May 9, 2003	Friday	Rabi-ul-Awwal 6, 1424

WASHINGTON, May 8: Oil giant Halliburton, once run by US Vice President Dick Cheney, will now be involved in operation and distribution of oil products in Iraq, the US military said on Wednesday, indicating a more direct role in Iraq’s energy business than originally believed.

New orders given to Halliburton subsidiary Kellogg Brown and Root a few days ago included the operation of oil facilities and the distribution of products, said a spokesman for the US Army Corps of Engineers, Scott Saunders.

“We did not think that operation and distribution (of oil products) would be needed and that that would be handled by a follow-on contract,” said Saunders.

“But the needs of the Iraqi people dictated otherwise and we had to exercise that option as they are about to run out of gas and propane,” he said.

Details of the role of the Halliburton subsidiary came to light via letters made public between the US Army Corps of Engineers and Democratic Rep. Henry Waxman from California.

In a letter sent on Tuesday to the Army Corps of Engineers, Waxman said originally the contract had been described as one to extinguish oil well fires and do related repairs, but Halliburton now appeared to have a more lucrative and direct role in rebuilding Iraq’s oil industry.

“It now appears however, that the contract with Halliburton — a company with close ties to the (Bush) administration — can now include ‘operation’ of Iraqi oil fields and ‘distribution’ of Iraqi oil,” wrote Waxman to Lt. Gen Robert Flowers of the US Army Corps of Engineers.

Waxman was replying to a letter from Flowers sent last week which said the scope of work included extinguishing oil well fires and cleaning up related damage as well as the “operation of facilities and distribution of products.”

When the Halliburton contract was first announced, some Democrats raised questions over whether the company’s close ties to the administration had helped it secure the work, a suggestion the White House rejects.

Cheney was formerly chief executive for five years of Houston-based Halliburton, the world’s second-largest oilfield service company.

Asked about Halliburton’s role in Iraq, White House spokesman Ari Fleischer said: “It’s not a White House issue ... the White House does not get involved in who gets contracts.”

Saunders said the contract for Halliburton’s subsidiary was worth about 75 million dollars so far and current estimates put the total amount at about 600 million dollars, far less than the worst-case figure of $7 billion before the war with Iraq.

“That seven billion dollars is pretty much out the window,” he said.

Halliburton declined to comment on possible extended operations, but repeated its previous statement that its Kellogg Brown and Root arm “will provide services for the continuity of operations of the Iraqi oil infrastructure.”—Reuters