Norway Government: To Probe Oil Co Over Iran Payments

Morning Star:

OSLO -(Dow Jones)- The Norwegian government said Friday it will initiate a corruption probe into the oil research company Sintef over payments to two companies for allegedly helping it win contracts in Iran.

Norway's corporate police Oekokrim said it had been notified by Norwegian oil workers union NOPEF that payments had allegedly been made to Hinson Engineering, a U.K. Virgin Island-based company, and Iranian company Behineh Part Pouya.

Sintef said it paid $101,000 to Hinson and $12,000 to Behineh Part Pouya before canceling the contracts.

The Norwegian company is one of the country's top petroleum research companies. Last year it completed a multi-million dollar contract with the Iranian Oil & Energy Industries Development company for plans on the West Zagros fields.

In minutes from Sintef's latest board meeting, the company said an investigation carried out by auditors Deloitte - and paid for by Sintef - found no evidence of corruption or improper behavior by any of its employees.

But, the board noted, the auditor found that proper routines hadn't been followed and several "points of concern" had arisen over the two contracts."

Based on those concerns, Sintef immediately canceled the contracts, it said.

Gunnar Sand, director of strategic planning at Sintef, later said the points of concern raised were over the ownership of the companies and the country of payment. The Virgin Islands are a tax haven.

He said the exact ownership of the Hinson company had still yet to be identified. Transparency International, an organization established a few years ago to raise international business reporting standards, asks firms to be particularly aware of their partner's ownership and payment locations.

Sand said the two companies were originally contracted to help Sintef negotiate the cultural and business practices Iran. "By ourselves, we wouldn't have gotten anywhere," he said.

He added those sorts of companies are essential, "even just to get paid...the checks seem to take a while getting through the bureaucracy there."

Sintef said the concerns originally arose after Norwegian international oil company Statoil ASA (STO) was implicated - and later fined - for paying $15 million to an Iranian consultancy.

Sintef, which has operated in Iran since 1999, then audited its Iranian contracts. "There hasn't been much attention paid to Transparency International until the Statoil case," Sand said.

Oekokrim said in its statement, "The investigation has the goal of determining whether there had been any punishable acts of corruption." No charges have been filed.