I have all but quit reading the Houston Chronicle so I didn’t see this article come out. It’s about how KBR is trying to move away from the “soul sucking” shadow that looms over them. They call it Halliburton. They are trying to the blame bad press and poor quality work on Halliburton. Halliburton and KBR had been split almost two years when SSG Ryan Maseth was killed. It’s clear by the comments on the Houston Chron’s article that KBR probably asked it’s employees to comment positively. They are desperate for some positive publicity. Be sure to sign in or sign up and leave your comment and vote on comments. “thumbs up” or “thumbs down”. Either Read it below or click HERE.
KBR moves forward, one step at a time
By BRETT CLANTON Copyright 2009 Houston Chronicle
March 13, 2009, 11:41PM
With a major foreign bribery case recently settled, other legal issues wrapping up and its financial performance improving, KBR is finally moving forward, less burdened than ever before by the weight of its past.
Recently, William Utt, chief executive of the Houston-based engineering and construction firm and government contractor, even went so far as to say, “It’s a new day at KBR.”
But the company, which was spun off from oil field services giant Halliburton Co. in April 2007, still faces a tough road.
With the global economy in a tailspin, KBR is feeling pressure as customers delay or reduce spending on large-scale energy projects for which the company is known.
It also expects less U.S. troop-support work in the Middle East as a new contract is divvied up among several firms and the Obama administration moves to withdraw from Iraq.
And, while some legal matters are coming to an end, several other cases involving complaints about the firm’s work in Iraq remain unresolved, keeping the company in the headlines and adding bruises to its already banged-up image.
Utt, in an interview with the Chronicle at his downtown office, said that despite ongoing challenges, the company is stronger than it’s been since he took the reins in March 2006.
“When I got here, there was really, I sensed, an apathy on the part of our employees that they couldn’t make a difference in terms of their performance. They were buried within Halliburton,” he said. “Now that we’re out by ourselves, people can see firsthand how our business is going.”
Infrastructure work
KBR is doing work on some of the world’s biggest energy infrastructure projects, including Chevron Corp.’s massive Gorgon liquefied natural gas venture in Australia and a ConocoPhillips- and Saudi Aramco-backed oil refinery in Yanbu, Saudi Arabia.
Though some have slowed, KBR so far has not seen any major project cancellations within its $14 billion book of orders, nor laid off workers because of the economic downturn, Utt said.
“These projects are four and five years in duration, so investors look beyond today’s $35 and $40 oil price. They see several years from now a very different market.”
Elsewhere, KBR is rebuilding its domestic construction and services business and expects bigger proceeds in coming years from five acquisitions it made in 2008, including a $550 million deal to buy Birmingham, Ala.-based construction company BE&K.
As part of the effort, KBR may also be on the hunt for acquisitions that could beef up its presence in the Gulf of Mexico, where the company built the first offshore platform in the 1940s and sees new opportunity for growth as deep-water discoveries come on line in coming years, Utt said.
Time to wind down
While the company’s troop-support work in Iraq will soon decline, KBR will need time to dismantle its 85,000 facilities in the country and move equipment and people out. There could also be new contracts in Afghanistan as the Obama administration puts greater focus there, he said.
Halliburton, which began spinning off KBR in late 2006 through an initial public offering, wanted to cut ties with KBR to focus on its more profitable oil field services business.
But since the split, KBR has had to deal with a host of issues dating back to its time within Halliburton.
Last month, the biggest of those was resolved, when Halliburton and KBR agreed to pay $579 million to the Justice Department and Securities and Exchange Commission to settle foreign bribery allegations in Nigeria. Though KBR’s obligation was just $20??million, the deal removed the threat of a bigger financial hit to the company and concluded an issue that Utt estimated consumed 10??percent of his time as CEO.
Other major legal matters, including an ongoing contract dispute with Mexico’s state-owned oil company, should be resolved by month’s end, Utt said.
Civil lawsuits linger
Andy Kaplowitz, industry analyst with Barclays Capital, applauds Utt’s efforts in cleaning up the company.
“KBR doesn’t have nearly the same risk factors it did three years ago when he took over,” he said.
But several civil lawsuits related to Iraq will take longer to close, including a case alleging KBR knowingly allowed troops to be contaminated by toxic well water and another alleging soldiers were electrocuted while showering in a building wired by KBR.
Utt denies KBR was at fault in either case, and he said the company continues to receive good grades from the Pentagon for its work serving meals, doing laundry and performing other nonmilitary tasks for the U.S. Army in the Middle East.
Nevertheless, the lawsuits create “noise” around KBR that could continue to weigh on the company’s stock price, Kaplowitz said.
Utt acknowledged his surprise about the staying power of criticism against KBR, but said it comes with the territory of being head of a company that does things few others are willing or able to do.
“It does take thick skin,” he said, “to sit in this chair.” (click HERE to read the original article)
I just finished my segment on Stand Up! with Pete Dominick which is a political talk show broadcast from 3-6pm EST on the POTUS satellite radio channel – Sirius 110 / XM 130 and boasts 18.5 million listeners.
