2007 Corporate Sustainability Report - Halliburton

HALLIBURTON 

Corporate Sustainability Report 2007 

It starts with me.

Table of Contents 

2 

Chief Executive’s Message 

4 

Organization Profile 

10 

Economic Profile 

19 

Environment Profile 

28 

Social Profile 

Major Operating Hubs 

12 in the Western Hemisphere 

14 in the Eastern Hemisphere

It isn’t just one thing. 

“Sustainability” is a big word whose meaning broadens with 

every use. It incorporates reducing environmental impacts, 

increasing our local sourcing of goods and services, and corporate 

governance. It has as many different meanings as the diversity 

of people who put it into practice on a personal level, and it has 

many meanings for a company as vibrant as Halliburton. 

We place a high priority on sustainable technologies, like our 

hydraulic fracturing fluids developed especially for use in coalbed 

methane and coal mine methane fields. We build sustainable 

relationships, as typified by the training programs we offer at our 

Tyumen, Russia, training center in cooperation with the Tyumen 

State University of Oil and Gas. Sustainable sourcing in developing 

areas like Angola helps solidify our future and the futures of the 

communities in the countries where we have a strong presence. 

The ongoing study, investment and vigor we dedicate to 

sustainability have yielded outstanding results. Even our 

sustainability “growing pains,” far from being discouraging, 

motivate us to expanded thinking and bolder objectives. 

Thank you for taking time to review this report. When 

you finish reading it, perhaps you will strengthen 

your own commitment to sustainability.

A variety of factors made 2007 a successful year for Halliburton. 

We completed our separation from KBR to become a pure oilfield services 

company, a goal that had been in our sights for some time. Our company 

vision – to be the preferred upstream service company for the development 

of global oil and gas assets – looks ahead to expanding possibilities, 

even as we narrow our focus to Halliburton’s original enterprise. 

A Letter from 

Dave Lesar 

Chairman of the Board, 

President and Chief Executive Officer 

of Halliburton 

Our sustainability strategy, with its emphasis on sustainable relationships, 

sourcing and technology, will play a central role as we proceed through 

2008. Our accomplishments in locations such as Angola, Brazil and 

the U.K. have been outstanding, and, with an exceptional depth of 

commitment at every level of our organization, our sustainability 

record will continue to progress and, ultimately, to shine. 

We have made tremendous strides toward our goal of increasing our 

business in the Eastern Hemisphere, with our activity there reaching 

a new high in the company’s history. Our growth in this region is 

supported by the opening in November 2007 of a new technology center 

in Pune, India; the launch of a new training center in Tyumen, Russia; 

and new manufacturing plants in Malaysia and Singapore. We look 

forward to a 2008 opening for our Singapore Technology Center. 

We continue to focus on building the workforce we need to sustain 

the operational excellence our customers have grown to expect, and to 

continue the surge in our standard-setting technologies. We hired more 

than 13,000 people in 2007. With 38 percent of our workforce having 

less than two years of service, the efforts of our Human Resources team 

to accelerate the development of every employee will help us continue to 

thrive even through what has been called the “Big Crew Change” – the 

retirement in the coming years of thousands of “baby boomers.” 

It is with deep sorrow that we report four employee deaths in 2007. 

Our company takes an unyielding stance on safety: One is too many. 

Until every employee goes home safely every day, no year, no matter 

how financially stellar, can be called an unqualified success. We will 

honor our lost colleagues by challenging ourselves to be 100 percent 

free of such tragedies in 2008 and we will do everything possible, 

corporately and individually, to achieve that essential objective. 

In keeping with the long-established wisdom that “what is past is prologue,” 

our successes in 2007 become the standards we will aim to exceed in 

2008 and beyond. Achieving continued financial performance for our 

shareholders, attracting and retaining top talent, developing technologies 

that advance the industry while contributing to our goal of sustainability 

– all these factors form the foundation for our company’s bright future. 

2 Corporate SuStainability report 2007

Corporate Sustainability Report 2007 3

Organization Profile 

Halliburton is an oilfield services company, adding value through the entire 

life cycle of oil and gas reservoirs. We provide services to upstream oil and 

gas customers worldwide, from locating hydrocarbons and managing 

geological data to drilling and formation evaluation, well construction and 

completion, and optimizing production through the life of the field. 

Our organizational structure, which is 

built around our Eastern Hemisphere 

and Western Hemisphere regions (see 

inside front cover), enables decisionmaking 

based on factors specific to the 

local areas. In 2007, with the finalization 

of the split with KBR, we streamlined 

our operations into two divisions (down 

from three in 2006): the Completion 

and Production Division and the 

Drilling and Evaluation Division. 

We call Houston, Texas, our hometown, 

with our corporate headquarters located 

there since 2003. In 2007, we added 

a second corporate headquarters in 

Dubai, United Arab Emirates, and 

Dave Lesar our chairman, president 

and CEO resides and works there. 

We do business in approximately 70 

countries, with major operations in 

Algeria, Angola, Argentina, Australia, 

Brazil, Canada, China, Egypt, Indonesia, 

Mexico, Nigeria, Norway, Oman, 

Russia, Saudi Arabia, Thailand, United 

Arab Emirates, the U.K., the U.S. and 

Venezuela. Like our dynamic industry, 

we are fully global, with over 50,000 

employees from 121 different countries, 

working on six of the seven continents 

and on the oceans in between. 

Halliburton 

Drilling and Evaluation 

Completion and Production 

Landmark 

Cementing 

Sperry Drilling Services 

Completion Tools 

Security DBS Drill Bits 

Production Enhancement 

Baroid Fluid Services 

Wireline and Perforating Services 


Halliburton’s vision is: 

To be the preferred 

upstream service company 

for the development of 

global oil and gas assets. 

Halliburton’s 

2007-2009 strategy is: 

To secure our leadership 

as a pure-play oilfield 

service company by 

leveraging our existing 

strengths; balancing 

our global platform 

of products, services, 

technology and markets; 

and establishing a 

distinctive competitive 

position that provides 

sustainable growth 

over time. 

Our strategy is supported 

by three key elements: 

• Extend our historic leadership 

in well construction, completion 

and production enhancement 

• Strengthen our competitive 

positions in directional drilling, 

drill bits, drilling fluids, and 

wireline and perforating services 

• Enhance global competitive strength 

with meaningful acquisitions that 

provide a competitive advantage 

in key market segments and 

balance our portfolio in terms of 

geography and product lines. 

Several significant achievements in 

2007 reflect the momentum already 

generated by our new strategic focus: 

• Looking to the east – To strengthen 

our presence in the Eastern 

Hemisphere, we established our second 

corporate headquaters in Dubai, 

United Arab Emirates. The oil and gas 

business is moving its focus from the 

increasingly difficult reserves of the 

Western Hemisphere to the bounty 

of the Eastern Hemisphere. As the 

customers we serve make this shift, 

we are expanding eastward to give 

us new manufacturing capacity; to 

move us closer to key markets; and 

to help reduce the cost of moving 

materials, products, tools and people. 

• Separation of KBR – On April 5, 

2007, Halliburton announced that 

the final separation from KBR Inc. 

was completed. The two companies 

are separate and independent from 

each other, with all of the government 

services and engineering and 

construction businesses remaining 

with KBR. As a pure oilfield services 

company, Halliburton now can focus 

on the global growth opportunities 

in its core energy services business. 

• New technology center – We opened 

a new technology center in Pune, 

India, enabling us to focus on our 

growth in the Eastern Hemisphere 

and to take advantage of the 

availability of exceptional local 

talent. This is the companys first 

globally focused technology center 

outside North America and Europe. 

• New manufacturing centers – We 

opened new manufacturing facilities 

in Mexico, Brazil, Malaysia and 

Singapore. These facilities give us 

the local presence to capture growth 

in both mature markets and in key 

emerging markets within the Eastern 

Hemisphere for the foreseeable future. 

• Mergers and acquisitions – We 

completed the acquisition of Calgary, 

Canada-based Ultraline Services 

Corporation, providing wireline 

services; OOO Burservice, a Russian 

directional drilling service company; 

and PSL Energy Services Limited, 

a U.K.-based well-intervention 

and pipeline services company. 

• Technology innovation – In 2007, 

we were winners of three Hart’s 

E&P meritorious engineering 

achievement awards, three World 

Oil awards and the 2007 Offshore 

Technology Conference Spotlight 

on New Technology Award. 

• Dow Jones Sustainability Index – 

Our overall score in the Dow Jones 

Sustainability Index (DJSI) improved 

by 25 percent over 2006. We were 

sector leaders in three categories: 

Risk and Crisis Management, 

Codes of Conduct/Compliance/ 

Corruption and Bribery, and 

Customer Relationship Management. 

Halliburton scored above the sector 

average in 11 other categories. 

• Sexual orientation has been added 

to those policies in our Code of 

6 Corporate Sustainability Report 2007

Business Conduct (COBC) that 

relate to harassment and equal 

employment opportunity. 

• We implemented a new Joint Venture 

(JV) and Non-Wholly Owned 

Subsidiary (NWOS) policy in February 

2007. This policy establishes a process 

for designating which Halliburton 

policies and business practices a JV 

or a NWOS will be asked to adopt. 

Meeting Continuing 

Challenges: It starts 

with vision. 

No company can afford to rest on 

it's past successes. Long term success 

is based on the ability to anticipate 

and meet today's and tomorrow's 

challenges and opportunities at the 

global and local level. With planning, 

strategic thinking and anticipation, 

we examine every challenge 

through the lens of opportunity. 

Expanding our technology footprint 

by globalizing our technology 

centers will put us in closer contact 

with our client base and allow us to 

take advantage of a workforce with 

greater diversity in talent, educational 

backgrounds, skill sets and solutions. 

Services’ ReFlexRite® multilateral system. 

The ReFlexRite system technology is 

an important step toward extending 

the productive life of existing wells in 

mature fields in a cost-effective manner. 

We continue to focus on our safety 

performance. In 2007, we had four 

employee fatalities. Nothing we do is 

more important than eliminating loss of 

life in our operations. We experienced 

decreases over 2006 in our Total 

Recordable Injury and Lost Time Injury 

rates. We continue to regard the safety 

of our employees as a core value and as 

the first consideration in everything we 

do; we will not be satisfied until we have 

achieved our goal of zero incidents. 

Talent attraction and retention remain 

among our key ongoing business 

challenges. No business can succeed 

without the ability to acquire and retain 

an educated and motivated workforce. 

In 2007, we increased hiring, reduced 

turnover and accelerated employee 

training over the previous year. These 

challenges remain at the forefront 

of all of our business activities. 

Climate change is increasingly 

seen as a major factor for business. 

Reducing carbon emissions is good 

business and presents new business 

opportunities. Finding ways to 

take advantage of this issue is seen 

as a key business opportunity. 

Awards: It starts with setting 

the bar very, very high. 

Aiming high tends to make 

Halliburton people high achievers. 

It is not surprising, then, when our 

company and our people win industry 

awards, gaining global recognition 

for the innovative work we do for our 

customers, and for the exemplary ways 

in which we conduct our business. 

January 2007 – Halliburton won the 2007 

Offshore Energy Achievement Award in 

Well Construction for Sperry Drilling 

March 2007 – Halliburton was named 

at the 2007 Offshore Technology 

Conference as a recipient of the Spotlight 

on New Technology Award for the 

Honey Comb Base (HCB) tank system 

for cuttings storage and discharge. 

April 2007 – Halliburton won three 

Hart’s E&P meritorious engineering 

achievement awards. Halliburton’s 

three prize-winning technologies were: 

the ReFlexRite multilateral system; 

AssetPlanner software; and the 

SuperFill surge reduction system. 

May 2007 – Halliburton was chosen 

by the Engineering, Science and 

Technology Council of Houston 

to receive an award for Excellence 

in Education in recognition of the 

Project Energy Teacher Workshop 

held at the Offshore Energy Center. 


June 2007 – For the second year in a 

row, Halliburton was selected as one 

of the Best Places to Work in Houston 

by the Houston Business Journal. In 

our category, companies with more 

than 500 employees, our ranking 

climbed from 12th place in 2006 to 

eighth on the 2007 list. Halliburton 

is the only energy services company 

to rank in this elite category. 

September 2007 – In tough competition 

among five corporate contenders, 

Halliburton won the Supplier Diversity 

Innovation Award from the Houston 

Minority Business Council. 

October 2007 – Halliburton won three 

2007 World Oil awards. Senior Technical 

Advisor Dr. Philip Nguyen received 

the 2007 Innovative Thinkers Award; 

Halliburton’s DepthStar® tubingretrievable 

safety valve (TRSV) was 

named Best Completion Technology; 

and TOTAL Indonesie received the 

Health, Safety, Environment/Sustainable 

Development Award for a project in 

which it used Baroid Surface Solutions TM 

service. Additionally, two other 

Halliburton employees were finalists for 

the Innovative Thinkers Award, and the 

company was represented by finalists 

in six of the other 11 award categories. 

October 2007 – Ingrid Robinson, 

manager of Global Supplier Diversity, 

was named “Best of the Decade” 

in Supplier Diversity by Women’s 

Enterprise USA magazine. 

November 2007 – The Society of 

Petroleum Engineers Regional 

Distinguished Corporate Support 

Award, which recognizes “excellence 

in leadership and … the commitment 

of time, energy and professional 

resources” to the engineering field, 

was presented to Halliburton for the 

work we do with students during 

National Engineering Week. 

Governance: It starts 

with integrity. 

Corporate governance is a matter of 

enabling the company to serve the 

best interests of all its stakeholders 

efficiently, profitably and, above all, 

honorably. Halliburton’s affairs are 

governed by its board of directors, 

whose responsibilities include: 

• Evaluating the performance of the 

chief executive officer and, with the 

compensation committee, setting 

his compensation for the next year 

• Reviewing succession plans and 

management development programs 

• Reviewing and monitoring corporate 

performance against long-term 

strategic and business plans 

• Adopting policies of corporate conduct 

• Evaluating annually the overall 

effectiveness of the board 

• Reviewing matters of 

corporate governance. 

Number and Types of Committees 

A substantial portion of the analysis 

and work of the board is done by 

the following four standing board 

committees: Audit; Compensation; 

Health, Safety and Environment; and 

Nominating and Corporate Governance. 

Each committee’s charter is reviewed 

periodically by the committee and the 

board. Reports on each committee 

meeting, along with copies of the 

minutes, are presented to the full 

board. Any director appointed to a 

committee is expected to participate 

actively and fully in meetings. 

Chairman of the Board and 

Chief Executive Officer 

The chief executive officer of Halliburton 

also serves as the chairman of the board, 

and is responsible to the board for the 

overall management and functioning 

of Halliburton. The board comprises 12 

directors, 11 of whom are independent. 

In 2007, a second woman was added 

to the board, which now has two 

women and one minority member. 

Two-thirds of the board members 

must be independent directors. 

Halliburton meets the minimum 

requirements for director independence 

as established by the U.S. Securities 

and Exchange Commission. 

The definition of “independence” is 

reviewed periodically by the nominating 

and corporate governance committee. 

All directors complete independence 

questionnaires at least annually, and 

the board makes determinations of 

the independence of its members. 

Shareholder and Employee 

Communication with the Board 

Halliburton has a process designed 

to help Halliburton’s shareholders 

communicate easily and effectively 

with the board of directors. The process 

was approved by the board and meets 

the requirements of the New York 

Stock Exchange and the Securities and 

Exchange Commission. Methods of 

communication with the board include 

mail (Board of Directors, c/o Director 

of Business Conduct, Halliburton, 1401 

McKinney St., Suite 2400, Houston, 

Texas 77010, U.S.); telephone (888-312- 

2692, toll-free; or 770-613-6348); and 

e-mail (boardofdirectors@halliburton. 

com). Information regarding these 

methods of communication is also on 

Halliburton’s Web site, www.halliburton. 

com, under “Corporate Governance.” 


Halliburton’s director of business 

conduct, a company employee, reviews 

all shareholder communications 

directed to the board of directors 

through these methods. Any significant 

communication involving accounting, 

internal accounting controls or auditing 

matters is referred to the chairman of 

the audit committee; the lead director is 

promptly notified of any other significant 

shareholder communications. A report 

summarizing communications is sent 

to each director at least quarterly, 

and copies of communications are 

available for review by any director. 

Conflicts of Interest 

Significant Performance Indicators 

Fatalities 

7 

2004 

2 

Contractors 

0 0 

2005 

Halliburton Employees 

Operating Income 

in millions of U.S. dollars 

5 

2006 

$3,245 

4 

0 0 

2007 

$3,498 

If an actual or potential conflict of 

interest develops because of significant 

dealings or competition between 

Halliburton and a business with which 

a director is affiliated, the director must 

report the matter immediately to the 

chairman of the board for evaluation 

by the board. Such a conflict must be 

resolved, or the director should resign. 

If a director has a personal interest 

in a matter before the board, the 

director must disclose the interest to 

the full board, excuse himself from 

participation in the discussion and 

abstain from voting on the matter. 

Code of Business Conduct 

$2,164 

$1,179 

2004 

2005 

2006 

Done Right® Services Index* 

91.4% 

92.3% 92.9% 

2004 

2005 

2006 

* See discussion on page 27. 


96.2% 


Halliburton takes seriously its 

responsibility to make sure every 

employee is aware of, and committed 

to upholding, the company’s COBC 

policies. As the company Web site 

states, “The Halliburton company 

Code of Business Conduct is a guide 

for every company director, officer, 

employee and agent in applying legal 

and ethical practices to their everyday 

work.” It may be reviewed at the Web 

site: http://www.halliburton.com. 

Dow Jones Sustainability Index 

Halliburton compared to overall industry sector 

Maximum possible score = 100 

36 

63 

41 43 

2004 

Halliburton Score 

56 

Industry Sector Average Score 

Overall Sector Leader 

2005 

66 68 

46 

39 

2006 

58 

34 


65 

Corporate SuStainability report 2007 9

Economic Profile 

Worldwide activity increased in 2007, 

particularly in the Eastern Hemisphere, 

boosting Halliburton's oilfield services 

revenue to an all-time high of $15.3 

billion for the year. This was an 18 

percent increase over revenue posted in 

2006. Operating income for 2007 was 

$3.5 billion, an increase of 8 percent 

over operating income in 2006. 

Beginning in the third quarter of 2007, 

financial results were reported according 

to Halliburton’s new two-operatingsegments 

structure – the Completion 

and Production Division, and the 

Drilling and Evaluation Division. 

In 2007, our Completion and Production 

Division, which includes the Cementing, 

Completion Tools and Production 

Enhancement product service lines, 

recorded revenue of $8.4 billion and 

operating income of $2.2 billion. Our 

Drilling and Evaluation Division, 

comprised of Baroid Fluid Services, 

Landmark, Security DBS Drill Bits, 

Sperry Drilling Services, and Wireline 

and Perforating Services, posted $6.9 

billion in revenues and $1.5 billion 

in operating income in 2007. 

Eastern Hemisphere revenue increased 

27 percent year-over-year and operating 

income increased 26 percent yearover-year. 

This continued growth 

in the Eastern Hemisphere, coupled 

with emerging opportunities in Latin 

America, is expected to provide the 

strength to offset the challenges 

facing the North American market. 

Geophysics and Geology Applications, Support Analyst in Luanda 

Many employees in angola who have benefited from Halliburton’s world-class training and development 

programs are eager to pass along their knowledge to young angolans who will one day be providing for their 

own families and contributing to the success of companies like ours. i’m one of those employees. 

every Monday, i go to the agostinho neto university in luanda, where i once studied, to mentor two students in the Department 

of Geophysics. While i was at the university, i became familiar with GeoGraphix®, an industry leading Windows®-based explorationto-production 

software solution. that experience added to the knowledge i’ve gained in my job over the past year as a support 

analyst for landmark. i now share my knowledge with these students and help them use GeoGraphix software or applications. 

i teach them the functionalities of the software and how they can maximize and take advantage of this tool while developing 

their thesis. in 2006, Halliburton made the first of several software donations worth $269,500 to the university. 

i know that my involvement with these young angolan students will some day pay off. and, whether or not they eventually 

go to work at Halliburton, their technical training will be used in our industry and, hopefully, in their native country to bolster 

the economy and to strengthen their own standard of living. So, it is a pleasure for me to mentor these students. 


Revenue 


$7,998 

2004 

$10,100 

2005 

Operating Income 


$1,179 

2004 

$2,164 

2005 

2007 Revenues by Region 


North America 

Latin America 

Europe/Africa/CIS 

Middle East/Asia 

$12,955 

2006 

$3,245 

2006 

2007 Operating Income by Region 


North America 

Latin America 

Europe/Africa/CIS 

Middle East/Asia 

$15,264 


$3,498 


$7,133 

$1,798 

$3,700 

$2,633 

* Excluding corporate 

and other 

$1,956 

$ 349 

$ 744 

$ 635 

Market Presence: It starts 

with forward thinking. 

Technology 

Halliburton is moving forward with a 

singular focus on upstream development, 

and the company’s Technology group 

has set forth a mission aligned with 

that focus. The group is developing 

initiatives that will enable Technology 

to balance its customer mix and 

geographic strength while expanding 

and diversifying its workforce. 

One such initiative is the launch of two 

global Research and Development (R&D) 

centers that will operate collaboratively 

with existing Technology Centers in 

Duncan, Oklahoma, and in Houston 

and Carrollton, Texas. In recent years, 

more than 90 percent of our R&D 

spend has been in North America. 

Now, as our customers’ operating 

bases are increasingly shifting to the 

Eastern Hemisphere, we are shifting 

the distribution of our R&D spending. 

The first of two new global technology 

centers opened in Pune, India, in 

November 2007. The 60,000-squarefoot 

facility will focus initially on the 

areas of production enhancement, 

completion tools, drilling fluids and 

cementing. A second technology center 

will open in Singapore in 2008. 

The globalization of our technology 

centers will serve the critical purpose 

of putting our technologies in closer 

communication with our client base. 

But, perhaps just as importantly, 

it will provide us with the benefit 

of a workforce with greater depth 

and diversity in talent, educational 

backgrounds, skill sets and solutions. 

Real-time technology will also play 

a significant role in shaping and 

diversifying this new, upstream-focused 

Halliburton. Already a leader in realtime 

operations, Halliburton is working 

to create additional opportunities for our 

customers to employ this technology to 

improve the speed and quality of their 

decisions. We expect the percentage 

of real-time jobs that Halliburton 

performs annually to double, increasing 

from approximately 5 percent to more 

than 10 percent. Real-time technology 

holds an additional benefit: It enables 

us to use fewer engineers and for 

these engineers to spend less time 

in the field, reducing safety risks 

and mitigating the environmental 

footprint of field operations. 

Real-time operations and a growing 

network of technology centers and 

people are just two examples of how 

Halliburton’s Technology group will help 

the company in executing its strategy. 

The technology road map that we have 

developed will help lead the organization 

to new and different opportunities, to a 

diverse array of talent and, ultimately, 

to its goal of becoming the preferred 

upstream service company for the 

development of oil and gas assets. 

Patents 

Halliburton currently holds 

approximately 13,000 U.S.-registered 

patents, 4,647 of which are active, 

and 296 of which were added to our 

portfolio in 2007. About 51 percent 

of our active patents are held in the 

U.S., with the remaining 49 percent 

registered in other countries. Our 2007 

total technology spending was $334 

million. The Patent Board ranked 

Halliburton No. 1 in its Energy and 

Environmental sector in November 2007. 

Mergers and Acquisitions 

Two of Halliburton’s strategic 

imperatives – to rebalance the business 

portfolio and to increase revenue over 

the next three years – help set the 

agenda for Halliburton’s Mergers and 

Acquisitions (M&A) group. Halliburton 

is intent on growing revenue and 

expanding its regional emphasis in the 


Eastern Hemisphere. The company’s 

organic growth will be supplemented 

by an effective M&A strategy. 

Because it is a matter of strategy and 

not just opportunism, the acquisition 

process is largely driven by operations. 

Product service lines have the primary 

responsibility for finding acquisition 

candidates, and each division has an 

executive in charge of identifying 

merger prospects. This approach 

has been successful: More than 100 

prospects were suggested in 2007. 

Execution and integration are key 

elements in the successful 

implementation of the M&A strategy. 

Scaling up the acquisitions program 

requires a systematic, reliable process 

for transacting deals efficiently and for 

integrating the target successfully. 

The “integration playbook,” a 

compilation of the activities required 

to enable a new business to function 

within the Halliburton framework, 

covers the operational aspects and 

support functions. It sets out the 

desired end state for each function 

and provides a road map, a task list 

and a timeline to guide managers 

through the process. The playbook is a 

knowledge-management tool that will 

continue to be expanded and refined. 

While most of the new-business 

integration takes place within the first 

six months, the success of an acquisition 

is measured and presented to the board 

after a year, and again after two years. 

The primary focus is on financial 

performance, but factors like employee 

retention and customer relationships 

are also indicators of success. 

The M&A group is working hard to 

establish a change in mindset – to infuse 

the company with an M&A culture. This 

means that people understand what is 

required to identify targets, execute deals 

efficiently and integrate acquisitions 

successfully. In sum, the aim is to 

establish a world-class M&A program. 

A summary of 2007 acquisitions includes: 

January 2007 – Halliburton’s Drilling 

and Evaluation Division acquired all 

intellectual property, current assets 

and existing business associated with 

Calgary, Canada-based Ultraline 

Services Corporation, a division 

of Savanna Energy Services Corp. 

Ultraline is a significant provider of 

wireline services in Canada and is 

known for its expertise in cased-hole 

wireline and perforating services. 

July 2007 – Halliburton’s Completion 

and Production Division acquired 

the entire share capital of PSL Energy 

Services Limited (PSLES). This 

acquisition supplements our existing 

product offerings throughout the Eastern 

Hemisphere. The recognized capabilities 

of PSLES in well-intervention services 

and pipeline and process services are an 

excellent complement to Halliburton’s 

production enhancement capabilities 

and continued global growth. Its 

operational bases are located in Algeria, 

Azerbaijan, the Asia-Pacific region, the 

Middle East, Norway and the U.K. 

Research and Development Spending 


$229 $218 

2004 

Total U.S. Patents Issued 

and rank among all U.S. companies 

209 

2004 

88 

2005 

Total Patents 

193 

2005 

87 

$254 

2006 

Halliburton Rank Among U.S. Companies 

* Not available at press time 

285 

2006 

$301 


74 

296 


NA* 



November 2007 – Halliburton’s Drilling 

and Evaluation Division acquired the 

entire share capital of OOO Burservice. 

Burservice is a leading provider of 

directional drilling services in Russia. 

Manufacturing 

Four new manufacturing facilities 

were added in 2007 to support the 

locations where our business is 

conducted. These new locations will 

support our efforts to deliver greater 

speed to market by reducing the 

need to transport materials over long 

distances. Additionally, the company 

will be able to meet requirements 

for localized sourcing by hiring 

employees from local communities. 

Monterrey, Mexico – This 

100,000-square-foot facility will 

support our Completion Tools and 

Cementing product service lines. 

Sao Jose dos Campos, Brazil – The facility 

will be focused primarily on Completion 

Tools. It will finalize packers, retrievable 

tools and subsurface flow-control tools. 

Johor, Malaysia – This 200,000-squarefoot 

facility supports the Completion 

Tools and Cementing product service 

lines. The facility manufactures float 

equipment, sliding side doors and 

permanent and retrievable packers. 

Singapore – This 200,000-square-foot 

operation will support the Sperry 

Drilling Services, Wireline and 

Perforating Services, and Security 

DBS Drill Bits product service lines. 

With these four new facilities, 

Halliburton has a total of 17 

manufacturing facilities globally. 

Initially, they will ship from $2.5 

billion to $3 billion worth of products 

each year, while projecting 15 percent 

year-over-year manufacturing growth. 

It is estimated that these four new 

facilities will represent 25 percent of 

global output by 2012. In addition, 

much of our future manufacturing 

capacity growth will occur at these 

new facilities, which together currently 

employ approximately 300 employees. 

Sustainable Sourcing: It starts 

with Supplier Diversity. 

A successful supplier diversity program 

requires creativity and commitment 

to ensure an inclusive business 

environment. Just as a diversity of 

employees enhances the company’s 

business culture, supplier diversity 

improves the supply chain, allows more 

effective management of the company’s 

business and expands the company’s 

contribution to communities. Our 

vision is to become the global leader 

in supplier diversity and in national 

supply development in countries with 

open markets around the world. 

Halliburton is committed to: 

• Maximizing opportunities 

for diverse businesses 

• Fostering a culture that promotes 

the economic and sustainable 

development of diverse business 

enterprises and the global 

communities in which we operate 


Minority, Women and Small-Business (MW/SB) 

Expenditures 

$631 

15.7% 

2004 

Suppliers 

8645 

$793 

MW/SB spend in millions of U.S. dollars 

MW/SB percentage of total global spend 

7426 

16.3% 

2005 

$1,114 

17.3% 

$1,221 

7364 

2006 

6965 

15.2% 


• Providing mentoring for growing 

suppliers and sharing with them 

insights about the business 

• Building partnerships with suppliers 

to deliver added value and exceptional 

service to our customers, as well as to 

improve our business performance 

and that of our suppliers. 

Supplier diversity, with its ability to 

provide a competitive advantage in 

the marketplace, is an integral part 

of Halliburton’s long-term business 

strategy and key to our sustainable 

sourcing focus. As we continue to work 

on developing a world-class model, we 

are changing our company’s culture. 

We’re involving more company leaders. 

We’re incorporating supplier diversity 

into business units, support functions 

and global markets. We are building 

successful business relationships in 

which we are able to partner with our 

customers to develop diverse suppliers. 

makes our company more competitive 

and strengthens our relationships with 

customers, as well as with suppliers. 

In 2007, the successful adoption of our 

strategy to build the capacity of our 

diverse suppliers resulted in increased 

expenditures with minority, women, 

small and national/local content 

suppliers to over $1.2 billion, which 

represents a 10 percent increase over 

2006. However, as an outcome of 

strategic sourcing efforts to reduce our 

overall supply base, the total number 

of diverse suppliers slightly decreased 

from 16.5 percent to 16 percent of our 

total supply chain. In 2008, our key 

metrics for this program will include: 

• Percent of annual increase in 

diverse supplier spend 

• Number and percent increase 

of first-tier suppliers reporting 

second-tier spend 

15.7% 16.3% 16.5% 

2004 

2005 

2006 

Total number of MW/SB suppliers 

Percentage of total suppliers 

16.0% 


We believe that there is a strong business 

case for supplier diversity. For example, 

several of our strategic customers 

make supplier diversity a contractual 

requirement. By making it a consistent 

priority on every Halliburton project, we 

partner with our customers to meet their 

goals and our own. Meeting or exceeding 

our customers’ expectations ultimately 

• Number and percent increase of 

new and existing diverse suppliers 

• Quarterly business reviews by supplierdiversity 

support organizations 

• Metric inclusion in supplier 

scorecards, bid evaluations and 

employee People, Performance, 

Results (PPR) evaluations. 


Overall Score Economic Dimension 


44 

52 

68 

75 

64 

86 

53 

55 

65 

75 76 

56 

2004 

2005 

2006 






Now in its fifth decade, Halliburton’s 

relationship with Angola continues to 

grow. The area’s promise is increasingly 

apparent, and our presence there 

benefits our company as well as 

Angola’s people and economy. 

One reason why the relationship 

has mutually flourished is because 

Halliburton is a well-organized, 

transparent and profitable business 

that is passing along know-how to 

our skilled and valued Angolan 

employees. Our greatest contributions 

to Angola’s well-being, however, take 

place through our insistent efforts 

to utilize and develop local talent. 

Local Hiring 

Of Halliburton Angola’s approximately 

1,300 in-country employees, 890 – or 

67 percent – are Angolan nationals. 

Those figures constitute a 21 percent 

increase over 738 in 2006, and, 

compared to other organizations 

active in Angola, give Halliburton 

a ranking in the upper quartile. 

Our Angolan employees occupy 

positions at all levels of the Angolan 

organization, including 111 that are 

professional staff, supervisors and 

coordinators; product line managers; 

departmental managers; country product 

service line managers; and operations 

managers. We consider this to be one 

of the company’s major achievements 

in Angola, and it is a reflection of the 

company’s focused effort throughout 

2007 to expand our localization there. 

Local Talent Development 

All Angolan engineers, technicians 

and administrators receive world-class 

training that conforms to international 

standards. Halliburton Angola spends 

an estimated $1 million annually 

training Angolan employees, both 

in Angola and abroad. In 2007, the 

company sent 75 employees outside 

Angola for training at all levels. 

The long-term impact of providing 

world-class technical and business 

training to local employees should 

Angola: 

Country Profile 

not be underestimated. Some of these 

employees will leave Halliburton to 

start their own businesses. Most will 

likely invest in property and other 

commercial interests in Angola. The 

benefits to Angola are clear, and 

the benefit to Halliburton is seen in 

deepened and fortified relationships 

with Angola, its communities, its 

institutions and its government. 

All Halliburton employees also receive 

high-quality training, appropriate to 

their roles, in health, safety, environment 

and service quality. The company 

and its employees are the most direct 

beneficiaries of this training, but its 

benefits undoubtedly extend to the 

communities in which our employees 

live, potentially affecting thousands 

of people throughout the country.

Environment Profile 

Let Halliburton’s sustainability 

Web page tell the story (www. 

halliburton.com/sustainability). 

Halliburton will be viewed as a good 

corporation and respected member of 

every community where we operate. 

We will preserve the environment and 

demonstrate that our presence provides 

sustainable social and economic benefits. 

We will facilitate and enable the 

integration of sustainability thinking 

into all business activities and the 

continuous improvement of stakeholder 

relationships, employees, governments, 

partners, suppliers, nongovernmental 

organizations and communities. 

Halliburton’s Sustainable Future: We will 

implement our sustainability strategy 

using these three key elements – 

sustainable technologies, sustainable 

relationships and sustainable sourcing. 

The company’s environmental policy 

is to prevent environmental pollution 

in all of its business activities and 

operations. The management of the 

company is responsible for diligently 

carrying out this policy and for 

ensuring compliance with all applicable 

laws and industry standards. 

Our environmental policy is dynamic 

and responsive to emerging issues and 

concerns. We continuously evaluate the 

environmental aspects of our products 

and services to ensure that they have the 

least environmental impact; are safe in 

their intended use; consume energy and 

natural resources efficiently; and can be 

recycled, reused or disposed of safely. 

The company communicates this policy 

to employees, clients, contractors, 

suppliers, partners and customers, 

and works with the communities in 

which it operates to achieve the highest 

environmental goals to the benefit of 

both our neighbors and our company. 

The policy is implemented by the 

company under the oversight of the 

board of directors’ Health, Safety and 

Environment (HSE) committee and of 

the chief HSE officer, who is designated 

by the CEO. The chief HSE officer makes 

recommendations to the board’s HSE 

committee and reports to the board’s 

HSE committee twice per year to review 

the company’s compliance with policies 

and procedures, HSE performance 

and HSE audit program activities. 

Analyst, Global Operations Accounting in Houston 

it started with a contest at work and ended with one person saving 11,000 gallons of water a month and almost $1,000 per year. 

that’s a lot of money and a lot of water. 

last year, the Houston-area performance improvement initiative (pii) environmental team sponsored a water conservation competition during 

the city’s hottest months (May through august) to encourage employees to think about ways to save on water usage. 

in the 2007 pii White paper, water conservation was noted as a core component of environmental stewardship in the oil and gas industry. 

to address this, pii is focusing on lowering resource consumption, and the water conservation contest was an effort to help push this initiative 

in the Company's Houston facilities. 

“Since Halliburton encourages us to conserve water at work, i figured i could bring conservation home. i discovered that a few little changes could 

make a huge difference. i live in an older house, and the fixtures were older, too. i repaired the leaky, running toilets, replaced the shower heads 

with low-flow models, installed a more efficient pump in my swimming pool, ran full loads of laundry and began hand-washing my dishes.” 

these simple changes are saving this employee money on her monthly utility bills, and they’re helping her conserve 11,000 gallons of water a 

year! that’s enough water to provide one person with a shower a day for more than 2.5 years. and, it’s enough to fill 176,000 drinking glasses. 

“you can conserve water if you’re conscious of it. it doesn’t cost much (or anything) to change, and one little change can make a huge difference!” 


Commitment to Sustainability 

Sustainable Technologies 

Our commitment to being part of 

the solution to global resource challenges 

through technology development 

CULTURE 

ENVIRONMENTAL 

PEOPLE 

PROFIT 

SOCIAL 

ECONOMIC 

Sustainable Sourcing 

Engagement with those groups 

who can influence our 

long-term success 

Building a global workforce 

and maximizing local spend 

Sustainable Relationships 

Board Health, Safety and 

Environment Committee 

Purpose 

The purpose of the Halliburton 

board’s HSE committee is to assist the 

board in fulfilling its responsibility 

to provide global oversight and 

support of the company’s health, 

safety and environmental policies, 

programs and initiatives. 

Responsibilities 

• Reviewing the status of the company’s 

HSE performance, including processes 

to ensure compliance with internal 

policies and goals and applicable 

external laws and regulations 

• Reviewing and providing input to 

the company on the management of 

current and emerging HSE issues 

• Reviewing semi-annual presentations 

from, and providing oversight to, the 

company’s Sustainable Development 

(SD) and HSE executive committee 

• Reporting periodically to the 

board of directors on HSE 

matters affecting the company 

• Approving the annual Halliburton 

“Corporate Sustainability Report” 

Organizational Responsibility 

The most senior position with 

operational responsibility for 

environmental performance is the Chief 

HSE Officer, who works closely with the 

board’s HSE committee to review and 

update the company’s policies, as well as 

to monitor company-wide compliance. 

However, the responsibility for 

environmental performance is shared 

by every Halliburton employee, and 

that responsibility is made clear at the 

time of hire and reinforced throughout 

their careers. Each employee signs an 

agreement to uphold the company’s 

Code of Business Conduct (COBC), 

which includes a section specific to 

HSE. Required training is provided in 

the company’s I Learn curriculum (the 

online training resource accessible to 

all employees). Along with instructorled 

training, approximately 50 I 

Learn courses are offered under the 

general heading of HSE, and dozens of 

additional, more specialized classes and 

learning modules are also available. 

SD and HSE Executive 

Committee 

The responsibility for promoting 

Sustainable Development and HSE 

as core company values, and for 

fostering a culture that embraces them, 

rests with the SD and HSE executive 

committee. The committee takes the 

lead in developing, approving and 

implementing company policies and 

standards as they relate to SD/HSE 

issues, with attention to the global 

adoption of appropriate practices. 

To accomplish its chartered 

objectives, the committee: 

• Meets at least once per quarter 

• Promotes commitment to 

SD and HSE excellence at all 

levels of the organization 

• Establishes company SD and 

HSE policies and practices, 

approves their execution and 

monitors their implementation 

• Serves as liaison to the board’s HSE 

committee, providing pertinent 

information and developing 

specific plans to follow up on advice 

from the board committee 


• Oversees participation of executive 

management in the investigation and 

review of serious HSE incidents 

• Reviews incidents with legal counsel, 

seeks guidance on legal exposures and 

ramifications and the best ways to 

handle them and prepares for litigation 

• Reviews corrective/preventive 

measures recommended by operations; 

and plans follow-up to ensure 

implementation of such measures. 

The committee comprises the CEO (who 

serves as chairman of the committee) the 

executive vice president of Strategy and 

Corporate Development, who also serves 

as the Chief HSE Officer; the executive 

vice president of Administration and 

chief Human Resources officer; the 

presidents of the Eastern and Western 

hemispheres; the senior vice president of 

the Law Department; and the director 

of HSE and Operational Excellence. 

Any combination of five of the members 

listed above constitutes a quorum 

able to discharge the responsibilities 

of the committee. Permanent invitees 

include the global environmental 

manager, who coordinates the activities 

of the committee, and the head of the 

environmental legal practice group, who 

serves as legal counsel to the committee. 

local levels determine action plans, 

responsibilities, milestones and 

timelines to achieve these goals. Every 

month, meetings are held locally to 

discuss progress, and the executive 

teams meet quarterly with countries/ 

regions to review progress. At the end 

of the year, the executive teams select 

the countries/regions that have shown 

superior commitment to all three 

areas of PII and honor them with the 

Chief Executive Officer’s Award. 

“One Is Too Many” 

Campaign 

In 2007, Halliburton created a 

campaign to support a focused effort on 

achieving a zero rate for HSE incidents 

– zero fatalities, zero injuries, zero 

environmental incidents, zero health 

hazards, zero regulatory citations. 

The campaign designed to communicate 

this stringent standard is titled, “One 

is too many,” and it features posters 

and other materials that list examples 

of the “one” that will not be tolerated: 

one unbuckled seat belt, one flicked 

cigarette, one frayed cable, one material 

spill, one outdated fire extinguisher, 

one speeding incident. The campaign 

has been rolled out to facilities and is 

expected to be fully deployed in 2008. 

Improved Reporting on 

Environmental Metrics 

Every year, Halliburton works to 

make improvements in tracking and 

reporting our environmental data. 

In 2007, the Environmental PII team 

provided the framework for progress 

and served as a major driver behind 

improvements in gathering data. The 

plan required new efforts to capture 

information about fuels, water usage 

and waste, and sustained efforts on 

recording utility usage for our facilities. 

In this year’s report, for the first time, 

we are providing new metrics on 

utility usage data. This data represents 

information on 100 percent of our 

U.S. and Canada facilities and about 

50 percent of our other non-U.S. 

facilities. We are continuing to focus 

on our data capture for international 

locations and are committed to 

improving the percentage reporting 

to all of our facilities worldwide. 

As a result of this stronger focus, new 

programs and better reporting on 

environmental issues, our score in 

the Environment category of the Dow 

Jones Sustainability Index (DJSI) for 

2007 increased to 57, 19 points higher 

than our 2006 score. (The industry 

sector average was 29 and the sector 

Performance Improvement 

Initiative 


Overall Score Environmental Dimension 


A decade ago, Halliburton launched 

a program called the Performance 

Improvement Initiative (PII). PII 

focuses on three areas that are 

critical to the company’s success and 

sustainability: Health and Safety, 

Service Quality and Environment. 

31 33 

2004 

66 66 68 

52 

39 38 37 

2005 

2006 

57 

29 


70 

At the beginning of each year, executive 

teams representing these three areas 

set objectives and formulate strategies. 

Mirror teams at the regional and 





United Kingdom: Country Profile 

In a company where environmental 

awareness is so thoroughly integrated 

into the culture – and Halliburton is such 

a company – it is difficult to spotlight 

any one country as an exemplar. This 

disclaimer notwithstanding, the U.K. 

stands out as an exceptionally passionate 

proponent and practitioner of concern 

and action for the environment. 

Halliburton’s U.K. team, working 

through a dynamic Performance 

Improvement Initiative (PII) 

Environment group, has continued 

its long-established trend in 

reducing the company’s “footprint” 

in a wide range of categories. 

For the fourth successive year, the 

quantity of waste sent to landfill has 

been reduced, and general waste 

recycling improved over 2006. 

The team’s 2006 goal of rolling out 

centralized waste stations at all 

facilities has been accomplished. 

The U.K. management team has 

demonstrated its commitment to the 

environmental PII group by fully 

supporting this project and helping 

the PII team overcome challenges. 

Recycling has been expanded to 

include plastic drink bottles, and 

now under study is the use of a 

machine to modify cardboard boxes 

for reuse as packing material. 

A clear indication of the U.K. team’s 

commitment is the feedback received 

after an external assessment was 

performed in January 2008. The audit 

produced uniformly positive feedback 

for the commitment of the PII team, 

support from all employees, and 

praise for the range and quality of the 

team’s environmental initiatives. 

One initiative in particular serves 

to illustrate the passion with which 

the Halliburton U.K. employees 

approach environmental efforts: 

At the end of July 2007, all Halliburton 

U.K. employees were invited to 

submit suggestions that could have a 

positive environmental impact. More 

than 80 entries were received from 

throughout Halliburton U.K. (and even 

a few from European colleagues). 

The large number and wide variety of 

the entries received made the judges’ job 

very difficult. The judging criteria were: 

• Environmental impact 

• Benefit to Halliburton 

• Cost benefit 

• Creativity and innovation 

• Ease of implementation. 

The judges especially focused on ideas 

that involved day-to-day behaviors, 

such as using ceramic mugs for drinks 

rather than plastic disposable cups 

or including a standard notation in 

e-mail messages requesting recipients 

not to print out electronic messages. 

The two winners were chosen for the 

uniqueness of their ideas, which were 

markedly different from each other 

but both very sound contributions. 

One suggestion was to assess air miles 

traveled by each individual and the 

consequent contribution to carbon 

footprint. Each product service line 

(PSL) would then be challenged to 

reduce air travel, while the management 

team would promote alternatives 

such as videoconferencing. If a group 

did not meet its travel-reduction 

target, it could offset its footprint by 

planting trees or implementing other 

environmentally friendly practices. 

The other idea that captured the judges’ 

imagination was to make all postwell 

reports electronic. Calculations 

suggested that the cost of each 

printed post-well report was about 30 

pounds (about US$59). If this could 

be converted to a paperless exercise, 

the savings to Halliburton could 

be as much as 3,600 pounds (about 

US$7,072) per PSL per year, with the 

environmental bonus of not using paper 

for printing, photocopying or binding. 

The judges were very impressed with 

both winning entries and nominated an 

additional 10 suggestions as runners-up. 

This kind of enthusiastic and inventive 

effort does not happen by accident. 

Halliburton is proud of its U.K. 

employees and looks forward to all 

that they will accomplish on behalf 

of the environment in 2008. 


est score was 70.) We scored above the 

average for the oilfield services sector 

in three of the four environmental 

categories – Environmental Reporting, 

Environmental Policy/Management 

Systems and Releases to the Environment 

– and below the sector average in the 

Environmental Performance category. 

Emissions, Effluents 

and Waste 

For the first time, all facilities have been 

asked to track and measure hazardous 

and nonhazardous wastes, potable and 

nonpotable water usage, and vehicle 

fuel usage. Creating and implementing 

processes for capturing this information 

at hundreds of facilities across the globe 

have been challenging. While we have 

made good progress, we are not in a 

position to make a full report for 2007. 

We estimate that 50 percent of our 

facilities have captured this information. 

We will continue to pursue the full 

capture of these data, and we anticipate 

being able to include complete and 

specific numbers in our 2008 report. 

Climate Change 

Our carbon dioxide (CO 2 ) equivalent 

emissions [including methane but 

excluding nitrogen oxides (NOx)] are 

associated with our facilities, on-road 

vehicles and off-road service equipment. 

In 2007, that total came to 3.27 million 

metric tons, a 4 percent increase from 

2006. Of that total, approximately 70 

percent was generated by our core 

pumping services in our Completion 

and Production Division. The company’s 

biggest emitter of nitrogen oxides is 

our “mobile” field equipment, both 

on-road and off-road engines. 

In last year’s report, we expected to have 

a public position on climate change 

in 2007. This did not take place, and 

we have not formally adopted a public 

position on this issue. However, we are 

making progress internally in several 

areas. We are continuing to collect 

data on greenhouse gas emissions 

from all locations; we are evaluating 

our products and services related to 

carbon capture and sequestration; 

and we are participating as a founding 

member of the North American Carbon 

Capture and Storage Association. 

Currently in progress are Research and 

Development projects concerning: 

• A frac factory that is more fuel-efficient 

on location and uses alternative fuels 

• Low-horsepower hydraulic fracturing 

• Advanced power systems 

• Laser technology for cutting 

both rock and metal. 

The effective capture and storage of CO 2 

involves many of Halliburton’s core 

competencies: subsurface assessment, 

drilling, completion, stimulation, 

monitoring and remediation. We 

bring these technologies and 30 years 

of experience to the work we are 

doing with our customers in using 

CO 2 for enhanced oil recovery and 

on carbon sequestration projects. 

Sustainable Technology: 

It starts with diligence. 

Sustainable production and 

environmental stewardship are key 

considerations in every Halliburton 

undertaking. We continuously seek to 

prevent or mitigate the environmental 

impacts of our industry and our own 

work primarily by continuing to 

develop industry-leading technologies 

that both reflect and advance our 

standard of sustainability. 

Halliburton’s goal is to provide products 

and services that have the smallest 

environmental impact, are safe in 

Greenhouse Gases Normalized 

million metric tonnes of CO 2 equivalent/hours worked 

.0246 .0248 .0244 

2004 

Greenhouse Gases 

million metric tonnes of CO2 equivalent 

2.64 

2004 

2005 

2.90 

2005 

Water Usage (U.S. Only) 

total gallons in millions 

305.3 322.5 

Facility 

Industrial Waste (Globally) 

total U.S. tons 

547.1 

Hazardous 

Wellsite 

1,284.3 

Non-Hazardous 

Environmental Reserves 


$28 

2004 

$35 

2005 

2006 

3.15 

2006 

$39 

2006 

.0224 


3.27 


$72 



Utility Usage Globally 

Electricity 

total kilowatt hours in millions 

240.4 

U.S. 

Non-U.S. 

Facility Water 

total gallons in millions 

305.3 

U.S. 

Gas 

cubic feet in millions 

1,081 

U.S. 

63.6 

582.0 

Non-U.S. 

314 

Non-U.S. 

their intended use, consume energy 

and natural resources efficiently and 

can be recycled, reused or disposed 

of safely. We seek to develop services 

and technologies for maximizing the 

recovery of oil and gas in existing 

reservoirs, and for pursuing clean and 

renewable energy sources for the future. 

In 2007, Halliburton spent approximately 

$350 million on technology R&D. 

“Green” Chemicals 

Halliburton’s Environmental Technical 

Excellence team, established in 1997, 

continues to develop new chemicals, 

chemical blends and other products that 

meet specific government regulations, 

and to acquire the capabilities necessary 

to perform all required testing and 

evaluation procedures in countries 

where we do business. Halliburton 

has the capability to perform inhouse 

environmental testing for 

biodegradation, bioaccumulation 

and aquatic toxicity at our Houston 

R&D center, which is certified to 

ISO 9001:2000 and current National 

Environmental Laboratory Accreditation 

Conference (NELAC) standards, and 

is in compliance with the principles 

of Good Laboratory Practice (GLP). 

We have developed approximately 

70 chemicals that meet stringent 

Norwegian requirements for toxicity, 

biodegradability and bioaccumulation. 

These products are approved for use 

in the environmentally sensitive and 

highly regulated North Sea and they 

can be used in other parts of the world. 

The following are technology 

highlights for 2007: 

New Surfactants Testing Procedure 

In 2006, the Centre for Environment, 

Fisheries and Aquaculture Science 

(CEFAS), a North Sea regulatory body, 

imposed restrictions on all surfactants 

used in the U.K. sector of the North 

Sea and required the substitution of 

all surfactants within three years. 

Because surfactants are used in 

hydraulic fracturing and cementing, 

these restrictions severely hampered 

the ability of service companies to 

treat wells using these products. 

CEFAS imposed restrictions primarily 

due to the lack of procedures for 

assessing the potential bioaccumulation 

(PBA) of the surfactants. The only 

recognized method for measuring 

the PBA was to conduct actual 

bioconcentration-factor (BCF) 

tests that were both expensive 

and difficult, and required that 

animals be killed for testing. 

In response, Halliburton developed an 

innovative and economical procedure 

for estimating a surfactant’s PBA; this 

procedure was approved by CEFAS 

in 2007. The procedure measures 

PBA directly and does not require 

the killing of animals. The procedure 

is expected to reduce human safety 

risk, help promote the sustainability 

of the fishing and energy industries 

and reduce test-cycle time. 

In order to make the testing procedure 

widely available so that the entire 

well-servicing industry may continue 

operating in the strictly regulated 

North Sea, Halliburton withdrew its 

patent application. Since the inception 

and approval of the testing procedure, 

Halliburton has introduced more 

than 25 new chemistries specifically 

designed to meet or exceed North Sea 

environmental regulatory requirements. 

The EZ-FLO TM process 

The EZ-FLO TM cement process, 

developed by Halliburton, makes 

it easier to transport and refluidize 

bulk cement and other powders. In a 

study of cement use for a deepwater 

well in the Gulf of Mexico, using the 

EZ-FLO cement process required 

one less boat run per cement job 

and reduced waste cement by more 

than 6 percent. Since its commercial 

introduction in 1998, the use of the 

EZ-FLO cement process has reduced 

cement waste by an estimated 42,000 

tons (38,102 metric tons). In addition, 

eliminating boat runs contributes to 

lower greenhouse gas emissions. 


New Defoamer for Norway Applications 

Norway requires all chemicals in 

the Barents Sea to meet its highest 

classification of regulation, "Poses 

Little or No Risk" (PLONOR). 

Halliburton developed a PLONOR 

defoamer for cementing operations, 

deemed best on the market by Norway 

operators. Halliburton commercialized 

the defoamer in summer 2007 

and secured the U.S. patent. 

Cement Retarders Approved 

for North Sea Use 

Halliburton developed new cement 

retarders that meet the environmental 

requirements for use in the North 

Sea while lowering costs and 

improving performance. Following 

commercialization at the end of 2006, 

more than 300 jobs were performed 

in 2007 using these retarders. 

“Green” Cementing Products 

The Cementing product service line 

set a goal to generate a large portion 

of revenue from new products. For 

Cementing, “green” products account 

for 60 percent of new-product revenue. 

(Cementing defines “green” as “meeting 

or exceeding the stringent regulations of 

CEFAS.”) Top green revenue products in 

Cementing include Halad®-300, Halad®- 

400, CFR-8 TM , Halad®-766, MIRCOMAX TM 

FF and ZoneSeal® 4000 applications. 

Service Delivery Optimization 

in Production Enhancement 

Service delivery optimization is an 

integrated, system view of the entire 

service and product-delivery process. 

The goals are to reduce footprint, cost 

and speed of delivery and to increase 

efficiencies by optimizing logistics, 

mobilization, usage and post-job impact. 

Service delivery optimization requires a 

close partnership with customers, who 

must agree to drill wells and develop 

fields to accommodate this practice. 

On many projects, early in the fielddevelopment 

planning process, we work 

with customers to construct plans that 

are consistent with efficient, economic 

and low-impact efforts that will occur 

later in the life of the field. FracFactory® 

service concepts are being considered 

in this way. We can plan for and 

efficiently manage logistics such as water 

supply and production, handling and 

metering of bulk materials, hydraulic 

horsepower (HHP) optimization and 

continuous pumping operations, all 

tailored to meeting our customers’ 

needs responsibly and economically. 

Service delivery optimization can 

involve performing most operations 

from a central location instead of 

moving from well to well. This makes 

it possible to reduce truck trips up to 

30 percent, thereby reducing fuel and 

water consumption, surface damage 

and equipment needs. Additionally, 

operations can be coordinated to 

avoid disrupting the movements 

of migrating wildlife, a significant 

advantage in wilderness locations. 

Digital Asset TM and DecisionSpace® 

Halliburton’s Digital Asset TM real-time, 

collaborative environment is used to 

model, measure and optimize the asset. 

It is the game-changing innovation 

that is critical to maximizing the use of 

resources to meet business objectives. 

The Digital Asset environment provides 

virtually unlimited access to any 

data, from any application, to any 

asset, from anywhere, at any time. 

Landmark’s DecisionSpace® 

environment provides multidisciplinary 

integration, optimization and 

visualization – a benefit that customers 

will find only with Halliburton. 

The Digital Asset and DecisionSpace 

applications help operators meet the 

challenges associated with developing 

dwindling resources, such as drilling 

complex deepwater wells safely and 

cost-effectively, placing wells precisely 

to minimize their footprint, finding 

and producing unconventional 

hydrocarbons to meet worldwide 

demand and drilling in remote and 

environmentally sensitive locations. 

Completion Tools, Long-Term 

Product Development Project 

Halliburton is working with several 

major operators in Prudhoe Bay, 

Alaska, U.S., to develop a subsurface 

processing and reinjection compressor 

(SPARC). This downhole, selfpowered 

device allows operators to 

re-inject one-third to one-half of 

the gas an individual well produces. 

SPARC minimizes surface processing 

needs and the surface footprint 

required for processing equipment. 

Environmental benefits include total 

elimination of the air emissions 

(nitrogen oxides, carbon monoxide, 

CO 2 and sulfur dioxide) as a result of 

the reduction in surface processing. 

This is a long-term development 

project that is not yet commercial. 

Clean Coal 

Coalbed methane (CBM) is methane 

contained in coal seams. Coal mine 

methane (CMM) is extracted via 

hydraulic fracturing allowing the 

gas to be in advance of coal-mining 

operations, captured and used as a 

resource rather than being emitted into 

the atmosphere as a waste product. 

Halliburton technologies and products 

are helping to enhance and enable 


development of CBM and CMM, while 

eliminating emissions such as sulfur 

oxides, nitrogen oxides, mercury, 

and other air and water pollutants. 

In 2007, Halliburton introduced a line of 

hydraulic fracturing fluids especially for 

CBM and CMM in the U.S., Canada and 

Australia. These products were designed 

to enhance the performance of hydraulic 

fracturing. New fluids were developed 

in response to customer needs for a fluid 

that performs better and causes less 

formation damage in CBM and CMM 

fields. Before Halliburton introduced 

these products, there were no fit-forpurpose 

fluids for these conditions. 

The new Halliburton products having 

been successfully tested in 2007 in 

the San Juan Basin are now available 

for commercial use in other areas. 

Drilling Technologies 

Eighty percent of future gas in the 

Lower 48 states lies beneath protected 

lands. Halliburton’s Geo-Pilot® rotary 

steerable drilling system and the 

Landmark DecisionSpace suite of 

technologies are ideally suited for such 

environmentally sensitive areas. 

The Geo-Pilot system reduces 

environmental impact by enabling 

operators to drill multiple longdistance 

wells in all directions 

from a single drillpad. Landmark’s 

DecisionSpace visualization technologies 

illuminate the drilling environment 

so accurately that drilling work can 

often be performed more safely and 

efficiently away from the drillsite. 

Managing Produced Water 

The global energy industry relies 

on significant volumes of water to 

accomplish drilling, cementing, 

fracturing and other operations that 

are critical to producing hydrocarbons. 

In the past, the products for these 

operations were based on clean, potable 

water. With the expansion of global 

population, increasing development of 

oilfields in remote areas, and, in some 

cases, drought, Halliburton recognized 

the need to apply our chemistry 

expertise to developing new oilfield 

products that use alternate sources of 

water such as produced salt water. 

Moving to such a solution addresses 

the potable water challenge while 

minimizing the costs of another oilfield 

activity. By utilizing produced salt 

water, Halliburton provides a practical 

application for produced water and 

eliminates the operator’s costs for its 

disposal. Halliburton’s use of produced 

water for well service activities also 

minimizes the use of potable water 

for this industrial application. 

The alternative water-use project 

involves developing variations of 

standard Halliburton products to 

achieve more salt tolerance. The 

project includes developing equipment 

that mechanically and chemically 

modifies typical produced saltwater 

to a standard, workable level. These 

projects are under way and some are 

in the testing and evaluation phase. 

In addition, Halliburton is 

commercializing it's CrystalSeal 

service to solve the problem of produced 

water in injection wells. CrystalSeal 

swellable polymer is pumped into an 

injection well to shut off the direct 

connection from the injection well to 

the producing well. In 2006 and 2007, 

we performed approximately 130 jobs 

with CrystalSeal in the Permian Basin. 

Health, Safety and 

Environment Audits 

Halliburton’s board of directors’ 

Health, Safety and Environment 

(HSE) committee was established 

in 1990. It comprises a minimum of 

three directors, all of whom must be 

independent. The HSE committee 

generally meets twice each year to 

provide oversight and support of HSE 

policies, programs and initiatives. 

Internal HSE audits are carried out under 

the direction of the HSE committee 

through a corporate HSE audit group 

within Halliburton’s Environmental Law 

Department. Separating the audit function 

from Halliburton operations supports an 

impartial audit process. The corporate 

audit results are presented twice each year 

to the HSE committee. HSE audits are 

scheduled annually based on a riskranking 

profile conducted on all company 

operations, with high-risk locations 

placed on a three-year audit cycle. In 

2007, the company performed 54 internal 

HSE audits, compared with 44 in 2006. 

Our HSE standards set forth the 

requirements for HSE audits. Biennial 

HSE site self-assessments utilizing 

the same audit protocols from the 

corporate audit group are performed 

at all operating facilities or job sites. 

Line management is responsible for 

implementation of this process. Both 

corporate audits and site self-assessments 

measure performance against regulatory 

requirements, company standards and 

client requirements. The corrective 

action process includes review and 

follow-up by executive and operations 

management to ensure that corrective 

actions are completed quickly and 

to eliminate any barriers to closing 

audits in an expeditious manner. 

Fines/Penalties/Remediations 

Halliburton is subject to numerous 

environmental, legal and regulatory 

requirements related to our operations 

worldwide. As stated in our COBC, 

our policy is to comply with all 

environmental, legal and regulatory 

requirements of states and countries 

where we do business. However, 

in 2007, we paid fines or penalties 

associated with regulatory issues of 

$20,330 for non-compliance issues. 


As part of our compliance program 

and to avoid future liabilities, we 

assess and remediate contaminated 

properties as necessary; as of this 

report, approximately 100 sites 

are being remediated. We have 

established a $72 million reserve for 

site remediations. These reserve funds 

have increased significantly in 2007 

as a result of various site-specific 

issues that were in arbitration and 

that were ruled on during 2007. 

HSE and Service Quality 

Management Systems 

ISO and OHSAS Compliance 

We continue to utilize International 

Standards Organization (ISO)-compliant 

HSE management systems across our 

operations. We are not planning to 

certify to ISO 14000 or Occupation 

Health and Safety Assessment Series 

(OHSAS) 18000 globally. However, 

based on local business needs, we 

have maintained our number of ISOcertified 

locations at 35, and OHSAS 

certifications have increased from 10 to 

20 in 2007. Six of Halliburton’s seven 

U.S.-based manufacturing facilities are 

participants in the U.S. Department 

of Labor Occupational Health and 

Safety Administration’s (OSHAs) 

Voluntary Protection Program. These 

facilities, located in Duncan, Oklahoma; 

Broussard, Louisiana; Carrollton, 

Conroe, Houston and Alvarado, Texas, 

are recognized by OSHA as “Star 

Program” sites for their exemplary, 

comprehensive safety and health 

management systems, and for achieving 

injury and illness rates below the 

national average for our industry group. 

Index (DRSI), a system for measuring 

our overall job performances. It is based 

on a composite of five key indicators: 

• Zero HSE incidents 

• Zero cost of poor quality 

• Zero nonproductive time 

• Job purpose achieved 

• Customer satisfied. 

The DRSI helps us monitor and improve 

our quality and change behaviors 

by discovering opportunities for 

improvement. The DRSI remains 

a key measure of Halliburton’s 

performance and the level of excellence 

in our service delivery. Overall service 

quality objectives in 2007 were: to 

measure and improve service quality 

performance; to achieve service quality 

and HSE results using the established 

Halliburton Management System; and 

to communicate our performance to our 

customers, employees and stakeholders. 

The 2007 DRSI target was 94 percent. 

Halliburton achieved a 2007 DRSI 

of 96.2 percent, compared with 92.9 

percent in 2006. Our customers have 

increasingly come to accept the DRSI as 

the relevant and critical measure of our 

job performance at the wellsite. Service 

quality remains a strong core value and 

helps define Halliburton as a customerfocused 

organization (see chart on 

page 9). 

Environmental Spills 

in cubic meters 

240 

165 220 192 

105 

57 

35 

2004 

Reported Environmental Incidents 

594 

2004 

HSE Notices of Violations/Citations 

excluding vehicle-related violations and citations 

43 

2004 

653 

2005 

61 

2005 

2005 

Hydrocarbon Liquids 

Non-Hydrocarbon Liquids 

HSE Fines/Penalties 

in thousands of U.S. dollars 

2006 

834 

2006 

64 

2006 

209 

600 

276 


745 


55 


Service Quality 

Though a perfect job may seem like 

an unattainable goal, Halliburton is 

working to make it a reality. In 2003, 

we developed the Done Right® Services 

24 

2004 

7 

2005 

2006* 

*2006 data includes $198,000 in fines for hazardous 

material packing violations from the U.S. Federal 

Aviation Administration. 

20 



Social Profile 

Senior Technical Services representative in Mumbai 

nobody imagined, back in 1997, when Halliburton launched its performance improvement initiative, that it would yield the kind of 

significant human results that it has. 

Ways in which pii teams around the world have embraced the spirit of the company’s commitment to improving its performance as a corporate 

global citizen are almost as varied as the countries in which we do business. 

one example that illustrates the wonderful results of this process is a project undertaken by our pii team in Mumbai, india. in 2006, the team created 

a special project as part of the program for Community Welfare, and it took pii to a whole new level. i am proud to say that i was, 

and still am, a part of that team. 

near the Halliburton offices in Mumbai, there is a residence called the Home for the aged. Started as a response to the desperate conditions 

in which many elderly indian men and women live, the Home for the aged is run by the little Sisters of the poor, a group of 20 nuns who 

care for the 150 elderly residents. they offer food, shelter, recreation and medical services, as well as spiritual companionship, although 

neither religion nor caste enters into the Homes acceptance process, which is based solely on need. the Home in Mumbai is part of the 

Society of the Home for the aged, an international charity that supports care for the aged poor in 32 countries on five continents. 

our pii team met with the Mother Superior, asking how Halliburton could help. it was agreed that Halliburton would provide some 30 liters (about 

32 quarts) of milk per day for the next six months. employees were encouraged to participate in the program through opportunities for donations 

and volunteering. a group of pii team members began making monthly visits to the Home, engaging with both the nuns and the residents. 

all this began over a year ago. the six months have come and gone. We’ve donated money to buy kitchen 

and medical equipment and our team is still providing milk and still visiting monthly. 

it’s a good feeling knowing that my fellow employees put their hearts and their hands where the company’s policy is – into our 

communities. there is no better mark of a good neighbor than a willingness to pitch in and extend a helping hand when it is 

needed. and it’s a clear expression of one of the most significant facets of our identity – a caring, dynamic global citizen. 


2007 Employees 

percentage of total workforce by region 

Europe/Eurasia 

Middle East 

Africa 

Asia Pacific 

Canada 

United States 

Latin America 

Europe/Eurasia 

Middle East 

Africa 

Asia Pacific 

Canada 

U.S. Northern 

U.S. Southern 

U.S. Gulf Coast 

Latin America 

Misc. Other 

2006 2007 

12.0% 13.0% 

2006 

93% 

58% 

75% 

88% 

99% 

99% 

95% 

6.6% 

8.4% 

8.5% 

3.8% 

13.1% 

9.1% 

5.3% 

12.7% 

20.5% 

7.1% 

8.9% 

8.3% 

2.9% 

12.8% 

10.0% 

4.9% 

13.7% 

18.3% 

Employees 

percentage of local nationals in regional workforce 


93% 

55% 

76% 

87% 

99% 

99% 

95% 

Sustainable Relationships: 

It starts with respect. 

Becoming the “Preferred Employer” 

In harmony with our corporate 

vision – to be the preferred provider 

of oilfield services – is our Human 

Resources vision: To be the preferred 

employer. This means attracting, hiring, 

developing, promoting, rewarding 

and retaining the right people at the 

right time and at the right place. 

Our efforts toward accomplishing this 

goal are founded on our commitments 

to embracing fair labor practices and 

maintaining decent work environments 

in all our locations and facilities. Our 

workforce reflects the diversity of 

the communities where we operate; 

approximately 92 percent of our total 

workforce is localized. We currently 

employ men and women of 121 

nationalities. We are uncompromising in 

our policy of offering equal employment 

opportunities to all qualified 

individuals, and we work to provide 

every employee worldwide with safe, 

healthy working conditions that meet or 

exceed every regulatory requirement. 

We provide our employees with extensive 

training and education opportunities, 

along with numerous tools and resources 

to help them multiply and expand their 

competencies and to develop their 

careers. Approximately 25 percent 

of employees were promoted in 2007 

(roughly the same as in 2006). We 

foster a performance management 

culture with our People, Performance, 

Results (PPR) process for setting 

goals, measuring performance and 

directing professional development. 

In 2007, Halliburton ranked No. 8 in the 

Houston Business Journal’s “Best Places 

to Work” list, among Houston companies 

with more than 500 employees, advancing 

from No. 12 in 2006. To determine 

the rankings, the Houston Business 

Journal anonymously surveyed random 

employees, asking for feedback in 10 

categories such as team effectiveness, 

alignment with goals, trust in senior 

leaders and work engagement. We were 

the only energy-related company in our 

catagory to earn a place on the list, out 

of a total of 180 companies nominated. 

Recruiting in a Competitive Environment 

As more and more employees retire from 

our industry, companies are competing 

to attract new recruits to the workforce, 

train them to replace the more 

experienced retirees and then retain 

them to provide the experience needed 

in the long term. In recruiting targeted 

talent, we emphasize Halliburton’s 

global diversity, our record of technical 

leadership and innovation, and the 

advantages of our state-of-the-art 

equipment and cutting-edge training. 

Halliburton has developed an integrated 

approach for drawing to our company 

the top-tier professionals we need now 

and into the future. We have a growing 

program for establishing relationships 

with educational institutions around 

the world. Many institutions receive 

donations of software and financial 

resources from Halliburton. Our top 

professionals teach in engineering- and 

business-related programs at dozens of 

universities and colleges, and we hold 

an extensive range of campus recruiting 

events. In 2007, our thriving internship 

program employed more than 200 

interns in operations and support groups 

in Canada, China and the U.S. Even at 

the high-school level, we are planning 

for the future of our company and our 

industry: Our employees lead specialized 

courses for math and science students 

in high schools around the world. 

We are aggressive in our efforts to 

recruit top candidates, from fresh 

college graduates to seasoned industry 

professionals. We have instituted 

new programs designed to accelerate 


professional development and broaden 

career planning, and we have made 

structural changes to help streamline 

our Human Resources organization 

for improved responsiveness and 

accessibility. Our long-term goal, 

of course, is to retain the powerful 

workforce that we build through these 

recruiting and development efforts. 

Some results of this approach: 

• More than 36,500 employees 

hired in the past three years 

• Rising revenue per employee 

• Ninety-two percent localized workforce 

• Decreasing voluntary turnover 

• Reduced engineer breakout time 

• Improved safety performance 

• Increased service quality 

• Highest employee engagement 

score on record 

• Average training hours per 

employee increased 20 percent 

in 2007 compared to 2006. 

Training and Education 

Halliburton offers our employees 

extensive opportunities for training and 

development. To meet the increasing 

need for technical training, we opened 

our 12th regional training center in 

Tyumen, Russia, in February 2007. 

This training center, our first in Russia, 

is operated in cooperation with the 

Tyumen State Oil and Gas University 

and will focus on developing the skills 

of our employees in the Europe Eurasia 

Region. The center is equipped with 

three classrooms, a laboratory and 

state-of-the-art video-conferencing 

equipment that gives students access to 

our technical experts around the globe. 

In addition to opening new technical 

training venues, Halliburton has initiated 

an accelerated competency development 

program for field operations employees. 

Our program allows employees to 

design their own plan for enhancing 

their competencies and for advancing 

(or redirecting) their careers. Through 

our employee survey, we confirmed that 

career development and progression aid 

retention. In response, we developed an 

online tool, “Moving Employees To The 

Right Opportunities” (METTRO) to help 

employees map out their career paths 

and implement professional development 

plans. In 2007, our METTRO Web 

site averaged 10,000 hits per month. 

Our online learning management 

system, I Learn, offers courses 

through both online curriculum and 

instructor-led training. Halliburton 

employees received over 3 million 

hours of training in 2007, an average 

of about 66 hours per employee. 

President’s Leadership Excellence Program 

A program specifically created to 

develop future leaders for our company, 

the President’s Leadership Excellence 

Program (PLEP) offers a small and elite 

group of hand-selected professionals 

the opportunity to work as teams 

to solve real-life, up-to-the-minute 

Employee Training 

in millions of hours 

1.75 

2004 

1.97 

2005 

2.32 

2006 

issues facing the company now. 

For 2007, the four teams addressed 

challenges relating to “people”: 

• Effective use of global 

universities for recruiting 

• Effectively integrating people into the 

organization following an acquisition 

• Managing the frontline field workforce 

• Managing the experienced 

field operations workforce. 

3.15 


Working in these teams, under the 

sponsorship of experienced, uppermanagement 

mentors, the participants 

study their assigned issues, formulate 

workable solutions and, on “graduation” 

day, present their plans to the CEO 

and other members of the executive 

management team. In December, the 


Total Recordable Incident Rates 

per 200,000 work hours 

1.10 1.10 

2004 

Lost Time Incident Rates 

per 200,000 work hours 

0.33 

2004 

0.35 

2005 

0.30 

2006 

International Association of Drilling 

Contractors Industry Average 

0.24 


Recordable Vehicle Incident Rates 

per million miles traveled 

0.77 

2004 

2005 

0.73 

2005 

1.04 

2006 

International Association of Drilling 

Contractors Industry Average 

0.70 0.70 

2006 


0.96 


2.13 


0.56 


CEO and members of the executive 

committee meet with a member of each 

team to go over the recommendations in 

further detail. The executive committee 

identifies the ideas it believes will 

bring the most value to the company, 

and action plans are developed for 

their implementation. Some of the 

most innovative and successful ideas 

have emerged from the PLEP, and it 

is a highly respected program that 

serves as a valuable training ground 

for the company’s future leaders. 

Performance and Career 

Development Reviews 

All regular, full-time, nonunion 

Halliburton employees are required 

to participate in the annual People, 

Performance, Results (PPR) process. 

Working with their supervisors or 

managers, employees complete the PPR 

process by assessing their competencies, 

setting goals for the next year and 

establishing measurable, meaningful 

ways to evaluate the employees’ progress 

toward those goals. The PPR process 

includes areas defined by the individual’s 

specific responsibilities, and it also 

has sections on Health, Safety and 

Environment (HSE) and ethics that are 

mandatory for all participants. The PPR 

process holds employees and supervisors 

accountable and provides a clear way 

to track progress toward objectives that 

are both of benefit to the employees and 

in support of the company’s strategies. 

The company has set a goal of having 

100 percent of our eligible employees 

complete an annual PPR; accordingly, 

managers are held accountable for 

completing reviews for all of their 

employees. In the first quarter of 

2007, approximately 91 percent of 

eligible participating employees 

received their annual PPR appraisals 

and career development reviews 

for performance year 2006. 

Occupational Health and Safety 

At Halliburton, we know that the 

well-being of our employees is 

critical to our success and long-term 

sustainability and we believe that 

improvement in our performance must 

be pursued relentlessly. The Performance 

Improvement Initiative (PII), our 

annual company-wide performance 

improvement process, supports 

and promotes that commitment. 

The executive leadership, together 

with the HSE and Service Quality 

teams, outline broad yearly strategic 

PII objectives and provide tools and 

guidance to assist local teams in 

meeting these objectives. With input 

from employees and support from local 

company leadership, each geographic 

region or country develops a plan to 

meet annual targets within the context 

of its own customs, culture and values. 

The PII focus areas for 2007 were 

leadership visibility and accountability, 

process management, targeted 

metrics and employee engagement in 

PII principles and objectives. Major 

health and safety objectives in 2007 

were to eliminate fatalities and to 

deliver continuous improvement 

toward an incident-free workplace. 

Unfortunately, we had four 

employee fatalities in 2007: one 

vehicle-related and the other three 

associated with work at wellsites. 

The 2007 Lost Time Incident Rate (LTIR) 

was reduced from 0.30 in 2006 to 0.24 

for 2007. The Total Recordable Incident 

Rate (TRIR) of 0.96 was down slightly 

from the 2006 rate of 1.04. This 2006 rate 

is slightly different from what was shown 

in last year’s corporate sustainability 

report due to reclassification of incidents 

from an internal record-keeping review. 


These reductions in incident rates 

occurred even as hours worked 

increased approximately 15 

percent in 2007 compared to 2006. 

Furthermore, both incident rates are 

significantly better than the average 

rates reported by the International 

Association of Drilling Contractors. 

Our employees drove more than 

281,700,000 miles in 2007, 

a 6 percent increase from 2006. Our 

2007 Vehicle Recordable Incidents 

Rate remained the same, compared 

to 2006, and, as mentioned above, 

we had one employee fatality related 

to a vehicle incident in 2007. 

Health Education 

Halliburton offers our employees and 

their families a variety of programs 

to help prevent and manage serious 

diseases. The Halliburton Management 

System outlines standards and 

performance criteria for protecting 

employees from diseases in their 

areas of operations by minimizing 

the risk of exposure to disease. Our 

disease-protection standard calls for 

identifying and evaluating diseases 

at a local level, communicating risks 

to employees, relating procedures to 

obtain medical assistance, following 

health authority recommendations 

and providing affected employees with 

a health advisory package. If local, 

country or contractual requirements 

exceed Halliburton’s standard, then 

those requirements are followed. 

Employee Assistance Program 

Life events, family issues and personal 

problems can affect the workplace, 

from interfering with the satisfaction 

of an individual worker to affecting 

the productivity of an entire team. 

Halliburton recognizes the positive 

role the company can play in helping 

employees handle difficult times. 

For any person who needs assistance 

and support in such circumstances, 

Halliburton provides the Employee 

Assistance Program (EAP). 

Based in Houston, the program is 

available 24/7 in the U.S. via a toll-free 

number, and also outside the U.S. where 

the toll-free number is accessible. An 

external provider fulfills EAP services 

in the U.K., Canada, Australia and 

Argentina. The company’s long-term 

goal is to provide local EAP services 

throughout our worldwide operations. 

Employees may voluntarily seek 

assistance from the EAP, or they may be 

referred by their supervisors. In the first 

six months of 2007, employee utilization 

of the EAP increased 15 percent 

compared to 2006. During the same 

period, supervisory referrals increased 

39 percent. However, the second half 

of 2007 showed a dramatic change 

that, annualized, indicates a 45 percent 

increase in employee utilization and a 91 

percent increase in supervisory referrals. 

In a survey, approximately 95 percent 

of supervisors who referred employees 

to the EAP indicated satisfaction with 

the EAP’s services and outcomes, and 

said they would make referrals again. 

Dispute Resolution Program 

The design and success of Halliburton’s 

Dispute Resolution Program 

(DRP) have achieved national and 

international acclaim. Following 

a careful assessment by the Texas 

Supreme Court, Halliburton’s DRP 

was found to provide “due process” 

and passed the “fairness test.” 

Since its introduction in 1998, nearly 

3,000 employees representing 32 

countries have brought matters to the 

DRP. Disputes resolved have involved 

employees from every level of the 

company and have concerned 

issues ranging from minor 

misunderstandings to alleged 

violations of legally protected rights. 

(continued on page 36) 

Dispute Resolution Timeline 

cases resolved 

less than 

5 days 

1 week 

or less 

On average, 68 percent of all cases are 

resolved in one week or less; 

83% are resolved in four weeks or less. 

2 weeks 

or less 

3 weeks 

or less 

4 weeks 

or less 

2 to 3 

months 

3 to 6 more than 

months 6 months 


elations touches every aspect of our 

business and has become a key criterion 

by which we measure our success. 

In 2007, much of our effort focused on 

educational and social issues, supporting 

public schools, social agencies and 

youth activities. Halliburton Brazil 

donated $20,000 in direct financial 

support for education programs in 

area schools, and we provided 25 

employees as volunteers for special 

events, totaling 130 volunteer hours. 

Education Programs 

Brazil: 

Country Profile 

Halliburton Brazil approaches 

community relations not as simple 

conformance to the expectations – legal, 

social and cultural – of the community, 

but as a pervasive strategy. Employees are 

encouraged to participate in volunteer 

activities as well as in fundraising efforts. 

Our programs have included initiatives 

relating to sustainable development and 

environmental management, safety, 

training, diversity and human rights. In 

short, our commitment to community 

Working with the Halliburton 

Education Assistance and Resource 

Team (HEART), the Halliburton Brazil 

team has contributed in a variety of 

ways to the Centro Federal de Educação 

Tecnológica (CEFET), the public 

technical school in Macaé, outside 

Rio de Janeiro, Brazil. Halliburton 

supports an education development 

program focused on raising the level of 

education and improving the skills of 

students from low-income families in 

order to increase their employability. 

Seven senior-level employees 

gave technical presentations for 

approximately 220 students at CEFET. 

We hosted 140 students, ages 16 

to 23, from four area schools in 

visits to our base in Macaé. 

We raised $8,000 to donate used and 

new equipment for laboratories: Ten 

computers (donated from Information 


Technology), a consistometer 

(from Cementing and Production 

Enhancement), an analogical 

oscilloscope, a data projector, a digital 

multimeter, a decibilimeter and a 

digital terrometer wire cutter. 

Halliburton also participated in a social 

responsibility program in partnership 

with Centro de Integração Empresa- 

Escola (CIEE), an organization focused 

on preparing students for the market. 

Halliburton funded two CIEE workshops 

on the environment and career 

management. These initiatives benefited 

more than 30 students, many of whom 

are already working in the industry. 

Our forward-looking support for 

educational opportunities has benefits 

for the students, their families, 

their communities and, ultimately, 

for Halliburton. By opening more 

educational possibilities for young 

people, we are preparing them to 

take a productive role in the future 

of their country, and it is a future 

in which Halliburton expects to 

play a strong and valuable part. 

Every year, Halliburton’s major bases 

in Brazil participate in the Internal 

Week of Accident Prevention (SIPAT). 

In 2007, employees added a new 

dimension to SIPAT by collecting 

2,577 kilograms (5,681 tons) of 

nonperishable food for donation to 

charity institutions. Employees at 

the Macaé base raised $2,440 for 

the purchase of a machine used in 

making personal hygiene products. 

The machine was given to the Asilo 

Santo Antonio, a home for the elderly. 

Halliburton has had a positive and 

productive presence in Brazil for half 

a century, in part because we have 

worked to establish ourselves as a 

good neighbor in those communities 

where we do business. Through our 

community relations efforts, we 

are making a difference not just in 

the economic well-being of Brazil, 

but also in the lives of its people. 

Supporting Social Institutions 

Halliburton employees give a wide range 

of support to social institutions, such as 

daycare centers and homes for the elderly. 

Forty-three volunteers from all around 

the country make weekly visits to these 

institutions. They have also gathered 

donations of building materials such 

as bricks and flooring to help rebuild a 

classroom at one of the daycare centers. 


Corporate Giving 

Total Contributions 


$231.2 

2004 

Halliburton Foundation (cash) 


$1.99 

2004 

$141.5 

2005 

$2.23 

2005 

$364.6 

2006 

$2.19 

2006 

In-Kind Donations (non-cash) 


$352.6 


$3.01 


The DRP is administered by ombudsmen 

who adhere strictly to the code of 

ethics and standards of practice of the 

International Ombudsman Association. 

The code is defined by three key 

principles: neutrality, independence 

and confidentiality. Communication 

with the DRP is considered privileged 

and, as such, does not constitute notice 

to the company. 

Senior management has shown 

unfaltering support for the DRP and 

strong confidence in its effectiveness, 

with the result that about 91 percent 

of cases have been resolved internally. 

Addressing interpersonal conflict 

internally allows for quicker resolution, 

repairs damaged relationships and fosters 

better working environments. Not only 

does internal resolution save time and 

money, but research has also shown that 

it has a direct, positive impact on safety 

performance, customer satisfaction, 

productivity and employee retention. 

Community Impact: It starts 

with being good neighbors. 

organizations; the environment; the 

arts; and other life-enriching programs. 

The organizations that are supported 

by the company are primarily those 

that are important to, and in many 

cases selected by, our employees. 

A major focus of the company’s giving 

is education. In 2007, Halliburton 

Foundation Inc. contributed $3.01 

million to elementary, secondary and 

higher education institutions worldwide. 

Through its University Software 

Grant Program, Halliburton provided 

software valued at $348 million to 59 

universities in 18 countries to use as 

learning and teaching aides. Using 

cutting-edge Landmark software in 

college accelerates the learning curve 

for engineering and geosciences 

students. In addition, when they enter 

the workforce, they are equipped to be 

more productive more quickly. More 

than 300 software grants have been 

awarded since 1996 to institutions in 

several countries including the U.K., 

Newfoundland, Nigeria, the United 

Arab Emirates and Kazakhstan. 

$227.0 

2004 

Direct Cash 


$2.25 

2004 

$136.2 

2005 

$3.10 

2005 

$360.1 

2006 

$2.34 

2006 

$347.3 


$2.36 


Being a considerate and helpful neighbor 

has been fundamental to Halliburton’s 

culture from the earliest days of the 

company. We believe that improving 

the quality of life in the communities 

where we operate is good business, and 

that business goals and social goals 

must be compatible for Halliburton to 

remain a leader in the world market. 

Community Relations Overview 

Halliburton gives back to communities 

through corporate financial 

contributions, employee giving and 

employee volunteerism. In 2007, 

Halliburton’s corporate giving 

totaled $352.6 million to hundreds 

of nonprofit organizations around 

the globe. These funds supported 

education, health and social services 

Employee Giving 

Our Giving Choices program enables 

employees to make contributions to 

charities they select and to receive a 

10 percent matching donation from 

Halliburton. The program – which has 

been available in Australia, Canada, 

the U.S. and the U.K. – was expanded 

this year into seven Middle Eastern 

countries, timed to coincide with the 

Muslim holy month of Ramadan. 

Overall, Halliburton employees 

pledged $2.9 million to approximately 

1,080 charities worldwide in 2007. 

Our employees’ impulse to generosity 

stirs them to give of their time and 

energy, too. To help employees find 

opportunities that match their passions 

and personal commitments, Halliburton 


encourages participation in Halliburton 

Volunteer Councils (HVCs). There are 

eight active HVCs in the U.S. and one in 

Canada, with startup HVCs in Dubai, 

United Arab Emirates; Yemen; Pakistan; 

Kuwait; Saudi Arabia; Oman; India; 

Mexico; and Argentina. HVCs partner 

with local charities, focusing efforts on 

the immediate needs of the community. 

Activities in 2007 included Habitat for 

Humanity building projects; walks, bike 

rides and races for muscular dystrophy, 

diabetes, breast cancer, AIDS and other 

catastrophic diseases; care packages and 

greetings cards for men and women in 

U.S. military service; and hundreds of 

other projects throughout the year. 

Human Rights 

Halliburton supports basic human rights 

and does not under any circumstances 

knowingly abuse these rights. We 

believe all employees should be treated 

with dignity and respect, and we insist 

that this belief be put into practice 

at all times in every workplace. We 

are committed to equal employment 

opportunity for all qualified individuals 

in hiring, promotions, training and 

all other aspects of employment, and 

we endeavor to create a workforce 

that reflects the diversity of the 

communities where we work. 

Our Code of Business Conduct (COBC) 

prohibits spoken, written, physical, 

sexual and racial harassment. It also 

prohibits unlawful discrimination 

against employees, shareholders, 

directors, customers and suppliers 

on the basis of race, color, age, sex, 

sexual orientation (added in 2007), 

religion or national origin. 

Halliburton does not employ forced, 

compulsory or child labor. We uphold 

freedom of association. We employ 

approximately 1,830 workers affiliated 

with labor unions in Argentina, 

Australia, Nigeria, Norway and the 

U.S. Our U.S. union employees work in 

New Orleans, Louisiana, for Local No. 

270 General Truck Drivers, Chauffeurs, 

Warehousemen and Helpers, and 

in Colony, Wyoming, in Local No. 

353C of the International Chemical 

Workers Union Council/United 

Food and Commercial Workers. 

Bribery and Corruption 

Halliburton’s COBC clearly mandates 

compliance with U.S. and foreign laws 

and regulations related to commercial 

bribery, antitrust issues and competition. 

Included among these is the U.S. 

Foreign Corrupt Practices Act (FCPA). 

Halliburton's policy prohibits bribery and 

corruption, undue influence in public 

policy making and monopoly practices. 

Halliburton’s policy prohibiting bribery 

is covered in our general COBC training. 

Since 2006, we have offered an online 

course focused specifically on the 

U.S. FCPA, with versions in English, 

Latin American Spanish, Brazilian 

Portuguese and French. A Chinese 

version was made available in 2007. The 

FCPA course is required for certain 

groups of employees. As of the end 

of 2007, 76 percent of approximately 

8,000 targeted eligible employees 

had completed the FCPA course. 

The company often enters into business 

relationships with persons and 

companies outside the U.S. Certain 

international business relationships, 

such as sales representative agreements, 

are subject to Halliburton’s system 

of controls and require the other 

parties to comply with the company’s 

separate Code of Business Conduct for 

International Business Relationships. 

COBC Training 

in thousands of training courses completed 

13.5 

2004 

14.6 

2005 

21.4 

2006 

33.5 



Anti-Competitive Policy 

The antitrust laws of the U.S. and other 

countries prohibit agreements or actions 

that might eliminate or discourage 

competition, bring about a monopoly, 

abuse a dominant market position, 

artificially maintain prices or otherwise 

illegally hamper or distort commerce. 

Halliburton does not tolerate any activity 

that violates antitrust laws applicable to 

the company’s business. Company policy 

prohibits any director, employee or agent 

of the company from entering into any 

behaviors or actions with any competitor 

that violates any antitrust laws. 

Halliburton’s Law Department guides, 

advises and, in many cases, pre-approves 

and coordinates any activities or issues 

that might have antitrust implications. 

Our complete antitrust policy can be 

viewed at www.halliburton.com. 

HALPAC 

The Halliburton Political Action 

Committee (HALPAC) was created 

to raise money and make financial 

contributions to selected political 

candidates, with the aim of helping to 

elect U.S. local, state and federal political 

candidates who support pro-business 

initiatives. HALPAC also contributes 

to candidates who champion specific 

issues that are important to Halliburton’s 

success and the welfare of our employees 

and is independent of any political party, 

candidate or organization. It draws from 

the suggestions of HALPAC members 

to determine which candidates or 

officials, regardless of party affiliation, 

it will support. HALPAC is funded by 

the voluntary contributions of eligible 

Halliburton officers and employees 

who are U.S. citizens. The company 

provides a matching contribution to 

the charity of the employee’s choice for 

each employee donation to HALPAC. 

HALPAC’s activities are regulated by 

the U.S. Federal Election Commission 

(FEC). Accordingly, HALPAC complies 

with all FEC disclosure and reporting 

requirements, including disclosure 

of any political contributions over 

$200. In such cases, the identity of 

both donor and recipient are available 

to the public from the FEC. 

Supplier Qualifications 

For the last year, Halliburton has used 

a standardized score card to evaluate 

potential strategic suppliers for possible 

work and to rate the performance of 

current strategic suppliers. The score 

card sets out criteria in four areas: 

financial excellence, operational 

excellence, strategic fit and alignment 

with Halliburton’s social, economic 

and HSE values. We use the same 

rating scale that is used to measure 

the performance of Halliburton 

employees in our PPR process. 

To meet our expectations for alignment 

with Halliburton values, key strategic 

suppliers must measure their own 

performance using a centralized 

system, demonstrate compliance with 

regulations, meet regulatory standards 

as appropriate and demonstrate 

improvement year-over-year. We review 


the performance of established suppliers 

twice each year and require corrective 

action if they do not meet expectations. 

Product Responsibility: 

It starts with diligence. 

As discussed elsewhere in this 

report, Halliburton’s HSE policy, a 

part of our COBC, requires that we 

continuously evaluate the HSE impacts 

of our products and services, with 

the goal that they cause the smallest 

environmental impact, are safe in their 

intended use, consume energy and 

natural resources efficiently and can be 

recycled, reused or disposed of safely. 

Divisions within the company may 

have specialized processes in place 

for addressing HSE matters that 

are particularly pertinent to their 

aspect of the company’s business. 

Following are a few examples. 

Completion Tools 

HSE reviews are conducted on 

every product as part of the overall 

development process. During design 

reviews, standardized checklists are 

used to assess product design for its 

potential impact on human health and 

safety and on the environment during 

manufacture, use and (where applicable) 

disposal. Human and environmental 

concerns are then included in the 

product’s operating manual and 

covered in training as needed. 

Product HSE Assessments 

The management team of the 

Duncan Technology Center in 

Duncan, Oklahoma, has integrated 

HSE considerations into its product 

development processes. In 2007, 

cross-functional teams in Duncan 

used risk-assessment tools and Kaizen 

methodology to ensure that HSE 

risks are identified and addressed 

throughout the life cycle of each new 

product. Also in 2007, Duncan teams 

began conducting risk assessments 

and documenting them as part of the 

product development project files. 

Internal customer feedback will be used 

to improve the risk-assessment process. 

Halliburton’s Baroid Fluid Services 

group has also made environmental 

assessment a part of the formal 

product development process. The 

new chemical introduction process 

for fluids includes HSE assessments at 

two stages: first, during the product 

needs assessment, and, again, prior 

to product commercialization. 

Replacing Radioactive Devices 

Halliburton is reducing health and 

safety risks by replacing radioactive 

densometers in certain tools. We 

are in the process of using mass 

flowmeters to replace radioactive 

densometers in the cement mixer 

recirculating line in cementing trucks 

and trailers. A high-pressure vibrating 

tube densometer will replace the 

radioactive densometer used in highpressure 

density applications. This safe 

technology is being used in a largercapacity 

densometer for productionenhancement 

fracturing applications. 


Overall Score Social Dimension 


34 

40 

2004 

58 




48 46 

36 

2005 

Product and Service Labeling 

Halliburton complies with applicable 

laws concerning product and service 

labeling. This includes providing 

Material Safety Data Sheets (MSDSs), 

which are required by the Occupational 

Safety and Health Administration 

(OSHA), as part of a comprehensive 

hazard communications program. 

Registered users of www.myhalliburton. 

com have access to more than 4,100 

Halliburton product MSDSs in eight 

regional formats and languages. 

70 72 

32 

2006 

52 

27 


69 


Halliburton believes 

that sustainability issues are key drivers 

for our business, and we’re taking steps to incorporate 

this mindset into all of our business practices. 

We hope that, through educating our employees 

on the business implications of sustainability, 

they will be encouraged to pursue their own 

individual sustainable endeavors. 

After all, it starts with all of us. 

Previous Reports 

Connecting 

Published in June 2006, for 

calendar year 2004-2005 

Corporate Sustainability Report 2006 

Calendar year 2006 

Current Report 

Calendar year 2007 

Report Parameters 

Reporting period: 

Calendar year 2007 

Date of most recent previous report: 

2006 

Reporting cycle: 

Annual 

For more information or additional 

copies, please contact: 

Halliburton Global Sustainable 

Development Manager 

1401 McKinney Street, Suite 2400 

Houston, Texas 77010 

United States 

sustainability@halliburton.com 

www.halliburton.com 

Boundary of the report: 

All countries, product service lines, 

joint ventures and non-whollyowned 

subsidiaries are included 

in financials only. 

Global Reporting 

Initiative Index 

Strategy and Profile 

Strategy and Analysis 2, 6 

Organizational Profile 4 

Report Parameters inside back cover 

Governance 8 

Significant Performance 

Indicators 9 

Economic 

Economic Performance 10 

Market Presence 12 

Indirect Economic Impact 15, 16 

Environment 

Energy 23 

Water 23 

Emissions, Effluents, Wastes 23 

Products and Services 23 

Compliance 27 

Social 

Labor Practices 30 

Community 36 

Human Rights 37 

Product Responsibility 39

HALLIBURTON 

© 2008 Halliburton. All Rights Reserved 

Printed in USA 

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Produced by Halliburton Communications 

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ensures that this paper meets Forest Stewardship 

Council standards for responsible forest 

management. This paper is also certified as 

Processed Chlorine Free (PCF) by the Chlorine 

Free Products Association. It is manufactured 

without the use of chlorine chemistry and 

is made from sustainable raw materials. 

Our choice of paper has saved: 

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for 24 people annually 

17,500 gallons of water, 

or 1,017 eight-minute showers 

33 BTUs of energy 

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2,247 pounds of solid waste 

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2007 Corporate Sustainability Report - Halliburton

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