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Vice president's old firm gets Iraqi oil well contract

March 26 2003, 8:44 AM

The US army said today it had given the main Iraqi oilwell firefighting contract to a unit of Halliburton Co, a firm once run by Vice President Dick Cheney, without any bidding.

Kellogg, Brown and Root, a unit of Houston, Texas-based Halliburton, was handed the contract by the Army Corps of Engineers, which has been placed in charge of fighting the blazes.

The contract had not been put out to tender, said the Corps spokesman, Lieutenant Colonel Gene Pawlik.

Kellogg, Brown and Root (KBR) had already been asked by the Pentagon to draw up plans for extinguishing oilwell fires in Iraq, Pawlik noted.

"It made the most sense to engage them in the near term as the company to get the mission done because they were familiar with the details of the fires themselves and what would be needed," he said.

The value of the contract would depend on scale of the work.

The chief of Britain's armed forces, Admiral Sir Michael Boyce, said on Friday that Iraqi forces had set fire to seven oilwells in the south of the country.

KBR would claim the cost of its services plus two to five per cent depending on how it executed the job, Pawlik said.

"KBR was selected for this award based on the fact that KBR is the only contractor that could commence implementing the complex contingency plan on extremely short notice," the company said in a statement.

KBR said it had teams of well control and engineering contractors preparing the initial phase.

The company was given a free hand to choose subcontractors for the work, the Corps spokesman said.

KBR chose Houston-based Boots and Coots International, with which it has a services and equipment partnership, and Wild Well Control Inc as firefighting subcontractors.

President George W Bush's spokesman, Ari Fleischer, said he did not have the details.

Asked about the contracting process, Fleischer told a news conference: "The question that people want to be answered is we have a plan in place to put out the oil fires. Refer your question to the agencies involved. I am not familiar with the details of this contract."

In a statement late yesterday, the Defence Department said the Army Corps of Engineers would rely largely on contractors to extinguish the oilwell fires and assess the damage to facilities.

Kellogg, Brown and Root was the prime contractor for the initial phase, the Pentagon said. The contract would be in force for an interim period, until additional contracts were procured, it said.

Subcontractor Boots and Coots welcomed its selection.

"We have surveyed these wells and are preparing to mobilise the equipment," Boots and Coots president Brian Krause said in a statement.

"We will begin stabilisation of the wells once the location around the wells is secure," he said.

Boots and Coots was brought into Kuwait in 1991 to control about 240 of more than 700 burning wells following the Gulf War, it said.

Cheney was chief executive of the KBR parent company Halliburton, a major oil services company, for five years until 2000.



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