Oil firm to help recover remains of Russian submarine crew

The state-owned Russian contractor that designed the Kursk awarded the contract to Halliburton's Norwegian subsidiary on Monday, linking the oil services giant to the naval drama that captured world attention.

An explosion on Aug. 12 sank the sub in the Barents Sea, touching off a frantic effort to save 118 sailors believed trapped inside and clinging to hopes of rescue. All were later found to have died.

Experts say Halliburton was a natural choice for the job because of its expertise in working in a deep-sea environment.

The Halliburton subsidiary is expected to begin the operation Oct. 18. The subsidiary and the military design bureau Rubin will use a diving bell to lower two Russian divers and one Norwegian to the Kursk, which rests more than 350 feet below the surface.

Seven holes will be cut into the Kursk, which is lying at a depth of just more than 100 meters. Only the Russians will enter the vessel. The Norwegian diver will organize the operation.

Igor Spassky, the head of Rubin, said it would be impossible to bring back the remains of all the crewmen, since most of the compartments in the shattered submarine were destroyed in the disaster.

Authorities have not determined why the Kursk sank during naval exercises.

The Norwegian ship Regalia, a Halliburton vessel, will take about 10 days to get to the scene, north of the Arctic Circle, according to Halliburton spokesman Birger Haraldseid.

Mr. Haraldseid said the Regalia, a rig used for underwater construction in the offshore oil industry, would be able to withstand rough weather in the Barents Sea above the Arctic Circle.

Neither Halliburton nor the Russian government would divulge the value of the recovery contract, though Rubin had reportedly offered $9 million to another Norwegian company, Stolt Offshore, to take part in the operation. Russian media reports said the deal fell through because Stolt Offshore, whose divers participated in earlier attempts to rescue the Kursk crew, demanded $12 million.

With winter approaching, the Halliburton crew will be racing somewhat against the clock, said John Flipse, director emeritus of the Offshore Research Center, jointly run by Texas A&M University and the University of Texas. Mr. Flipse said they would have until the first week of December at the latest.

"While the program is basically straightforward, in that climate it's not going to be pleasant," Mr. Flipse said.

Halliburton, which has operations around the world but maintains a low profile, has been thrust into an unaccustomed spotlight because former chief executive Dick Cheney is now George W. Bush's vice presidential running mate.

During almost five years at Halliburton, Mr. Cheney, who served as secretary of defense under President George Bush, was credited with using his international contacts to promote Halliburton's business.

Russian news releases on the contract Monday pointed to Halliburton's link to American presidential politics, said Fred Mutalibov, vice president of research at Southwest Securities in Dallas.

"He would typically help Halliburton to get large contracts," Mr. Mutalibov said. "I believe he was instrumental in getting this contract. But Halliburton is very competent in working in subsea environments."

Halliburton, founded in 1919, provides products and services to the petroleum and energy industries, with offices in 130 countries and about 95,000 employees. The company reported revenue of $14.9 billion in 1999.

"We expect that we'll be able to retrieve 20 percent to 30 percent of the crew in this operation, which would be a very good result," Mr. Spassky said. "The rest we will have to bury after we raise the sub itself."

Mr. Spassky acknowledged that Russia had neglected the skills and technology for such an operation and said Russia welcomed the foreign help despite the secrecy surrounding its submarine technology.

"The preparation for this operation have shown that, in the last 10 to 12 years, we have paid too little attention to submarine technology," Mr. Spassky said. "Thus, we are happy to ask for foreign aid."

Dow Jones News Service contributed to this report.