Texas-based Halliburton Must Pay $200M for Defective Bolts

September 29, 2011

Halliburton Co. said Wednesday that as a result of an arbitration panel ruling, it must pay Barracuda & Caratinga Leasing Co. $200 million related to a claim Barracuda filed against a former Halliburton subsidiary.

Before KBR Inc. was spun off from the Houston oil services company in 2007, it had a contract with Barracuda & Caratinga for the development of the Barracuda and Caratinga oil fields off the coast of Brazil.

Barracuda & Caratinga later claimed that certain subsea bolts used in the project were defective and the arbitration panel recently ruled that KBR is liable for the cost of replacing the bolts.

Halliburton said Wednesday that it’s “pursuing all possible avenues” to appeal the ruling.

When Halliburton and KBR split, Halliburton agreed to pay all the costs and expenses, cash settlements or cash arbitration awards, related to the replacement of the bolts, the company said.

The company said it expects to record a third-quarter charge to discontinued operations as a result of the arbitration award.

In morning trading, Halliburton shares fell 47 cents to $33.99.

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