Source AP ©

Investigation of possible corruption makes StatoilHydro chairman resign

Eivind Reiten, the chairman of oil company StatoilHydro ASA will resign due to an investigation of possible corruption over contracts in Libya.

"Out of consideration to StatoilHydro, I have after careful consideration decided that it is right for me to stand down from my position as chairman of the board of StatoilHydro," Reiten said.

The new company was created by state-controlled Statoil's takeover of the oil and gas division of smaller Norwegian rival Norsk Hydro, 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.

On Monday - 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 would be examined for possible violations of Norwegian or international law.

Reiten said he decided to step down to avoid a conflict of interest because he is also chief executive of Norsk Hydro, which is now a pure aluminum and power generation company. In a separate announcement, StatoilHydro said its current deputy chairman, Marit Arnstad, will take over the chair until a replacement is elected.

In an earlier statement, Norsk Hydro ASA said it had taken over those contracts in 1999 as part of its acquisition of Saga Petroleum ASA, which was then Norway's No. 3 oil company. 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 corruption investigation was one of several high-profile cases to hit Norsk Hydro and Reiten in recent months. In August, Norsk Hydro board chairman Jan Reinaas stepped down after facing harsh criticism over the board paying huge options settlements to Reiten and other top leaders to clear the books before the Statoil takeover.

Shortly afterward, Reiten's chief communications officer, Cecilie Ditlev-Simonsen, resigned after acknowledging that she failed to inform tax authorities of an inheritance from her mother in a Swiss bank account.

Norwegian Prime Minister Jens Stoltenberg said he respected Reiten's decision "to handle a serious matter in the correct way."

The new StatoilHydro group has about 31,000 employees. Reiten will remain chief executive of Norsk Hydro, which has about 25,000 workers.

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