 Statoil chief Helge Lund (left), shown here with Reiten, reportedly learned of the bribery concerns just last week. PHOTO: SVEIN ERIK FURULUND |
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No sooner had StatoilHydro started trading on the Oslo Stock Exchange than Norsk Hydro sent out a message that it was investigating payments made to consultants in Libya from 1999 to 2001.
Hydro paid the consultants USD 6.85 million and is "unsure" about a bill for USD 300,000 that was paid to the operator of the oil field Murzuq.
All told, the suspicious payments amount to NOK 37 million, but Hydro chief executive Eivind Reiten denied his company was exposing skeletons in the closet.
"I view this as a question that has come up in the last phase (of the merger) and I wouldn't characterize it as anything
No sooner had StatoilHydro started trading on the Oslo Stock Exchange than Norsk Hydro sent out a message that it was investigating payments made to consultants in Libya from 1999 to 2001.
Hydro paid the consultants USD 6.85 million and is "unsure" about a bill for USD 300,000 that was paid to the operator of the oil field Murzuq.
All told, the suspicious payments amount to NOK 37 million, but Hydro chief executive Eivind Reiten denied his company was exposing skeletons in the closet.
"I view this as a question that has come up in the last phase (of the merger) and I wouldn't characterize it as anything else," Reiten said at a press conference on the Libya probe Monday morning.
Reiten is also the new chairman of StatoilHydro's board, even though he sparked controversy last summer for accepting lucrative stock option payments. Norway's left-center government, which ultimately controls both Statoil and Hydro because of the state's large shareholdings, reportedly tried to find someone else for the job, but failed.
Reiten insisted that there so far was no evidence that its Libya operation violated any rules, "but we want to be sure that's the case."
Reiten was head of light metals for Hydro when the payments were made, and he was vague about details surrounding the payments and the "consultants" to whom they were made.
He said that as far as he knew, the payments were made to one Libyan consulting company and one consultant who is a Libyan citizen. He claimed Hydro "inherited" the consulting agreements after taking over Saga Petroleum in 1999. Saga had ownership stakes in the Libyan oil fields Mabruk and Murzuk.
A Hydro employee tipped Statoil’s internal auditors about the payments that may amount to bribery. StatoilHydro chief executive Helge Lund, who took over at Statoil after a bribery scandal of its own in Iran, reportedly learned about the potentially "unethical payments" last Wednesday, just five days before the merger.
StatoilHydro has hired a prestigious US law firm, Sullivan & Cromwell, to investigate the payments. Norway's white collar crime unit, Økokrim(The Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime), also has been notified, as have US stock exchange authorities.
StatoilHydro's combined share fell in price when trading opened Monday morning and there was little doubt the bribery allegations spoiled what had been expected to be a celebratory debut day. The new firm is running a major promotion campaign about the merger, which gives StatoilHydro 31,000 employees in around 40 countries around the world.
Analysts have widely praised the combination, saying the two Norwegian firms will be better off united than competing against each other in global markets.
Nina Berglund/E24/NTB
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