the host of materials used in the oil industry.

From your investigation of the theft of the radioactive source considering the security put in place, was there any internal complicity?

No, not at all. This happened some two years ago and there has been a lot of investigations done internally, done by third party, by the Nigeria government, and in all these we have not established any internally complicity at all. But we haven't been able to conclude exactly what happened on investigation. We are however hopeful the various investigations will identify and punish those found to have participated in the robbery.

Do you categorically deny that there was no vote of $180 million or any other money to bribe officials in Nigeria?

Of course. I am not aware of anything like that. I will be stunned if that was the case. As I have said investigations are ongoing, lets wait and see the outcome of that probe both internally and externally.

Can you now briefly tell me how your 45 years of doing business in Nigeria has benefited your company and the Nigerian economy in general?

I think through the long stay, there has been a slow development of the company and it is a very different company from what it was 45years ago obviously. Now we are able to provide wide range of services to the oil industry. We have also invested in human development nationally and international. I will say 85 percent of our workers are Nigerians.

But the impact on the economy is beyond a set of people and their families who work for us. We have invested money in various communities. Halliburton is a proud member of several community initiatives. And we want to do more in terms of commitments to the local economy. We have only recently gone into strategic alliance with local companies to push and boost local content. Because we believe that the future of the oil industry in Nigeria is to develop good participation, training and the right alliance. We want to help develop strong local companies. And I think that is part of the agenda of the of government and NNPC. We are willing to play a big role. We are excited that there is significant world class development projects that are coming in the deep waters of Nigeria which are highly technically challenging.

What are you going to do that you have not done in the past to repair some of the damage done to your image?

I think we just need to maintain good communication with several stakeholders and government on one side. We also have to understand and relate with the media. Our company is not the one that deals with the media, our public domain is fairly limited but I think it is something we need to pay attention to in the future. We keep working with government bodies for a quick resolution of our current matters and we keep working in the country to restore our image both to the public and the various stakeholders.

And part of ensuring that is to make sure when mistakes are made, whether small or big within our company, they are dealt with. The consequences are sometimes high on the individual. This has happened during investigations into the tax issue. And I believe that has also happened in the TSKJ issue. Maintenance of code of conduct and business ethics is not going to be lowered by our company.