DUBAI, 14 March 2007 — US oil services giant Halliburton’s surprise decision to relocate from Texas to Dubai has boosted the Gulf emirate’s ambitions to be a major player on the international financial scene. “It’s very positive for the United Arab Emirates and Dubai especially,” said Monica Malik, chief economist at Standard Chartered Bank. “It’s just the sort of thing that Dubai wants. It’s a place that companies can use as a hub for the wider region,” she told AFP.
Halliburton said on Sunday that its chief executive officer and chairman, Dave Lesar, would move to Dubai, one of the seven emirates that make up the UAE, to reflect the growth in oil exploration and production in the region. Nearly 40 percent of the company’s oil services revenue totaling $13 billion came from the area in 2006.
Dubai’s flexible fiscal policy, free-zone set-up and a stable business-minded government have turned the emirate into an area ripe for overseas investment and lured top international blue-chip firms seeking to cash in on the Gulf region.
Located in the Middle East, Dubai will also see the Halliburton move as a vindication of its stability and relatively liberal attitude. The move will probably be considered by some in Dubai as sweet revenge after the humiliating setback suffered last year, when the US Congress blocked Dubai Ports World’s acquisition of operations at six US ports over security fears.
Halliburton’s decision — which sparked a political firestorm in the United States — coincides with the emirate’s recently unveiled strategic plan for 2007-2015.
The plan aims for annual growth of about 11 percent by focusing on the sectors where Dubai has a competitive advantage such as trade, tourism, financial services and transportation.
“The move (by Halliburton) cements its position,” said Mustafa Alani, senior adviser at strategic think tank Gulf Research Center. “Whether it’s financial, the service industry or connectivity, Dubai is now a major player.” He said there were “political as well as practical motives” for the decision by the company that was headed by Dick Cheney from 1995 to 2000 before he became US vice president. “Halliburton has been linked heavily with US foreign policy and military activities in Iraq and may have faced difficulties from public opinion elsewhere in the region,” Alani said. “In Dubai, trade comes first, while politics is further down the list,” he said.
“It is yet another company taking advantage of the infrastructure built up in the emirate,” said Zahed Chowdhury, head of Middle East company research at Deutsche Bank. “Be it transportation, IT or storage, Dubai has it all.”