Poor performance in the engineering and construction market is forcing Halliburton to restructure. Landmark, along with Halliburton Energy Services will migrate into a new business unit, the Halliburton Energy Services Group which will also include large integrated projects that include both surface and sub-surface components, and the following businesses that were formally part of Brown & Root Energy Services - Halliburton Subsea, Wellstream, Production Services, Granherne, Bredero-Shaw joint venture and the EMC joint venture.
The poorly performing engineering and construction business is to be consolidated into the Engineering and Construction Group. The upstream oil and gas engineering and construction, fabrication capabilities as well as the traditional engineering and construction business will be under Kellogg Brown & Root management. Individual brand identities will be maintained. The company said that under current business conditions it will focus on core engineering and construction competencies for the energy, civil and government markets.
$ 120 million charge
This will result in recording approximately $120 million after tax charges in the fourth quarter related to restructuring and charges on projects of the engineering and construction businesses. Halliburton chairman David Lesar said “We are very disappointed that the high price oil and gas environment has not yet translated to increased spending by our customers on engineering and construction projects. The overwhelming majority of our projects are executed efficiently and profitably. We continue to identify ways to mitigate increased costs and aggressively negotiate claims resolution with our customers.”
“On a positive note, we are very pleased with the continuing strong performance at Halliburton Energy Services, Landmark and Dresser Equipment Group. Our efforts on selling the Dresser Equipment Group are proceeding with bids due this week. We plan to be in negotiations with leading bidders by early in January” Lesar concluded. The company also announced that it has now purchased in excess of twenty million shares of its stock under the previously announced stock repurchase plan.
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