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CORRESP
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    halresponsetocommntltr10-k.htm

    November
      15, 2007

    MEMORANDUM

              TO:

              Division
                of Corporation Finance

              United
                States Securities and Exchange Commission

              FROM:

              Halliburton
                Company

              RE:

              Halliburton
                Company

              Form
                10-K for the Fiscal Year Ended December 31, 2006

              Forms
                10-Q for the Fiscal Quarters Ended March 31, 2007, June 30, 2007
                and

              September
                30, 2007

              File
                No. 1-3492

              Response
                to SEC Staff Comments dated October 31,
                2007

    We
      are
      responding to comments received from the staff of the Division of Corporation
      Finance of the Securities and Exchange Commission (the “Commission”) by
      letter dated October 31, 2007 regarding our filings referenced
      above.  Where applicable, our responses refer to our Annual Report on
      Form 10-K for the fiscal year ended December 31, 2006 (the “2006 Form
      10-K”) or our Quarterly Report on Form 10-Q for the fiscal quarter ended
      June 30, 2007 (the “June 30, 2007 Form 10-Q”).  For
      your convenience, our responses are prefaced by the staff’s corresponding
      comment in italicized text.

    We
      respectfully submit that, as our responses below indicate, we do not believe
      that amendments to the 2006 Form 10-K or the June 30, 2007 Form 10-Q are
      necessary or should be required in connection with the staff’s
      comments.  We will consider adjusting disclosures in future filings as
      noted in this response letter when appropriate.

    In
      this
      respect we note that, as a result of transactions in November 2006 and April
      2007,1 our previously wholly owned
      subsidiary KBR, Inc. (“KBR”) was reclassified to discontinued operations
      in the condensed consolidated financial statements in our June 30, 2007 Form
      10-Q and has been and will be reflected as such in all subsequent
      filings.  For accounting purposes, we ceased including KBR’s
      operations in our results effective March 31, 2007.  Subsequent to the
      KBR separation, in the third quarter of 2007, we also realigned our remaining
      products and services to be better aligned with the process of exploring for
      and
      producing from oil and natural gas wells.  The resulting internal
      reorganization led to a change in our reportable operating segments in that
      period.

    If
      an
      amendment to the 2006 Form 10-K were filed, we believe GAAP calls for the
      restatement of the Halliburton financial statements for all periods presented
      therein to address the reclassification of KBR as discontinued operations and
      our new reportable segments, which would substantially change the presentation
      and financial statements in such an amended Form 10-K compared to the 2006
      Form
      10-K filed on February 28, 2007 that the staff has reviewed.  We
      understand that the SEC staff unofficially may have a different point of
      view.  Regardless, given the significant changes in our business
      profile during 2007 and the fact that the first, second and a majority of the
      staff’s third comments below relate to a business that has been discontinued, we
      believe amending the 2006 Form 10-K for these items would not be helpful to
      our
      current investors or other users of our financial statements.

    Form
      10-K for the Fiscal Year Ended December 31, 2006

    General

              1.

              Please
                file all material contracts as exhibits, including the LogCAP III
                contract.

    Response:  We
      believe we have filed as exhibits all contracts required to be filed under
      Item
      601(b)(10) of Regulation S-K.  That item requires registrants to file
      as exhibits every contract not made in the ordinary course of business which
      is
      material to the registrant.  Item 601(b)(10)(ii) instructs that, if
      the contract is such as ordinarily accompanies the kind of business conducted
      by
      the registrant and its subsidiaries, it will be deemed to have been made in
      the
      ordinary course and need not be filed unless it falls within one of four
      categories:

    (1)           contracts
      with directors, officers, promoters, etc.;

    (2)           a
      contract upon which the registrant’s business is substantially
      dependent;

              (3)

              a
                contract for the acquisition or sale of any property, plant or equipment
                for consideration exceeding 15% of the fixed assets of the registrant
                on a
                consolidated basis; or

    (4)           a
      material lease.

    The
      LogCAP III contract was entered into in the ordinary course of business, and
      we
      believe it does not fall within one of the four categories of Item
      601(b)(10)(ii) that would require an “ordinary course of business” contract to
      be filed.

    We
      have
      filed or incorporated by reference in the 2006 Form 10-K thirty-one (31)
      documents that we believe are responsive to Item 601(b)(10) of Regulation S-K,
      including material contracts not made in the ordinary course of business and
      contracts or arrangements with executive officers and directors.  We
      believe we have complied with Item 601(b)(10) of Regulation S-K.

              2.

              Please
                disclose in necessary detail the information that Item 101(c)(1)(ix)
                of
                Regulation S-K requires.  In this regard, we note the statement
                in Note 1 at page 77 that “[s]imilar to many cost-reimbursable contracts,
                these government contracts are typically subject to audit and adjustment
                by our customer.”

    Response:  Item
      101(c)(1)(ix) of Regulation S-K requires a “description of any material portion
      of the business that may be subject to renegotiation of profits or termination
      of contracts or subcontracts at the election of the Government.”

    While
      we
      do not repeat all the discussions regarding these government contracts in the
      “Business” section, we have substantial disclosure regarding termination,
      forfeiture of profits, suspension of payments, fines, and suspensions or
      debarment from doing business with the government in:

              •

              “Business
                Environment and Results of Operations – KBR – Government and
                Infrastructure segment” on pages 32-33 where we
                discuss:

              §

              Specific
                major contract awards

              §

              Duration
                of the contracts

              §

              Expected
                work completion dates

              •

              “Critical
                Accounting Estimates – Accounting for Government Contracts” on pages 45-46
                and Note 1 to the consolidated financial statements, “Revenue Recognition
                – Accounting for Government Contracts” on page 77 where we discuss that
                our U.S. Government contracts had an award fee revenue element which
                is a
                variable profit percentage and subject to the government’s
                discretion.

              •

              “Forward
                Looking Information and Risk Factors – Customers and Business –
                Governmental and Capital Spending” on pages 61-62, where we discuss the
                risk of a decline in governmental spending and outsourcing for military
                and logistical support.

              •

              “Forward
                Looking Information and Risk Factors – United States Government Contract
                Work” on pages 52-55 and the entirety of Note 12 to the consolidated
                financial statements on pages 96-99, which address in substantial
                detail
                the requirements of Item 101(c)(1)(ix) of Regulation
                S-K.

    For
      example, both on page 52 and in Note 12 to the consolidated financial
      statements, we disclose the following with regard to United States government
      contact work:

    Given
      the
      demands of working in Iraq and elsewhere for the United States government,
      we
      expect that from time to time we will have disagreements or experience
      performance issues with the various government customers for which we
      work.  If performance issues arise under any of our government
      contracts, the government retains the right to pursue remedies which could
      include threatened termination or termination, under any affected
      contract.  If any contract were so terminated, we may not receive
      award fees under the affected contract, and our ability to secure future
      contracts could be adversely affected, although we would receive payment for
      amounts owed for our allowable costs under cost-reimbursable
      contracts.  Other remedies that could be sought by our government
      customers for any improper activities or performance issues include sanctions
      such as forfeiture of profits, suspension of payments, fines, and suspensions
      or
      debarment from doing business with the government.  Further, the
      negative publicity that could arise from disagreements with our customers or
      sanctions as a result thereof could have an adverse effect on our reputation
      in
      the industry, reduce our ability to compete for new contracts, and may also
      have
      a material adverse effect on our business, financial condition, results of
      operations, and cash flow.

    In
      addition, beginning on page 52 and also in Note 12 to the consolidated financial
      statements, we disclose the following with regard to DCAA audit issues under
      United States government contact work:

    Our
      operations under United States government contracts are regularly reviewed
      and
      audited by the Defense Contract Audit Agency (DCAA) and other governmental
      agencies.  The DCAA serves in an advisory role to our
      customer.  When issues are found during the governmental agency audit
      process, these issues are typically discussed and reviewed with
      us.  The DCAA then issues an audit report with its recommendations to
      our customer’s contracting officer.  In the case of management systems
      and other contract administrative issues, the contracting officer is generally
      with the Defense Contract Management Agency (DCMA).  We then work with
      our customer to resolve the issues noted in the audit report.  If our
      customer or a government auditor finds that we improperly charged any costs
      to a
      contract, these costs are not reimbursable, or, if already reimbursed, the
      costs
      must be refunded to the customer.

    We
      also
      disclose in Note 12 to the consolidated financial statements (with substantially
      similar language under “Forward Looking Information and Risk Factors -- United
      States Government Contract Work” beginning on page 52) that:

    The
      DCAA
      is continuously performing audits of costs incurred for the foregoing and other
      services provided by us under our government contracts.  During these
      audits, there have been questions raised by the DCAA about the reasonableness
      or
      allowability of certain costs or the quality or quantity of supporting
      documentation.  The DCAA might recommend withholding some portion of
      the questioned costs while the issues are being resolved with our
      customer.  Because of the intense scrutiny involving our government
      contracts operations, issues raised by the DCAA may be more difficult to
      resolve.  We do not believe any potential withholding will have a
      significant or sustained impact on our liquidity.

    In
      addition, although we have not repeated the language in this response letter,
      we
      have additional detailed disclosure under either “Forward Looking Information
      and Risk Factors -- United States Government Contract Work” beginning on page 52
      of the 2006 Form 10-K or in Note 12 to the consolidated financial statements,
      or
      in both places, regarding specific services provided under the LogCAP III
      contract (including security services, laundry services, containers, dining
      services and other matters) and any issues with the government customer with
      respect to billing, payment, cost reimbursement or documentation.

    Given
      the
      extent of the disclosure in other sections of the 2006 Form 10-K addressing
      the
      descriptions referenced in Item 101(c)(1)(ix) of Regulation S-K, we respectfully
      submit that amendment of the 2006 Form 10-K should not be required simply to
      repeat the information in the “Business” section of the 2006 Form
      10-K.

    Consolidated
      Financial Statements

    Note
      13, Other Commitments and Contingencies, page 99

              1.

              We
                note your discussion of numerous legal and other contingencies here
                and
                within other footnotes to your financial statements.  For
                certain matters, you indicate that, as of December 31, 2006, you
                have not
                accrued any amounts regarding the matters, or that amounts accrued
                are not
                material.  For these matters, your disclosure does not indicate
                the estimated additional loss, or range of loss, that is reasonably
                possible.  A statement that a contingency is not expected to be
                material does not satisfy the requirements of SFAS 5 if it is at
                least a
                reasonable possibility that a loss exceeding amounts already recognized
                may have been incurred and the amount of that additional loss would
                be
                material.  In that case, you must either disclose the estimated
                additional loss, or range of loss, that is reasonably possible, or
                state
                that such an estimate cannot be
                made.

    Response:  We
      have reviewed our disclosures for legal and other contingent matters in the
      notes to our financial statements in light of your comment.  It should
      be noted that the decision to disclose a number of issues in the notes to the
      consolidated financial statements was not driven by the requirements of SFAS
      5.  Instead, we disclosed these matters as a result or in anticipation
      of the significant amount of media and/or other governmental agency attention
      given to the issues.  In some cases, we originally disclosed the
      matter following prior SEC comments resulting from media articles.  We
      believe that most of these matters were not material from a SFAS 5 standpoint,
      and we believed it remote that a material loss would be incurred with respect
      to
      these matters.  Specifically, the following matters fall under this
      category:

              •

              Note
                12

              –

              DCAA
                Audit Issues

              –

              Investigations

              –

              DCMA
                System Reviews

              –

              The