Norway's StatoilHydro Begins Operations, Announces Probe of Questionable Libya Contracts
( AP ) -- The new Norwegian oil company StatoilHydro ASA, created by Statoil ASA's takeover of Norsk Hydro ASA's oil and gas division, began operations and was listed on the Oslo stock exchange Monday.
StatoilHydro shares opened down 0.54 percent at 182.75 kroner (US$35.83, euro23.43) on the Oslo bourse, while Norsk Hydro, which will now operate as a pure aluminum and power generation company with about 25,000 employees, opened up 3.46 percent at 78.70 kroner (US$15.72, euro10.09).
On its first day as a listed company, StatoilHydro announced it was calling an external investigation of contracts in Libya that it took over as part of the acquisition of Norsk Hydro's oil and gas unit. The contracts will be examined for possible violations of Norwegian or international law, the company said.
In its own statement, Norsk Hydro ASA said it had taken those contracts in 1999 as part of its acquisition of Saga Petroleum ASA, which was then Norway's No. 3 oil company. It said the contracts mainly covered a 25 percent interest in Libya's Mabruk field and 8 percent in the Murzuq field.
Norsk Hydro said it unsuccessfully sought to sell the interests in 2000 and 2001, "because Hydro could not ensure that the agreements were in compliance with Hydro's ethical guidelines."
The company said its concerns were about a January 1999 agreement in which Saga agreed to pay considerable consultancy fees as part of acquiring the oil exploration acreage. It did not say which consultancy firm was contracted.
Norsk Hydro said it had honored those agreements with payments totaling US$6.85 million (euro5.15 million) in 2000 and 2001, but rejected a US$900,000 (euro670,000) bill in August 2002 because it could not determine whether the agreement met its ethical standards. It said a similar invoice amounting to US$300,000 (euro224,000) was paid in December 2000.
"We don't, today, have grounds to say that there were violations of rules, but it is simply that if we have questions, the most important contribution we can make is to get to the bottom of this," said Hydro Chief Executive Eivind Reiten, who is also chairman of the StatoilHydro board.
The new StatoilHydro group has about 31,000 employees and is 62.5 percent Norwegian government-owned. The companies earlier said it will be the world's largest offshore oil and natural gas producer, surpassing Royal Dutch Shell PLC.
In announcing the deal in December, the companies said the main objective of the roughly US$30 billion (euro22.4 billion) deal was to allow expansion outside Norway.