updated 3/14/2007 11:54:31 AM ET 2007-03-14T15:54:31

Halliburton plans to hire more than 13,000 new workers this year in the U.S. and elsewhere as it splits its headquarters between Houston and Dubai, an executive said in a memo obtained by the Associated Press on Wednesday.

The oil service firm's announcement this week that its chief executive officer, Dave Lesar, would lead the company from a new headquarters in the Arab Gulf state raised an outcry among some in the United States.

A number of congressional Democrats raised fears that the move would mean job cuts in the United States and suspicions that Halliburton Co. was trying to avoid U.S. taxes. The firm says it will remain incorporated in Delaware and that the move would not affect its tax burden.

In a memo to U.S. employees on Tuesday, Chief Operating Officer Andy Lane said Halliburton was girding for an expansion and would increase its work force by nearly 30 percent this year.

"It is our expectation that our planned growth for 2007 to 2009 will mean that we will hire more than 13,000 new employees in 2007," Lane wrote. "This will include growth in our Houston employment numbers."

Halliburton did not immediately respond to questions about where the other jobs would be created.

Lane said that the Dubai move had generated "a lot of media attention" but the wisdom of moving Lesar to the Arab boomtown would be borne out in increased revenues from the eastern hemisphere.

"As I've learned many times in life, this too shall pass," Lane wrote in the memo.

Halliburton spokeswoman Cathy Mann said the memo was meant to explain Lesar's Dubai announcement and related plans to the company's U.S. workers.

Some Americans were startled to hear Lesar's announcement Sunday that he would lead the company from a new headquarters in Dubai, the glitzy financial capital of the Mideast.

Halliburton has been a lightning rod for criticism because of the more than $19 billion in U.S. military contracts awarded by the Pentagon to its KBR unit. Democrats in the U.S. Congress have claimed that KBR, formerly known as Kellogg, Brown and Root, benefited from ties to Vice President Dick Cheney, who once led Halliburton, and congressional Republicans.

Halliburton is now in the process of cutting all remaining ties with KBR, which will allow the company to focus on selling oil exploration and production equipment and helping producers manage wells and reservoirs.

In the memo, Lane said Halliburton hopes to use its Dubai headquarters to parlay its dominance in U.S. gas drilling rigs _ where it maintains an 83 percent share _ into similar success in the Mideast oil exploration business.

"We must have more balance between our strength in the U.S. gas market and the market outside the U.S. and Canada, where 77 percent of the drilling activity is for oil," he said.

Lesar, who is in the midst of moving to Dubai, will try to make friends among the Arab world's massive state-owned oil companies that dominate global oil production, the memo said.

Last year, more than 38 percent of Halliburton's $13 billion oil field services revenue stemmed from sources in the eastern hemisphere, where the firm has 16,000 of its 45,000 global employees.

The Middle East, home to some 60 percent of the world's proven oil reserves, has been explored and drilled far less intensively than North America.

Western businesses have been pouring into Dubai to capture regional energy revenues and take advantage of some of the world's most liberal tax, investment and residency laws. Dubai charges no corporate or income tax and in many cases there are no restrictions for companies on repatriating profits or importing employees.

The western-oriented Emirate also boasts upscale luxuries favored by expatriate executives, such as five-star beach resorts, golf courses, gargantuan shopping malls _ one of which boasts an indoor ski slope _ and a low crime rate that allows westerners to live scattered around the city, rather than in guarded compounds, as in Saudi Arabia.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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