Statoil executive resigns amid state's corruption charges against the company

Statoil ASA CEO Olav Fjell accepted the resignation of Richar John Hubbard, a director with the company, following charges of corruption against Statoil made Wednesday by Økokrim, the state's authority for investigation and prosecution of economic crime.

Sept. 12, 2003

2 min read

By OGJ editors

HOUSTON, Sept. 12 -- Statoil ASA CEO Olav Fjell accepted the resignation of Richar John Hubbard, a director with the company, following charges of corruption against Statoil made Wednesday by Økokrim, the state's authority for investigation and prosecution of economic crime.

Norwegian newspapers The Norway Post and Aftenposten reported the incident Friday.

Økokrim's charges against Statoil involve a controversial 11-year, $115 million business development agreement between Statoil and Iranian consultancy firm Horton Investment. Statoil made the agreement, which was concluded June 12, 2002, "to strengthen Statoil's insight into financial, industrial, legal, and social issues associated with business development in Iran," Statoil said in a statement. Norwegian analysts, meanwhile, viewed the deal as "illegally influencing foreign officials," Aftenposten reported.

Fjell announced Friday Statoil has canceled "with immediate effect" the consultancy contract, adding that the company would pay Horton no more than $5.2 million, which has already been paid out. At the time the agreement was signed, Statoil and Horton agreed jointly not to make the deal known to the public, Statoil said.

Statoil CEO Olav Fjell said, "This decision [to cancel the consultancy contract] has been taken in order to remove any doubt whatsoever about Statoil's compliance with its ethical guidelines." Fjell added, "The contract and its media coverage has created an impression that Statoil operates in an ethical borderland. Statoil cannot live with misgivings about the group's ethical standards."

Ottar Rekdal, who was appointed by Fjell as acting executive vice-president for the company's international exploration and production business, will temporarily replace Hubbard, who had held that position with the company.

Statoil said it has submitted to Økokrim the requested material from the company's internal review.

"Statoil has specific guidelines and procedures laid down to ensure a best possible decision-making basis for consultancy agreements," the company said. "These procedures include reputation analyses before agreements are entered into with agents or consultants. The internal assessments, which were carried out prior to this contract being signed, were not exhaustive enough."