Cheney’s Oil Firm Tenure Marked by Praise, Criticism

About two years ago, executives from petroleum industry giant Halliburton Co. were having trouble getting a face-to-face meeting with a top official in tiny, oil-rich Qatar.

The men had tried for months to talk with the country’s oil minister to discuss a potential project. No response. No interest. No meeting.

That was before their boss got involved: Dick Cheney, former Defense secretary, Persian Gulf War hawk and now the likely Republican vice presidential nominee.

“Within an hour, the meeting was facilitated and set up,” said Halliburton’s chief financial officer, Gary V. Morris, a tone of wonder in his voice. “Having access is a great thing.”

Cheney’s lengthy foreign affairs experience helped boost the overseas reach of Halliburton, the world’s largest provider of petroleum support services. But critics said his controversial support for lifting sanctions against Iran to boost the oil industry could haunt him as vice president.

Other analysts criticized Cheney’s hands-off style at the helm of the $14.9-billion company for hampering growth during the last bleak few years in the oil industry.

“He didn’t really lead the last two or three years, he didn’t set strategy,” said Bob Hinckley, a principal with Petroleum Research Group. “On his watch, the company could have been a lot more aggressive in handling change.”

On Tuesday, the Halliburton board of directors accepted Cheney’s resignation as chief executive officer and chairman of the company, effective Aug. 16.

When Cheney arrived at the company in October 1995 to head up Halliburton, the Dallas-based company was struggling to shed its image as an industry laggard with divided leadership.

The company had been losing market share and was reportedly forced to pay a $1.2-million fine to the Justice Department for shipping oil exploration equipment to Libya that had been banned for export because it could be used for military purposes.

Cheney threw his support behind efforts underway to retool the sprawling company, which today has more than 120,000 employees and performs such tasks as drilling oil wells and building military housing.

“He set a great strategy in place,” Morris said. “You can couch it as hands off if you want, but he made sure that there were active members of management making all this happen.”

For his efforts, Cheney was paid $1.28 million in salary and $640,914 in other compensation last year, plus stock options worth between $7.4 million to $18.8 million, depending on the company’s future stock performance, an examination of regulatory filings showed.

In 1998, he was paid $4.4 million plus stock options by Halliburton. He holds a $45.5-million stake as the company’s biggest individual stockholder.

According to documents filed by the company with the Securities and Exchange Commission, Cheney also holds $12.5 million worth of exercisable stock options.

Cheney’s tenure was notable for overseeing a $7.7-billion merger in 1998 with Dresser Industries Inc., an acquisition that made Halliburton the No. 1 provider of oil drilling services in the world.

And while some analysts have criticized the deal as being overpriced, others said on Tuesday that the benefits gained by Halliburton are just starting to be felt.

But perhaps the most notable role Cheney played was in the foreign contacts he brought to Halliburton, a multinational with operations in more than 120 countries, ranging from oil wells off the coast of Brazil to military housing in Kosovo.

He has repeatedly insisted on dropping sanctions against Iran, calling for their end as recently as last month during a meeting of the World Petroleum Congress in Calgary, Canada. That brings Cheney into direct confrontation with some congressional officials and Jewish groups, who fear Iran is still intent on developing missiles capable of bombing Israel.

“He has a pretty good pro-Israel voting record,” said one official with a Jewish group. “It’s certainly not perfect.”

Another benefit to Halliburton, some said, came in winning Defense Department contracts. Shortly after Cheney began, Halliburton won an ongoing contract worth more than $1 billion to provide infrastructure support for the U.S. military in the Balkans.

Halliburton officials strenuously denied that Cheney’s connections played a role in winning the contract. But some analysts noted that his old job title couldn’t have hurt the company then--nor would it in the future.

“It doesn’t hurt to have him become the potential number two person in the U.S. government,” said Wesley N. Maat, a senior analyst with Deutsche Banc Alex. Brown “He’s going to keep his friendships.”