Halliburton rode the crest of the oil boom, and though the days of the Texas oil baron have come and gone, the company is holding its own. It's no wonder, since the CEO is former U.S. Defense Secretary Dick Cheney and Dallas Cowboys Hall of Famer Roger Staubach is on the board. Headquartered in Houston, Halliburton has operations throughout North America, Mexico, and Central and South America. The company is divided into three business units: Energy Services, Engineering and Construction, and the Dresser Equipment Group. Each of those units is comprised of smaller business groups.

Breakdown

The Energy Services Group consists of Halliburton Energy Services, Brown & Root Energy Services, and the Landmark Graphics Corporation, which develops software and information technology solutions for oil exploration. In the Engineering and Construction Group, Kellogg Brown & Root serves energy, petrochemical, and refinery businesses. Brown & Root Services specializes in engineering, construction, management, and technology services for government institutions and non-energy businesses. The Dresser Equipment Group manufactures meters, pumps, engines and other products for petrochemical, manufacturing, and energy companies. The company is nearing the end of a three-year process to further integrate the components of its various units.

A better method

Erle Halliburton founded the company as Better Method Oil Well Cementing Company in 1919. By lining oil wells with steel pipes held in place with cement, Halliburton proposed that oil companies could strengthen the well walls, reduce the risk of explosions, and prevent contamination of the water table. No one caught on, however, until years later. Halliburton didn't even make a profit until 1921; and even then, it was a mere 50 cents. The company was incorporated in 1924, and Halliburton patented his idea - so oil companies were forced to use his company if they wanted their wells lined.

Preparing for the oil boom

In the 1950s and 60s, Halliburton acquired a number of oil companies, including Brown & Root, which specialized in the construction of offshore drilling platforms. These investments placed the company in a prime position for the 1970s oil boom. Later that decade, Halliburton led the industry in stimulating stagnant wells with new technology. When the oil industry slipped in 1982, Halliburton stayed afloat by avoiding further energy investments and by cutting its workforce. The company began reinvesting in energy services in the late 1980s and bought the Geophysical Services unit of Texas Instruments.

Expansion abroad and at home

The company expanded overseas in the 1990s, reaching into Moscow, China, India, and Asia through a combination of acquisitions and joint ventures. The company launched a restructuring in 1993, eventually merging all of its independent divisions under the parent company. In 1995 Halliburton drilled the world's deepest horizontal well (18,860 feet) in Germany. Dick Cheney was appointed CEO that year, and since then Halliburton has grown from a second-tier player in the industry to the largest oilfield service, engineering, and construction company in the world. It offers more services to the oil industry than any of its competitors.

A little extra with dresser

In 1998, Cheney negotiated a strategic (and extremely lucrative) merger with Dresser Industries, one of Halliburton's biggest rivals. Halliburton nearly doubled in size and jumped to the number one spot in the industry, with estimated 1999 revenues of $20 billion. With its newly augmented arsenal of products and services, the company has been able to beat out its rivals for contracts ranging from designing and building systems to oilfield operation and production management. Unfortunately, the cost of the integration process coupled with sinking oil prices has resulted in the elimination of more than 9,000 jobs in the Energy Services division.

Contracts soar

In 1999, the company's Brown & Root Energy Services division was awarded a contract to provide logistics support for the U.S. forces in Albania. Brown & Root International was also selected to build a petrochemical plant in Qatar by 2002; Brown & Root will provide the ehtylene technology required to build the plant. The Halliburtion Energy Development business unit was also incorporated into the Halliburton Energy Services division to provide more integrated solutions to its customers. Halliburton was awarded a two-year contract by the U.S. Department of State in 1999 to provide security improvements at U.S. embassies and consulates as well. Kellogg Brown & Root, meanwhile, purchased a stake in Japanese engineering company Chiyoda and Halliburton purchased the 74 percent of PES International Ltd. that it did not already own for $132 million. Furthermore, Halliburton and BP Exploration built the largest producing well in the Gulf of Mexico in 1999 through a program known as the Troika Project. Halliburton plans to ally with Tri-Village Oil & Gas to provide the company with technical services and support for the completion of its Project Ekho which focuses on excavating four billion barrels of crude oil from the San Joaquin Valley of California in the near future also.

Getting Un-Dresser-ed