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Halliburton Wins Iraq Oil Contract

Firm to rebuild industry in southern region despite allegations of overcharging for fuel.

January 17, 2004|From Associated Press

WASHINGTON — Despite a Pentagon probe into alleged overcharging for fuel delivered to Iraq, the Army awarded Vice President Dick Cheney's former company a contract Friday to rebuild Iraq's oil industry.

Halliburton won a competitive bid to rebuild the oil industry in southern Iraq, a contract worth up to $1.2 billion over two years, the Army Corps of Engineers said.

Last March, shortly after the U.S.-led invasion of Iraq, the Army gave Halliburton subsidiary KBR a no-bid contract to rebuild oil infrastructure throughout the country. The Army opened that contract for competitive bids last fall and split it into one for northern Iraq and one for southern Iraq.

The northern Iraq contract, worth up to $800 million, went to a joint venture of California-based Parsons Corp. and the Australian firm Worley Group Ltd.

Just days before the Army's award to Halliburton, Pentagon auditors asked for an investigation into possible criminal wrongdoing involving the no-bid KBR contract.

The Defense Contract Audit Agency last month questioned KBR's charges for gasoline it bought in Kuwait and trucked into Iraq for the civilian market. KBR, formerly known as Kellogg Brown & Root, charged more than double the price for gasoline from Kuwait than it did for gas from Turkey. Auditors said KBR may have overcharged the Army by as much as $61 million from May to September.

Halliburton has denied any wrongdoing.

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