(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)
[5. October 2007] There are more interesting things to discuss in relation to the Norwegian oil industry than who is the chairman of StatoilHydro, but few issues are equally inflamed. It is peculiar that Reiten is incompetent in the first serious matter to be dealt with by the board of the newly created oil giant. Equally piquant are the possible explanations for why the corruption issue associated with Saga Petroleum's work in Libya has not been raised before. Three days before Statoil's acquisition of Hydro's oil and gas division is completed, the suspicion of a corruption scandal in Hydro emerges, with clear similarities to Statoil's Iran scandal. It is noteworthy that the management of Hydro has not dealt with this matter more seriously in the past when they know the extent of the Statoil scandal and have spent a year preparing the merger.
We now know that Hydro inherited the problem from Saga Petroleum when they acquired the company in the fall of 1999. Smaller oil companies often operate in areas where the giants will risk their own reputation if they enter themselves, the small companies simply get away with more. Such situations place greater demands on the ethics of large state companies. It is striking that the then Saga leadership refuses to remember anything about the agreement in Libya, while the then Hydro director Egil Myklebust explains that the "consultancy agreement" signed by Saga to gain access to the oil business in Libya was outside Hydro's regulations and should therefore quits. Einar Lie, a scientist and author of Volume Three in Hydro's history, apparently knows nothing about this case, even though he has been through corruption issues and signature bonuses in Hydro's work in Angola. That the case appears to be considered so insignificant that those who know of it neither informs CEO Reiten nor the author, makes us wonder what other skeletons can be found in Hydro's cabinets.
We do not know if Hydro has deliberately kept this case away from the public and hoped that the skeleton remained in the closet. Nor do we have any basis for claiming that Eivind Reiten knew about this case, and thus deliberately avoided that merger process. But what this case illustrates more than anything, is the problem in that CEOs and CEOs move to the position of chairman of the board where they will take care of their successors. Reiten and anyone else in the same situation will have an obvious self-interest in defending previous decisions and strategy choices. The interesting point in this case is therefore not whether Eivind Reiten must leave, but that he should never have become chairman of the board.
