Halliburton confident oil's slide will not reduce orders

Dubai: Halliburton, the world's second- largest oilfield-services provider, said crude oil's 17 per cent slide this quarter is unlikely to reduce orders for drilling and exploration contracts.

"Customers are basing decisions on significantly lower oil prices, and they plan very long-term projects that don't switch on or switch off based on the oil price," CEO David Lesar said in a telephone interview from Houston on Wednesday. "I don't really see it having a major impact on our business."

Oil tumbled about $30 a barrel since setting a record $147.27 on July 11 on signs that demand in the US, which uses a quarter of the world's oil, and Europe will falter as the world economy slows. Prices are about 60 per cent higher than a year ago.

Halliburton opened a second headquarters in Dubai last year to court state-run Middle East oil companies. The company's biggest Middle East operations are in Saudi Arabia, the world's largest oil producer, where it's drilling wells for the Khurais oilfield.

Khurais project

Khurais will produce 1.2 million barrels a day once completed and is state-run Saudi Aramco's biggest project to boost capacity 11 per cent to 12.5 million barrels a day in 2009.

"Khurais is going very well and is coming to an end," said Lesar. "It is on track and on time."

Halliburton won a contract in April to provide offshore services at the Manifa field, which has an output target of 900,000 barrels of oil a day, making it Saudi Arabia's second-largest new project.

"We're just in the ramp-up phase and are waiting for some of the drilling rigs to become available, so that project is more ahead of us at this point in time," said Lesar. "We'll probably get started at the latter part of this year, but certainly as we get into early next year."

The Khurais field will operate by June 2009, and Manifa will add heavy crude from onshore and offshore fields from mid-2011, according to Aramco.

Lesar is heading to Argentina in a tour of Halliburton's South American projects. The company is growing fastest in Latin America, where second-quarter revenue rose by about 33 per cent, compared with a year earlier. Worldwide, the company has about 50,000 employees in 70 countries.

Halliburton's revenue outside of North America expanded 26 per cent year-on-year, exceeding the company's 20 per cent target, Lesar said.

He expects "robust opportunities" in most Middle Eastern countries where new technologies are required and contractors are in short supply.