Halliburton: Expects To Be Fully Indemnified By Contracts

Halliburton Co. (HAL) said Wednesday that it expects to be fully indemnified from all claims and expenses resulting from the oil spill moving through the U.S. Gulf of Mexico.

Halliburton performed the cementing job and other services related to the development of the blown-out deepwater well has produced the biggest oil spill in U.S. history. The oilfield-services provider is working with BP PLC (BP,BP.LN)), the company responsible for the spill and the cleanup effort, to stanch the flow of oil by assisting with the drilling of relief wells that are intended to stem the flow of oil.

"Halliburton is continuing to devote significant resources to assisting in well control and relief-well efforts," Tim Probert, Halliburton's president of global business lines, said during a conference call with investors.

Executives said the company is confident that it will be protected from any claims resulting from the spill. The company also maintains about $600 million in general liability insurance.

The Houston-based company has been in the spotlight since the late April explosion and sinking of the Transocean Ltd. (RIG) rig Deepwater Horizon that killed 11 workers. Oil has continued to flow from that well unabated as BP Wednesday worked to shear off a piece of leaking pipe and lower a containment unit in an effort to capture the oil.

Halliburton executives said the company's customers are working toward temporarily abandoning wells in the U.S. Gulf, where the federal government has issued a moratorium on new deepwater well construction permits and drilling activity.

U.S. President Barack Obama, facing a political uproar over the spill, Thursday halted much of the planned or current exploratory drilling off U.S. coasts, including all 33 rigs developing exploratory wells in the deep waters of the Gulf.

Probert said some operators are considering shifting drilling activity overseas or drilling wells in less than 500 feet of water. Its customers are also looking at well maintenance activities.

"The goal of many operators is really to keep all of their rigs working on value-added activities," Probert said.

Halliburton is working to place its workers in the Gulf in other areas of the company while activity is stalled in the Gulf. The company's revenue from the U.S. Gulf of Mexico represents about 16% of its North American revenue in 2009.

-By Jason Womack, Dow Jones Newswires; 713-547-9201; jason.womack@dowjones.com

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