The US Army on Friday awarded $2 billion worth of contracts to repair Iraq's oil industry to a unit of Vice President Dick Cheney's old firm Halliburton and US construction giant Parsons, which teamed up with Worley Group of Australia.
The two contracts, one for the northern oil fields that went to Parsons and the other for Iraq's southern oil fields that went to Halliburton's Kellogg Brown and Root, followed months of controversy over work done by KBR under its first deal to rebuild the oil sector.
The US Army Corps of Engineers said in a statement the two contracts would have a minimum value of $500,000 each and that the maximum value for the north would be $800 million and for the south it would be $1.2 billion.
The first contract to rebuild the oil sector was handed to KBR last March on a no-competition basis and the Corps pointed out that Friday's contracts were awarded in "full and open competition."
"The contractors were selected on the basis of best value to the government and qualifications to do the work described in the solicitation," the Corps said in a statement.
Halliburton said the new contract validated all the work it had done in Iraq under the first contract, which has given the company $2.3 billion in business so far.
"This decision is an endorsement of the courageous work being done by Halliburton's employees in Iraq," said Dave Lesar, chairman, president and chief executive officer of Halliburton, in a statement.
"We were chosen because we were the best qualified with a proven track record of the ability to perform," Lesar added.
KBR's first Restore Iraqi Oil contract was clouded with controversy, from allegations in a draft audit that the company overcharged for fuel brought into Iraq to others that it got the work because of its close ties to the White House.
Soon after the draft audit became known, the military announced that its own fuel agency, the Defence Energy Support Centre, would take over the job of organising bringing oil into Iraq.
The Pentagon's Inspector General was asked by military auditors this week to look into the pricing issue.
Halliburton has strongly denied any wrongdoing and says it brought fuel in for the best price possible.
The new work will include extinguishing oil well fires; environmental assessments and cleanup at oil sites; oil infrastructure condition assessments; engineering design and construction necessary to restore infrastructure.
"The Corps of Engineers' mission is to restore the oil production, oil refining and gas processing capability to pre-war levels for the benefit of the Iraqi people," the Corps statement said.