Norwegian Oil Group Fined over Iran Deal

Statoil, the Norwegian oil and gas group, and one of its top former executives have been fined by the country's authorities for attempting to gain improper influence over government officials in Iran. Under the ruling by the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Okokrim), Statoil will have to pay a fine of NKr20m ($2.9m). Richard Hubbard, its former head of international exploration and production, has been fined NKr200,000.

The decision comes after an extensive investigation into a consultancy agreement between Statoil and Horton Investment.

Horton was to receive $15.2m over 11 years to help Statoil with its activities in Iran.

When the agreement came to light last September Mr Hubbard, Olav Fjell, chief executive, and Leif Terje Loeddesoel, chairman, were forced to resign.

Okokrim said the Horton agreement "involved an offer of improper advantages in
return for Mehdi Hashen [the son of former Irania president Hashemi Rafsai jani] and or others influencing persons who were or would be involved in the decision-making process relevant to Statoil's commercial activity in Iran, including administrative acts concerning the award of contracts". At the time the contract was agreed, this was not an offence, but it became so after July 4 2003 when the law changed. Okokrim said the company failed in its duty to terminate the contract after that date.

Okokrim said there was no basis for concluding that there "was in fact any influencing of [the] decision-making process on the Iranian side".