Statoil Hires Ernst & Young to Audit Nigerian Oil Deal

Statoil has brought in auditors Ernst & Young to investigate the 1998 sale of a portion of a Nigerian exploration license to Nigeria's Allied Energy.

Company spokesman Kai Nielsen said Statoil had deployed Ernst & Young to head off any suspicions from the media that the Nigerian asset sale was improperly handled. "Under normal circumstances we would never have put an audit out on this, but when you see what's happened during the past few weeks, we wanted to bring up everything that could be seen as negative in the press," Nielsen said.

Statoil is still licking its wounds over the September departure of three top executives implicated in a consultancy deal in Iran that is currently under investigation by Norwegian law enforcement authorities and the U.S. Securities and Exchange Commission.

Norwegian newspapers Monday alleged Statoil had deliberately undercharged Allied Energy for its slice in a jointly held 40% stake in an offshore exploration block, implying that by not claiming full value for the stake it was offering a bribe.

Nielsen denied the allegation, saying Statoil is still pursuing Allied for its share of the less than $5 million owed for the stake.

Statoil and BP originally paid $27 million to Allied for a 40% farm in to the block in 1993. Exploratory drilling showed the area wasn't commercially viable and so a decision was made to sell it back.

"There were not too many people who were enthusiastic about it," Nielsen said, defending the low sale-back price. A spokesman for BP in London said he wasn't able to comment immediately on the matter.

Ernst & Young is also auditing all international consultancy deals undertaken by Statoil, as part of the company's internal review following the Iran revelations.