Engineering and construction company KBR Inc. said Thursday that its fourth-quarter earnings fell 17 percent as U.S. military work in Iraq declined and some contract fees were reversed, and it trimmed the low end of its full-year outlook.

Profit for the fourth quarter slid to $73 million or 45 cents a share, from $88 million, or 54 cents a share, a year earlier. Revenue fell 12 percent to $2.96 billion from $3.39 billion in the 2008 quarter.

The company’s biggest division — government and infrastructure — posted a $109 million loss for the period. Among other charges, KBR reversed $112 million in previously booked award fees on its LogCAP contract, which covers services to U.S. troops and government officials in Iraq. The contract covers everything from construction to laundry service.

The U.S. plans to cut its troop level in Iraq to between 35,000 and 50,000 personnel by the end of the summer, from 120,000. The move has reduced demand for KBR’s services.

The results still beat estimates of analysts polled by Thomson Reuters, who had expected earnings of 39 cents a share on $2.81 billion in revenue.

KBR previously forecast 2010 earnings per share between $1.60 and $1.80. After writing off the lost award fees, it now sees the low end of its guidance at $1.50 per share.

“Nonetheless, we continue to be optimistic about KBR’s ability to deliver continued growth in our overall business despite an expected continued decline in LogCAP volumes,” Bill Utt, KBR chairman, president and CEO, said in a statement.

For the year, KBR posted net income of $290 million, or $1.79 a share, down from $319 million, or $1.84 per share, in 2008. Revenue declined 5 percent to $12.11 billion from $11.58 billion.

Shares rose 3 cents to close at $20.34.

(Associated Press)

Mehmet Sepil, Chief Executive Officer of Turkish oil exploration company Genel Enerji, has paid the biggest fine handed out by the UK’s Financial Services Authority (FSA) to an individual for market abuse.

Genel has a 25% stake in the licence to explore the Miran oilfield in the Kurdistan Region of Iraq, with London-listed Heritage Oil owning 75%.

Mr. Sepil was fined £967,005 ($1.5m) for dealing in shares of Heritage Oil on the basis of inside information, the UK market regulator said yesterday.

Two other Genel executives – Chief Commercial Officer, Murat Ozgul, and Exploration Manager, Levent Akca – were also fined £105,240 and £94,062 respectively for insider dealing.

The amounts include repayment of profits of more than £300,000 made by the three.

The companies had been in merger negotiations, and because of their close relationship Genel had been kept informed on the progress of Heritage’s testing in the Miran field – by 4^th May 2009 the tests had been concluded and were successful, but the market had not yet been informed.

On 5^th May, the three bought more than £1.5m worth of Heritage shares; the following morning, Heritage announced a discovery of  between 2.3 to 4.2 billion barrels of oil. The shares jumped 25% within hours, at which point the men sold their holdings.

The incident came to light as part of the merger negotiations. When questioned about any transactions in Heritage shares, the men disclosed the deals. Shortly afterwards, they voluntarily reported the matter to the authorities.

The FSA found that they did not set out to commit market abuse, that they were not familiar with the legal requirements which prohibited them from dealing in Heritage shares, and that they had not received advice on these at the time.

As a result of their cooperation, the regulator did not bring criminal charges, and reduced the fines by 30%.

Margaret Cole, director of enforcement at the FSA, said: “The FSA expects those entrusted with inside information not to betray that trust. We will not tolerate the abuse of a privileged position to make a personal profit at the expense of other market participants and these penalties underline our commitment to combating this behaviour.”

The Ministry of Finance in Iraq signed a bilateral agreement with Denmark to write- off the debt owed by Iraq by one 100%, and affirmed that States which will reduce debts on Iraq would have a priority in the implementation of investment projects in it.

The Finance Minister Bayan Jabr said in a statement issued by the ministry that Iraq was able to reduce 120 $ billion of the debt owed in its trust, amounting of to 140 billion dollars, adding that this reduction comes as a continuation of the process of debt cancellation promised by the creditor nations of Iraq.

Al-Zubaidi , said the signing of the agreement with Denmark will reduce the remaining debt amounting about 20% after he signed with them earlier the convention for reduction of 80% of the debt of 55 $ million, noting that Iraq has begun negotiating States extinguished 80 % of the debt to extinguish the remaining amount . The minister pointed out that Iraq will give priority to investment companies of the States which will reduce debts on Iraq, 100 % for work in Iraq, noting in this regard that Iraq had managed to write- off debt for some foreign countries like the United States and Cyprus and Malta and the United Arab Emirates, and reduced its debt by 80% for a number of countries, including Russia, Germany and France. ”

Al-Zubaidi pointed out that debts owed by Iraq to Saudi Arabia and Kuwait, which he refused to reveal their size has not been resolved, stressing that Iraq is seeking to sign a number of agreements to reduce debts, with some Arab countries like Egypt and Morocco. For his part, said Danish Ambassador Michael winder, “Denmark is continuing to support Iraq in all fields of economic, agricultural and industrial as well as support for human rights situation and provide support to Iraqi universities, pointing out that Danish companies looking out for work in Iraq as soon as possible.