On January 11, 2005, Iran announced publicly that it had just concluded a contract with the U.S. Company, Halliburton, and an Iranian company, Oriental Kish, to drill for gas in Phases 9 and 10 of South Pars. Under the deal, a Halliburton subsidiary registered in the Cayman Islands, but doing business out of Dubai, Halliburton Products & Services Limited (HPSL), was awarded a subcontract from the Iranian firm Oriental Kish to provide some $30 million to $35 million worth of engineering services per year through Oriental Kish. HPSL had also previously been engaged, since 1995 in several other offshore oil and gas drilling and related engineering projects in Iran. In addition to its Dubai headquarter, the company reportedly also maintained an operational office in Tehran.
Halliburton’s position is that the transactions involving HPSL do not violate US sanctions since Halliburton does not exercise direction or control of HPSL’s activities. They point out that Halliburton Product and Services has no American employees; that its 5 person board of directors consists of four British citizens and a Canadian citizen, but no Americans; and that the “day to day” management and decision-making responsibility at HPSL resides with the Management Director (who is a British citizen) and other local management, all of whom reside in Dubai.” Nevertheless, revelation of this Iran project led to a public outcry.
In response, Halliburton subsequently announced that all Halliburton employees would be withdrawn from Iran and that it would end its pursuit of future business in Iran, apart from the ongoing Oriental Kish deal.