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UK Defence Facilities

Volume 450: debated on Monday 23 October 2006

To ask the Secretary of State for Defence what recent discussions he has held with Halliburton and KBR; and if he will seek the assurances of the two companies on their continued commitment to its UK defence facilities, with particular reference to (a) Devonport dockyard and (b) Appledore shipyard. (92743)

My noble Friend the Minister for Defence Procurement (Lord Drayson) met representatives of the company on 11 July to discuss a range of issues including the developing maritime industrial strategy.

Halliburton-KBR is, currently, a single commercial entity which through its majority (51 per cent.) shareholding in Devonport Management Ltd (DML) owns and operates Devonport Royal Dockyard and is a prime support contractor to the Royal Navy providing comprehensive through-life support for submarines, surface ships and equipments. Officials maintain regular contact with both DML and its parent company Halliburton-KBR on all aspects of our joint business interests. The Appledore yard is not normally used for defence purposes.

Recently Halliburton has stated its intention to spin off KBR as a separate entity, and officials have sought assurances that the UK's strategic interests, which are protected by conditions in the dockyard sale agreement, will be preserved. Halliburton have indicated readiness to provide these, but they remain to be negotiated.