Halliburton HAL, a major oilfield services company, is facing questions about its trade with Russia, as it has been revealed that the company exported more than $7 million worth of equipment to Russia since it announced the end of operations in the country last year.
The Guardian's Report
The Guardian reported that Halliburton subsidiaries exported the equipment to the company's former operation in Russia in the six weeks following the sale. The equipment was primarily sourced from the United States and Singapore, although some of those also came from other countries such as the United Kingdom, Belgium and France.
The export to Russia resumed in December 2022, from two unrelated companies, bringing the total value to at least $7.1 million since HAL closed its operations.
The Puzzling Continuation
The report stated that export of Halliburton equipment to Russia continued until at least the end of June. More recent records are not available at present.
HAL defended its actions, saying that it wound reduce its Russian operations "less than six months" after the invasion of Ukraine and that it "no longer conducts operations in Russia." The company also said that it is "committed to complying with all applicable sanctions."
The Timing and Geopolitical Implications
The news of Halliburton's trade with Russia also comes at a sensitive time.The United States and its allies are currently working to increase pressure on Russia to end its war in Ukraine. The revelation of Halliburton's continued trade with Russia adds complexity to this already tumultuous situation.
In conclusion, it remains to be seen whether HAL will face any action for its trade with Russia. However, the revelations are likely to damage the company's reputation.
Zacks Rank and Key Picks
Currently, HAL carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are CVR Energy CVI and USA Compression Partners USAC, both sporting a Zacks Rank #1 (Strong Buy), and Archrock AROC, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy is valued at $3.47 billion. In the past year, its shares have risen 21.5%.
CVI currently pays a dividend of $2 per share, or 5.79% on an annual basis. Its payout ratio currently sits at 30% of earnings.
USA Compression Partners is worth approximately $2.17 million. USAC currently pays a dividend of $2.10 per unit, or 9.49% on an annual basis.
The company offers natural gas compression services to oil companies and independent producers, processors, gatherers, and transporters of natural gas and crude oil. It also operates stations.
Archrock is valued at around $1.90 billion. It delivered an average earnings surprise of 15.08% for the last four quarters and its current dividend yield is 5.12%.
Archrock is a provider of natural gas contract compression services and aftermarket services of compression equipment.
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