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Halliburton, the US oilfield services and logistics group, has announced plans to wind down its work in Iran and dispose of its controversial KBR logistics business unit.

Analysts have valued KBR at about US$2.5bn and last year it received more than 20 unsolicited offers for the business.
The company’s energy services work in Iran through an offshore subsidiary has attracted negative publicity at a time of mounting tensions between Iran and the US over the Middle East state’s nuclear ambitions. Halliburton maintains it is adhering to US sanctions, but is the subject of a federal grand jury probe into its work in the Islamic republic.

Dave Lesar, chairman and chief executive officer, says contracts in Iran were “minuscule” within its broader business, but attracted “a disproportionate share of attention”.

Lesar adds that it would end work in Iran when its current contracts expired – although it could return “if US sanctions were lifted or more of our major customers go there”.

Halliburton says the Bush administration had not pressured the company to quit Iran. But diplomats say Washington’s efforts to persuade Japan and other allies to withhold investments from Iran had been undermined by the presence of US companies there.

Members of Congress from both parties are preparing to introduce legislation that would plug the loophole that allowed foreign subsidiaries of US companies to work in Iran. Halliburton’s decision to dispose of KBR follows years of losses from contract overruns and asbestos claims, as well as controversy over its contracts for the US government in Iraq and Kuwait.
The company has been forced to defend itself against allegations over billing irregularities and its relations with Vice-President Dick Cheney, who formerly headed Halliburton.
Lesar announced last October that the company would consider a sale, spin-off or flotation of KBR if it continued to drag on the group’s share price and financial performance.