Statoil Chief Demands Investigation into Bribery Allegations

The chairman of state oil company Statoil is demanding a full investigation into an agreement by management to pay US $15 million in consulting fees tied to Statoil's business dealings in Iran. The deal raises questions that bribery is involved.

The US $15 million, an enormous amount by Norwegian standards, is to be paid over a 10-year period to a little-known consulting firm run by a 35-year-old Iranian named Abbas Yazdi. He in turn reportedly works closely with a director at the National Iranian Oil Company (NIOC) who also is the son of former Iranian president Akbar Hashemi Rafsanjani.

Oslo-based newspaper Dagens Naeringsliv first broke news of the contract, which calls for Statoil to pay the hefty consulting fees to a Swiss bank account controlled by Abbas Yazdi. His consulting firm, Horton Investments, with which Statoil cut the deal, is based in the tax haven Turks & Caicos.

Statoil already has paid out 40 percent of the contract sum but internal auditors started sounding alarms last summer and now Statoil chief executive Olav Fjell himself is being forced to field uncomfortable questions.

Fjell himself told Dagens Næringsliv earlier this week that Statoil now will check all the payments it's made to Yazdi's firm, and try to determine whether the money could be construed as bribery. He said the involvement of Mehdi Hashem Rafsanjani raised some questions, but he said Rafsanjani's NIOC involvement was unrelated to Statoil's business dealings, and his father was out of power politically.

Yazdi, meanwhile, told Dagens Naeringsliv that none of Statoil's money has gone to Rafsanjani, but he failed to produce any proof of the claim, calling any such documentation "confidential." He also claimed he merely introduced Rafsanjani to Statoil executives, as part of his consulting work.

Other Statoil executives have defended the deal, saying the Norwegian oil company simply has paid for valuable information on doing business in Iran. Statoil last fall won a major contract to operate one of the world's largest gas fields for Iran, South Pars. But the amount of the payments and their terms, involving the tax haven and a Swiss account, have raised suspicions. Statoil Chairman Leif Terje Loeddesoel says he now expects a full report from Fjell on the company's business dealings in Iran, especially its relations with Mehdi Hashem Rafsanjani.

Government officials also say they expect a full accounting from Statoil. "I'm satisfied that Statoil's management will handle this," said Einar Steensnaes, Norway's minister for oil and energy. "What's most important is that any doubts over the deal be removed."