SEC v. Statoil, ASA

UNITED STATES OF AMERICA 

Before the  
SECURITIES AND EXCHANGE COMMISSION 

 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 54599 / October 13, 2006 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-12453 
 
 
In the Matter of 
 

STATOIL, ASA,  
 
Respondent. 
 
 

 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS, MAKING 
FINDINGS, AND IMPOSING A 
CEASE-AND-DESIST ORDER 
PURSUANT TO SECTION 21C OF 
THE SECURITIES EXCHANGE ACT 
OF 1934  

 
 

I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate 
that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C 
of the Securities Exchange Act of 1934 (“Exchange Act”), against Statoil, ASA (“Statoil” 
or the “Respondent”). 
 

II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted 
an Offer of Settlement (the “Offer”) which the Commission has determined to accept.  
Solely for the purpose of these proceedings and any other proceedings brought by or on 
behalf of the Commission, or to which the Commission is a party, and without admitting 
or denying the findings herein, except as to the Commission’s jurisdiction over the 
Respondent and the subject matter of these proceedings, which are admitted, Respondent 
consents to the entry of this Order Instituting Cease-and-Desist Proceedings, Making 
Findings, and Imposing a Cease-and-Desist Order Pursuant to Section 21C of the 
Securities Exchange Act of 1934 (“Order”), as set forth below.   

 
 
 
 
 
 
 



 

III. 
FACTS 

 
 On the basis of this Order and the Respondent’s Offer, the Commission finds1 
that: 

 
Summary

  
1. In June 2002 and January 2003, Statoil paid bribes to an Iranian 

government official (the “Iranian Official”) in order for him to use his influence to: (i) 
assist Statoil in obtaining a contract to develop three phases of the South Pars oil and gas 
field in Iran (the “South Pars Project”) and (ii) open doors to additional projects in the 
Iranian oil and gas exploration industry.  The Iranian Official was the head of the Iranian 
Fuel Consumption Optimizing Organization (“IFCOO”), a subsidiary of the National 
Iranian Oil Company (“NIOC”).  Statoil agreed to pay the Iranian Official through a 
consulting contract (the “Contract”) with an intermediary company (the “Consulting 
Company”) organized in the Turks and Caicos Islands and nominally owned by a third 
party located in London, England.  The Contract obligated Statoil to make initial 
payments of $200,000 and $5 million, and ten subsequent annual payments of $1 million 
each.  In October 2002, Statoil obtained the contract to develop the South Pars Project.  
Statoil made the initial payments to the Iranian Official, but in June 2003, Statoil 
suspended payments under the Contract.  On September 6, 2003, the Contract was 
publicly disclosed in the Norwegian press.  On September 10, 2003, Statoil terminated 
the Contract.  The next day, the Norwegian authorities announced an investigation into 
the Contract.  During the relevant time period, Statoil employees circumvented Statoil’s 
internal controls and procedures that were in place to prevent illegal payments, and 
Statoil lacked sufficient internal controls.  In addition, by mischaracterizing the payments 
as legitimate consulting fees, Statoil violated the books and records provisions of the 
federal securities laws.   
 

Respondent 
 

2.  Statoil is a public company organized under the laws of the Kingdom of 
Norway and headquartered in Stavanger, Norway.  Statoil explores for and develops oil 
and gas resources around the globe, and has American Depositary Shares that trade under 
the symbol STO on the New York Stock Exchange and are registered pursuant to Section 
12(b) of the Exchange Act (15 U.S.C. § 781(g)).  Statoil is required to file reports with 
the Commission under Section 13 of the Exchange Act (15 U.S.C. § 78m), and is an 
“issuer” within the meaning of the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. § 
78dd-1. 
 
 

                                                 
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and 
are not binding on any other person or entity in this or any other proceeding.  

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Background 

 
3. Statoil is an international oil and gas company involved primarily in the 

exploration for, development, production, and sale of oil and natural gas from the 
Norwegian Continental Shelf and elsewhere.  In late 2000 and early 2001, under its former 
Chief Executive Officer (“CEO”), Statoil was pursuing opportunities to expand its business 
internationally.  At that time, Statoil held participation interests in several exploration and 
production licenses outside of Norway, but held only a few small operatorships outside of 
Norway.  In the fall of 2000, Statoil hired a new senior executive to direct Statoil’s 
International Exploration and Production Department (“Senior Executive”), who reported 
directly to the CEO. 

 
4. Statoil identified Iran as a country to focus on to secure operatorships.  

The Iranian Ministry of Oil, through NIOC and various wholly-owned companies, 
controls the rights to develop the oil and gas resources of Iran.  In November 2000, 
Statoil and NIOC entered into a Cooperation Agreement, which identified areas of 
mutual interest for future cooperation between Statoil and NIOC.  
  

5.         In the spring of 2001, certain Statoil employees in Iran accepted an 
invitation from one of the Iranian Official’s relatives to meet with the Iranian Official.  
These Statoil employees learned that the Iranian Official’s father was a former president 
of Iran who led the Expediency Council, a body that mediated between the politically-
elected and the clerically-controlled parts of Iran’s government.  After meeting with the 
Iranian Official, Statoil tested and assessed the Iranian Official’s influence by, among 
other things, having the Iranian Official send a message back to Statoil through the 
Iranian Oil Minister.  A Statoil employee described the test as demonstrating that the 
Iranian Official was “powerful” and was the “link” to opportunities to obtain business in 
Iran.  After the initial contacts, Statoil determined that the Iranian Official was an advisor 
to the Oil Minister, and that the Iranian Official’s family was powerful and highly 
influential in the oil and gas business in Iran.  At the time Statoil employees made contact 
with the Iranian Official, Statoil employees knew of publicly reported accusations of 
corruption against the Iranian Official’s family, but did not perform any due diligence to 
investigate the accusations.   

 
6. In August 2001, the Iranian Official visited Statoil’s facilities in 

Stavanger, Norway, and met with senior Statoil employees, including a chief adviser to 
the CEO, the Senior Executive, and a senior employee in Statoil’s International 
Exploration and Production Department who had direct responsibility for Statoil’s 
activities in Iran (the “E & P Executive”).  The Iranian Official’s position and influence 
were well known to Statoil management participating in this meeting.  The written 
agenda for the visit referred to the Iranian Official as “President NIOC, Iranian Fuel 
Cons. Org.”  The Iranian Official was also described in internal Statoil documents as an 
“advisor[] to the Iranian Oil Minister” and a “very important guest[].”  At the time, 
internal Statoil memoranda described the Iranian Official’s family as “control[ling] all 
contract awards within oil and gas in Iran.” 

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The Bribery 

 
7. In the second half of 2001 and into 2002, the Senior Executive discussed 

with Statoil’s CEO the possibility of entering into a consulting contract to arrange 
payments to the Iranian Official, and began negotiating the terms with the Iranian 
Official.  In November 2001, Iranian authorities proposed that Statoil consider seeking a 
participation interest in a subcontract to develop the South Pars Project, under a contract 
awarded to an Iranian oil and gas development company (the “Development Company”) 
that was indirectly owned and controlled by the Iranian Ministry of Oil.      

 
8. In December 2001, the Iranian Official sent a sample consulting contract 

and payment proposal to the Senior Executive, which the Iranian Official represented had 
previously been used in his dealings with other multinational oil companies.  In January 
2002, the Senior Executive provided the CEO with a memorandum that described a 
proposal from the Iranian Official that would have required Statoil to (i) pay a “success 
fee” payable upon Statoil’s being awarded a participation interest in the development of 
the South Pars Project; (ii) provide money for “charities” of the Iranian Official’s choice; 
and (iii) make payments through an offshore company.  

   
 9. Although the CEO objected to the Iranian Official’s proposal, the CEO 
ultimately approved Statoil’s entering into a contract with the Iranian Official in the total 
amount of $15.2 million to be paid over approximately 11 years.  The final Contract was 
structured as a payment for vaguely-defined consulting services through a third-party 
offshore company.  The Iranian Official was not named in the Contract because disclosing 
Statoil’s relationship with the Iranian Official could likely jeopardize Statoil’s ability to 
obtain business in Iran.   
 
 10. In return for the payments, the Iranian Official used his influence to assist 
Statoil in obtaining business in Iran.  For example, the Iranian Official (i) provided Statoil 
employees in Iran nonpublic information concerning oil and gas projects in Iran and (ii) 
showed Statoil copies of bid documents of competing companies that Statoil could not 
access through appropriate channels.  
 
 11. On May 15, 2002, Statoil and the Development Company entered into an 
agreement in principle that provided the central terms for Statoil’s participation in the 
offshore portion of the Development Company’s contract for the South Pars Project.  At 
that time, it was contemplated that the contract for the South Pars Project would be 
finalized by June 15, 2002, although several issues remained to be negotiated. 
  

12. On June 12, 2002, the E & P Executive, acting on a power of attorney from 
the CEO, signed the Contract on behalf of Statoil.  When Statoil signed the Contract, the 
Senior Executive believed that Statoil would be awarded a participation interest in the 
development of the South Pars Project.  Statoil and the Development Company signed a 
Participation Agreement in October 2002, which Statoil expected would yield millions of 
dollars in profit. 

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13. In late June 2002, Statoil received an invoice from the Consulting 

Company instructing it to pay $200,000 under the terms of the Contract, and instructing 
that the money be routed through a United States bank in New York, New York to a bank 
account in Switzerland held by a company not named in the Contract.  Statoil made the 
payment on June 26, 2002, according to the instructions in the invoice.  In December 
2002, Statoil received a second invoice from the Consulting Company instructing it to 
pay $5 million, with payment instructions identical to those in the June 2002 invoice.  On 
January 15, 2003, Statoil paid $5 million pursuant to the instructions in the invoice.   

 
14. Statoil violated the anti-bribery provisions of the federal securities laws 

contained in the Foreign Corrupt Practices Act when it arranged for the payments to the 
Iranian Official.  The payments were intended to (i) induce the Iranian Official to use his 
influence with NIOC; (ii) influence NIOC’s decision about whether to award Statoil a 
participation interest in the development of the South Pars Project that would net Statoil 
several millions of dollars; and (iii) secure improper advantage for Statoil by positioning 
it to obtain future business in Iran, potentially worth hundreds of millions of dollars.   
 

Books and Records Violations 
 
 15. Statoil failed to properly account for the illegal payments and failed to 
accurately describe the Contract in its books and records.  Instead, Statoil improperly 
characterized the payments it made as legitimate payments for “consulting fees for 
special consultants and analyses relating to technical, administrative, tax, and financial 
matters…,” and improperly characterized the Contract as an ordinary consulting 
agreement. 
 

Internal Controls Violations 
 
 16. In entering into the Contract, certain Statoil management responsible for 
the Contract circumvented Statoil’s internal controls designed to prevent illegal 
payments.  They concealed the Contract’s true nature and true parties, and violated Statoil’s 
procurement policies by directing that the Contract should be entered into and that payments 
be made under the Contract to parties not named in the Contract.  Statoil management 
responsible for the Contract performed no due diligence concerning the named or unnamed 
parties to the Contract.  Statoil had inadequate systems for review of the Contract and lacked 
controls sufficient to provide reasonable assurances that the Contract complied with 
applicable laws.  Statoil’s lack of sufficient internal controls enabled executives responsible 
for the Contract to conceal the illegal payments to the Iranian Official.   
 

Statoil’s Response and Recent Events 
  
 17. In late March 2003, Statoil’s internal audit department reported to Statoil’s 
Chief Financial Officer (“CFO”) that Statoil had paid $5.2 million under a consulting 
agreement to an entity that had not been named in the Contract.  In compliance with 
Statoil’s internal procedures, and at the direction of the CFO and head of internal audit, 

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Statoil’s security group began an inquiry into the Contract.  As part of its inquiry, the 
security group determined that even though he was not named in the Contract, the Iranian 
Official was the “consultant” under the Contract, and confirmed his position and family 
ties in Iran.  In early June 2003, the security group prepared an “internal investigative 
report” which concluded that there was “a strong indication of the consultant being 
involved in corrupt-like practices,” and that by entering into the Contract, Statoil may 
have violated Norwegian and U.S. anti-bribery laws.   
 
 18. In spite of the security group’s troubling report, Statoil’s senior 
management failed to take appropriate action to address the Contract and Statoil’s 
relationship with the Iranian Official.  On June 5, 2003, the security group and Statoil’s 
chief internal auditor presented their findings to Statoil’s then-Chairman of the Board, 
who, instead of taking up the matter, told them that the matter should be investigated 
further and taken up by the CEO.  Later in June 2003, the security group presented its 
findings to the CEO, recommending that no more payments be made under the Contract 
and that the Contract be terminated.  The CEO agreed to suspend payments under the 
Contract, but the CEO refused to terminate the Contract or to address further the principal 
concerns of the security group. 
 
 19. On September 6, 2003, the Contract was disclosed in the Norwegian press 
and on September 10, 2003, Statoil terminated the Contract, while Statoil’s internal audit 
and security group divisions were still working to finalize a letter to the Board of 
Directors addressing the Contract.  After the Contract’s existence became public 
knowledge, the Senior Executive and the Chairman of the Board resigned.  As a 
consequence of Statoil’s Board of Directors expressing no confidence in him, the CEO 
also resigned. 
 
 20. On September 23, 2003, the Commission staff contacted Statoil to inform 
Statoil of the staff’s inquiry.  Since then, Statoil has cooperated with the staff’s 
investigation, producing all documents and information that the staff requested, including 
voluntary production of documents protected by the attorney-client privilege pursuant to 
a non-waiver agreement and early production and identification to the staff of relevant 
documents.  Statoil also agreed to make employees available for interviews and 
encouraged employee cooperation by agreeing to pay travel expenses and attorneys’ fees.   
Statoil’s Board of Directors has taken remedial actions, including retaining outside 
counsel to conduct an investigation of the Contract, and a separate investigation into 
other non-Norwegian contracts, the results of which were provided to the staff.  Statoil 
has also designed and is implementing a remedial plan, which includes (i) the creation of 
a corporate compliance officer and ethics committees, (ii) expanded roles for Statoil’s 
Audit Committee to oversee compliance with the FCPA and other applicable foreign 
bribery laws, (iii) new reporting lines directly to the Audit Committee and Board of 
Directors, (iv) new ethics, procurement, and due diligence policies, (v) enhanced 
programs for educating and training executives and employees on ethical matters, 
including FCPA/anti-bribery compliance training, and (vi) an ethical help-line operated 
by a third-party, which provides anonymity for callers.   

   

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Norwegian Authorities’ Actions
 

21. On September 11, 2003, Norwegian government authorities from the 
National Authority for Investigation and Prosecution of Economic and Environmental 
Crime (“Økokrim”) seized documents from Statoil’s offices as part of an investigation of 
Statoil.  On June 29, 2004, following its investigation, Økokrim issued penalty notices to 
Statoil in the amount of approximately $3 million and to the Senior Executive in the 
amount of approximately $30,000, charging them with violating Norway’s trading-in-
influence statute.  Statoil and the Senior Executive agreed to pay the penalties without 
admitting or denying the violations. 

 
IV. 

FEDERAL SECURITIES LAW VIOLATIONS 
 
 1. As a result of the conduct described above, Statoil violated Section 30A of 
the Exchange Act, which prohibits any issuer with a class of securities registered pursuant to 
Section 12 of the Exchange Act, in order to obtain or retain business, from giving, or 
authorizing the giving of, anything of value to any foreign official for purposes of 
influencing the official or inducing the official to act in violation of his or her lawful duties, 
or to secure any improper advantage; or to induce a foreign official to use his influence with 
a foreign government or foreign governmental instrumentality to influence any act or 
decision of such government or instrumentality.    
 
 2. As a result of the conduct described above, Statoil violated Section 
13(b)(2)(A) of the Exchange Act, which requires reporting companies to make and keep 
books, records, and accounts, which, in reasonable detail, accurately and fairly reflect their 
transactions and disposition of their assets. 

3. As a result of the conduct described above, Statoil violated Section 
13(b)(2)(B) of the Exchange Act, which requires all reporting companies to devise and 
maintain a system of internal accounting controls sufficient to provide reasonable 
assurances that transactions are recorded in accordance with management’s general or 
specific authorization; transactions are recorded as necessary to permit preparation of 
financial statements in conformity with generally accepted accounting principles or any 
other criteria applicable to such statements, and to maintain accountability for assets; 
access to assets is permitted only in accordance with management’s general or specific 
authorization; and the recorded accountability for assets is compared with the existing 
assets at reasonable intervals and appropriate action is taken with respect to any 
differences. 

4. As a result of the conduct described above, Statoil violated Section 
13(b)(5) of the Exchange Act, which prohibits any person or company from knowingly 
circumventing or knowingly failing to implement a system of internal accounting 
controls as described in Section 13(b)(2)(B), or knowingly falsifying any book, record, or 
account as described in Section 13(b)(2)(A). 

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5. As a result of the conduct described above, Statoil violated Rule 13b2-1 of 
the Exchange Act, which prohibits any person or company from, directly or indirectly, 
falsifying or causing to be falsified, any book, record or account subject to Section 
13(b)(2)(A). 

V. 
 
 In determining to accept the Offer, the Commission considered remedial acts 
undertaken by the Respondent and cooperation afforded the Commission staff. 

 
VI. 

UNDERTAKINGS 
 

 Respondent undertakes to:  
 
 1. Retain, through its Board of Directors, within sixty (60) calendar days of the 
issuance of this Order, and for a period of three years from the date of retention, an 
independent compliance consultant (“Compliance Consultant”), not unacceptable to the staff 
of the Commission, to review and evaluate Statoil’s internal controls, record-keeping, and 
financial reporting policies and procedures as they relate to Statoil’s compliance with  the 
books and records, internal accounting controls, and anti-bribery provisions of the FCPA, 
codified at Sections 13(b)(2)(A), 13(b)(2)(B), and 30A of the Exchange Act.  This review 
and evaluation shall include an assessment of those policies and procedures as actually 
implemented in practice.  The compensation and expenses of the Compliance Consultant, 
and of the persons hired under his or her authority, shall be paid by Statoil.  Statoil may 
extend the time period for retention of the Compliance Consultant with prior written 
approval of the Commission staff. 
 
 2. Statoil shall cooperate fully with the Compliance Consultant.  The 
Compliance Consultant shall have the authority to take such reasonable steps, in the 
Compliance Consultant’s view, as necessary to be fully informed about the operations of 
Statoil within the scope of his or her responsibilities under this Order.  To that end, Statoil 
shall provide the Compliance Consultant with access to files, books, records, and personnel 
that fall within the scope of his or her responsibilities under this Order, provided that Statoil 
shall not be obligated to provide the Compliance Consultant with files, books and records 
that are protected by the attorney-client privilege or work product doctrine and that are not 
the subject of a non-waiver of privilege agreement with the Commission.  However, if the 
Compliance Consultant requests access to materials or information that Statoil reasonably 
believes to be protected by the attorney client  privilege or the work product doctrine, 
Statoil shall in good faith consider that request, and shall consider whether providing 
access would assist the Compliance Consultant in performing his or her duties.  It shall be 
a condition of the Compliance Consultant’s retention that the Compliance Consultant is 
independent of Statoil and that no attorney-client relationship shall be formed between them.   
    

3. Statoil shall require the Compliance Consultant to assess whether Statoil’s 
policies and procedures are reasonably designed to detect and prevent violations of the 

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FCPA, and during the three-year consultancy, Statoil shall require the Compliance 
Consultant to conduct an initial review and prepare an initial report, followed by two 
follow-up reviews and follow-up reports as described below.  With respect to each of the 
three reviews, after initial consultations with Statoil, the United States Department of 
Justice (“DOJ”), and the Commission staff, Statoil shall require the Compliance 
Consultant to prepare a written work plan for each of the three reviews, which shall be 
submitted to Statoil, the Commission staff, and DOJ.  Statoil shall require 
the Compliance Consultant to submit the same work plan to the Commission staff 
and DOJ, and the work plan as finally adopted by the Compliance Consultant shall be the 
same for both agencies.  In order to conduct an effective initial review and to fully 
understand any existing deficiencies in controls, policies, and procedures related to the 
FCPA, the Compliance Consultant’s initial work plan shall include such steps as are 
necessary to develop an understanding of the facts and circumstances surrounding the 
violations described above in Section III.  As a condition of the Compliance Consultant’s 
retention by Statoil, the Compliance Consultant shall agree to maintain the confidentiality 
of Statoil’s trade secrets and other confidential business information in conformity with 
Norwegian law, and to give due consideration to Statoil’s need for operational flexibility 
and preservation of business relationships with third parties, provided that nothing in this 
paragraph shall preclude the Compliance Consultant from sharing such confidential 
information with the Commission staff and DOJ.   

4. In connection with the initial review, Statoil shall require the Compliance 
Consultant to issue a written report, within one hundred twenty (120) calendar days after 
being retained, setting forth the Compliance Consultant’s assessment and making 
recommendations reasonably designed to improve Statoil’s program, policies, and 
procedures for ensuring compliance with the FCPA.  Statoil shall require that the 
Compliance Consultant provide the report to Statoil’s Board of Directors and 
contemporaneously transmit a copy to the following individuals or their successors: (1) 
Bruce Karpati, Assistant Regional Director, Division of Enforcement, Securities and 
Exchange Commission, 3 World Financial Center, Room 4300, New York, NY 10281-
1022; (2) Deborah E. Landis, Assistant United States Attorney, 1 St. Andrews Plaza, 
New York, NY 10007; and (3) Mark F. Mendelsohn, Deputy Chief, Fraud Section, 
Criminal Division, U.S. Department of Justice, 10th and Constitution Ave., N.W. (Bond), 
Washington, D.C. 20530.  Statoil shall allow the Compliance Consultant to extend the 
time period for issuance of the report with prior written approval of the DOJ and the 
Commission staff.   

5.  Within one hundred twenty (120) calendar days after receiving the report, 
Statoil shall adopt all recommendations in the report of the Compliance Consultant; 
provided, however, that within one hundred twenty (120) calendar days after receiving 
the report, Statoil shall advise the Compliance Consultant and the Commission staff in 
writing of any recommendations that it considers to be unduly burdensome, impractical, 
costly, or contrary to Norwegian law. With respect to any recommendation that Statoil 
considers unduly burdensome, impractical, costly, or contrary to Norwegian law, Statoil 
need not adopt that recommendation within that time but shall propose in writing an 
alternative policy, procedure or system designed to achieve the same objective or 

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purpose.  As to any recommendation on which Statoil and the Compliance Consultant do 
not agree, such parties shall attempt in good faith to reach an agreement within sixty (60) 
calendar days after Statoil serves the written advice.  In the event Statoil and the 
Compliance Consultant are unable to agree on an alternative proposal, Statoil shall abide 
by the determinations of the Compliance Consultant, to the extent such proposal would 
not cause Statoil to violate Norwegian law.  With respect to any recommendation that the 
Compliance Consultant determines cannot reasonably be implemented within one 
hundred twenty (120) calendar days after receiving the report, Statoil shall allow the 
Compliance Consultant to extend the time period for implementation with prior written 
approval of the Commission staff and DOJ. 

6. Statoil shall require the Compliance Consultant to undertake two follow-
up reviews to determine whether Statoil’s policies and procedures are reasonably 
designed to detect and prevent violations of the FCPA.  Within one hundred twenty (120) 
calendar days of initiating each follow-up review, the Compliance Consultant (i) shall 
complete the review, (ii) certify whether Statoil’s anti-bribery compliance program, 
including its policies and procedures, is appropriately designed and implemented to 
ensure compliance with the FCPA, and (iii) report on the Compliance Consultant’s 
findings in the same fashion as set forth in paragraph VI.4 with respect to the initial 
review. Statoil shall adopt the follow-up recommendations in the same fashion as set 
forth in paragraph VI.5 with respect to the initial review.  The first follow-up review shall 
commence one year after retention of the Compliance Consultant, and the second follow-
up review shall commence at least one year after completion of the first follow-up 
review.  Statoil shall allow the Compliance Consultant to extend the time period for these 
follow-up reviews with prior written approval of the Commission staff and DOJ, 
provided that the tenure of the Compliance Consultant shall only exceed three years if 
Statoil has not fulfilled its responsibilities as described in this Undertakings section.      

7. In undertaking the reviews described in Paragraphs VI.1 through VI.6 
above, Statoil shall require the Compliance Consultant to formulate conclusions based on 
sufficient evidence obtained through, among other things, (i) inspection of documents, 
including, but not limited to, all of Statoil’s policies and procedures relating to Statoil’s 
anti-bribery compliance program; (ii) onsite observation of Statoil’s systems and 
procedures, including, but not limited to, Statoil’s internal controls, recordkeeping and 
internal audit procedures; (iii) meetings with and interviews of Statoil employees, 
officers, directors and any other relevant persons; and (iv) analyses, studies and testing of 
Statoil’s anti-bribery compliance program.   In undertaking such assessment and reviews, 
the Compliance Consultant, at his or her own discretion, may rely, to a reasonable extent 
and after reasonable inquiry, on reports, studies, and analyses issued or undertaken by 
other consultants hired by Statoil prior to the date of this Order. 

8. The Compliance Consultant’s charge, as described above, is to review 
Statoil’s controls, policies and procedures related to the compliance with the FCPA.  To 
the extent the Compliance Consultant, during the course of his or her assessment, 
discovers that corrupt payments or corrupt transfers of property or interests may have 
been offered, promised, paid, or authorized by any Statoil entity or person, or any entity 

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or person working directly or indirectly for Statoil, Statoil shall require the Compliance 
Consultant to promptly report such payments to Statoil’s Corporate Compliance Officer, 
to its Audit Committee, and to its outside counsel for further investigation.  If the 
Compliance Consultant refers the matter to Statoil’s Corporate Compliance Officer, its 
Audit Committee, and its outside counsel, Statoil shall promptly report the same to the 
Commission staff and DOJ at the addresses listed in paragraph VI.4.  If the Compliance 
Consultant reasonably concludes that disclosure to Statoil’s Corporate Compliance 
Officer, its Audit Committee, or its outside counsel would be inappropriate for any 
reason, the Compliance Consultant may limit such disclosure to any one or more of the 
foregoing parties.  If the Compliance Consultant reasonably concludes that disclosure to 
even one of the foregoing parties would be inappropriate for any reason, Statoil shall 
allow the Compliance Consultant to refer the matter directly to the Commission staff, 
DOJ, or Norwegian law enforcement officials or authorities.  In the event of such a direct 
referral, Statoil shall require the Compliance Consultant to make a similar disclosure to 
Statoil’s Corporate Compliance Officer, its Audit Committee, or its outside counsel as 
soon as the reason for the nondisclosure has abated, unless directed not to do so by the 
Commission staff, DOJ, or other relevant authorities.  If Statoil fails to make such 
disclosure within ten (10) calendar days of the report of such payments to Statoil’s 
Corporate Compliance Officer, to its Audit Committee, or to its outside counsel, Statoil 
shall allow the Compliance Consultant to independently disclose his/her findings to the 
staff of the Commission and DOJ at the addresses listed in paragraph VI.4.  Further, in 
the event that any Statoil entity or person, or any entity or person working directly or 
indirectly for Statoil, refuses to provide information necessary for the performance of the 
Compliance Consultant’s responsibilities, Statoil shall require the Compliance Consultant 
to disclose that fact to the Commission staff and to DOJ.  Statoil shall not take any action 
to retaliate against the Compliance Consultant for such disclosures.  The Compliance 
Consultant is not precluded from reporting other criminal or regulatory violations 
discovered in the course of performing his or her duties, in the same manner as described 
above.    

9. It is understood that no provision of this Order is intended to, or can, 
prejudice or otherwise affect Norway’s jurisdiction and right to enforce within Norway 
its relevant national laws and treaty obligations, nor shall any provision of this Order 
require Statoil to take any action that constitutes a breach of Norwegian law. 

10. Statoil shall require the Compliance Consultant to enter into an agreement 
with Statoil that provides that for the period of engagement and for a period of two years 
from completion of the engagement, the Compliance Consultant shall not enter into any 
additional employment, consultant, attorney-client, auditing or other professional 
relationship with Statoil, or any of its present or former affiliates, directors, officers, 
employees, or agents acting in their capacity.  The agreement will also provide that the 
Compliance Consultant will require that any firm with which he or she is affiliated or of 
which he or she is a member, and any person engaged to assist the Compliance 
Consultant in performance of his or her duties under this Order shall not, without prior 
written consent of the Securities and Exchange Commission’s Division of Enforcement, 
enter into any employment, consultant, attorney-client, auditing or other professional 

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relationship with Statoil, or any of its present or former affiliates, directors, officers, 
employees, or agents acting in their capacity as such for the period of the engagement and 
for a period of two years after the engagement.  To ensure the independence of the 
Compliance Consultant, Statoil shall not have the authority to terminate the Compliance 
Consultant without the prior written approval of the Commission staff and the DOJ.   

VII. 
 

In view of the foregoing, the Commission deems it appropriate to impose the 
sanctions agreed to in Respondent Statoil’s Offer. 
 

Accordingly, it is hereby ORDERED that:  
 

i. Respondent Statoil cease and desist from committing or causing any 
violations and any future violations of Exchange Act Sections 30A,  
13(b)(2)(A), 13(b)(2)(B), 13(b)(5), and Rule 13b2-1 thereunder;  

 
ii. Respondent Statoil comply with the undertakings enumerated in Section VI. 

above; and  
 

iii. Respondent Statoil, within ten days of the entry of this Order, pay 
disgorgement of $10,500,000 to the United States Treasury.  Such 
payment shall be: (A) made by United States postal money order, certified 
check, bank cashier's check or bank money order; (B) made payable to the 
Securities and Exchange Commission; (C) hand-delivered or mailed to the 
Office of Financial Management, Securities and Exchange Commission, 
Operations Center, 6432 General Green Way, Alexandria, Stop 0-3, VA 
22312; and (D) submitted under cover letter that identifies Statoil as a 
Respondent in these proceedings and the file number of these proceedings, 
a copy of which cover letter and money order or check shall be sent to 
Helene T. Glotzer, Associate Director, Northeast Regional Office, 
Securities and Exchange Commission, 3 World Financial Center, Suite 
4300, New York, NY 10281. 

 
 By the Commission. 
 
       Nancy M. Morris 
       Secretary 
 

 12


	 
	In the Matter of 
	 
	STATOIL, ASA,  
	 
	Respondent.

UNITED STATES OF AMERICA 

Before the  
SECURITIES AND EXCHANGE COMMISSION 

 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 54599 / October 13, 2006 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-12453 
 
 
In the Matter of 
 

STATOIL, ASA,  
 
Respondent. 
 
 

 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS, MAKING 
FINDINGS, AND IMPOSING A 
CEASE-AND-DESIST ORDER 
PURSUANT TO SECTION 21C OF 
THE SECURITIES EXCHANGE ACT 
OF 1934  

 
 

I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate 
that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C 
of the Securities Exchange Act of 1934 (“Exchange Act”), against Statoil, ASA (“Statoil” 
or the “Respondent”). 
 

II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted 
an Offer of Settlement (the “Offer”) which the Commission has determined to accept.  
Solely for the purpose of these proceedings and any other proceedings brought by or on 
behalf of the Commission, or to which the Commission is a party, and without admitting 
or denying the findings herein, except as to the Commission’s jurisdiction over the 
Respondent and the subject matter of these proceedings, which are admitted, Respondent 
consents to the entry of this Order Instituting Cease-and-Desist Proceedings, Making 
Findings, and Imposing a Cease-and-Desist Order Pursuant to Section 21C of the 
Securities Exchange Act of 1934 (“Order”), as set forth below.   

 
 
 
 
 
 
 



 

III. 
FACTS 

 
 On the basis of this Order and the Respondent’s Offer, the Commission finds1 
that: 

 
Summary

  
1. In June 2002 and January 2003, Statoil paid bribes to an Iranian 

government official (the “Iranian Official”) in order for him to use his influence to: (i) 
assist Statoil in obtaining a contract to develop three phases of the South Pars oil and gas 
field in Iran (the “South Pars Project”) and (ii) open doors to additional projects in the 
Iranian oil and gas exploration industry.  The Iranian Official was the head of the Iranian 
Fuel Consumption Optimizing Organization (“IFCOO”), a subsidiary of the National 
Iranian Oil Company (“NIOC”).  Statoil agreed to pay the Iranian Official through a 
consulting contract (the “Contract”) with an intermediary company (the “Consulting 
Company”) organized in the Turks and Caicos Islands and nominally owned by a third 
party located in London, England.  The Contract obligated Statoil to make initial 
payments of $200,000 and $5 million, and ten subsequent annual payments of $1 million 
each.  In October 2002, Statoil obtained the contract to develop the South Pars Project.  
Statoil made the initial payments to the Iranian Official, but in June 2003, Statoil 
suspended payments under the Contract.  On September 6, 2003, the Contract was 
publicly disclosed in the Norwegian press.  On September 10, 2003, Statoil terminated 
the Contract.  The next day, the Norwegian authorities announced an investigation into 
the Contract.  During the relevant time period, Statoil employees circumvented Statoil’s 
internal controls and procedures that were in place to prevent illegal payments, and 
Statoil lacked sufficient internal controls.  In addition, by mischaracterizing the payments 
as legitimate consulting fees, Statoil violated the books and records provisions of the 
federal securities laws.   
 

Respondent 
 

2.  Statoil is a public company organized under the laws of the Kingdom of 
Norway and headquartered in Stavanger, Norway.  Statoil explores for and develops oil 
and gas resources around the globe, and has American Depositary Shares that trade under 
the symbol STO on the New York Stock Exchange and are registered pursuant to Section 
12(b) of the Exchange Act (15 U.S.C. § 781(g)).  Statoil is required to file reports with 
the Commission under Section 13 of the Exchange Act (15 U.S.C. § 78m), and is an 
“issuer” within the meaning of the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. § 
78dd-1. 
 
 

                                                 
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and 
are not binding on any other person or entity in this or any other proceeding.  

 2



 

 
Background 

 
3. Statoil is an international oil and gas company involved primarily in the 

exploration for, development, production, and sale of oil and natural gas from the 
Norwegian Continental Shelf and elsewhere.  In late 2000 and early 2001, under its former 
Chief Executive Officer (“CEO”), Statoil was pursuing opportunities to expand its business 
internationally.  At that time, Statoil held participation interests in several exploration and 
production licenses outside of Norway, but held only a few small operatorships outside of 
Norway.  In the fall of 2000, Statoil hired a new senior executive to direct Statoil’s 
International Exploration and Production Department (“Senior Executive”), who reported 
directly to the CEO. 

 
4. Statoil identified Iran as a country to focus on to secure operatorships.  

The Iranian Ministry of Oil, through NIOC and various wholly-owned companies, 
controls the rights to develop the oil and gas resources of Iran.  In November 2000, 
Statoil and NIOC entered into a Cooperation Agreement, which identified areas of 
mutual interest for future cooperation between Statoil and NIOC.  
  

5.         In the spring of 2001, certain Statoil employees in Iran accepted an 
invitation from one of the Iranian Official’s relatives to meet with the Iranian Official.  
These Statoil employees learned that the Iranian Official’s father was a former president 
of Iran who led the Expediency Council, a body that mediated between the politically-
elected and the clerically-controlled parts of Iran’s government.  After meeting with the 
Iranian Official, Statoil tested and assessed the Iranian Official’s influence by, among 
other things, having the Iranian Official send a message back to Statoil through the 
Iranian Oil Minister.  A Statoil employee described the test as demonstrating that the 
Iranian Official was “powerful” and was the “link” to opportunities to obtain business in 
Iran.  After the initial contacts, Statoil determined that the Iranian Official was an advisor 
to the Oil Minister, and that the Iranian Official’s family was powerful and highly 
influential in the oil and gas business in Iran.  At the time Statoil employees made contact 
with the Iranian Official, Statoil employees knew of publicly reported accusations of 
corruption against the Iranian Official’s family, but did not perform any due diligence to 
investigate the accusations.   

 
6. In August 2001, the Iranian Official visited Statoil’s facilities in 

Stavanger, Norway, and met with senior Statoil employees, including a chief adviser to 
the CEO, the Senior Executive, and a senior employee in Statoil’s International 
Exploration and Production Department who had direct responsibility for Statoil’s 
activities in Iran (the “E & P Executive”).  The Iranian Official’s position and influence 
were well known to Statoil management participating in this meeting.  The written 
agenda for the visit referred to the Iranian Official as “President NIOC, Iranian Fuel 
Cons. Org.”  The Iranian Official was also described in internal Statoil documents as an 
“advisor[] to the Iranian Oil Minister” and a “very important guest[].”  At the time, 
internal Statoil memoranda described the Iranian Official’s family as “control[ling] all 
contract awards within oil and gas in Iran.” 

 3



 

 
The Bribery 

 
7. In the second half of 2001 and into 2002, the Senior Executive discussed 

with Statoil’s CEO the possibility of entering into a consulting contract to arrange 
payments to the Iranian Official, and began negotiating the terms with the Iranian 
Official.  In November 2001, Iranian authorities proposed that Statoil consider seeking a 
participation interest in a subcontract to develop the South Pars Project, under a contract 
awarded to an Iranian oil and gas development company (the “Development Company”) 
that was indirectly owned and controlled by the Iranian Ministry of Oil.      

 
8. In December 2001, the Iranian Official sent a sample consulting contract 

and payment proposal to the Senior Executive, which the Iranian Official represented had 
previously been used in his dealings with other multinational oil companies.  In January 
2002, the Senior Executive provided the CEO with a memorandum that described a 
proposal from the Iranian Official that would have required Statoil to (i) pay a “success 
fee” payable upon Statoil’s being awarded a participation interest in the development of 
the South Pars Project; (ii) provide money for “charities” of the Iranian Official’s choice; 
and (iii) make payments through an offshore company.  

   
 9. Although the CEO objected to the Iranian Official’s proposal, the CEO 
ultimately approved Statoil’s entering into a contract with the Iranian Official in the total 
amount of $15.2 million to be paid over approximately 11 years.  The final Contract was 
structured as a payment for vaguely-defined consulting services through a third-party 
offshore company.  The Iranian Official was not named in the Contract because disclosing 
Statoil’s relationship with the Iranian Official could likely jeopardize Statoil’s ability to 
obtain business in Iran.   
 
 10. In return for the payments, the Iranian Official used his influence to assist 
Statoil in obtaining business in Iran.  For example, the Iranian Official (i) provided Statoil 
employees in Iran nonpublic information concerning oil and gas projects in Iran and (ii) 
showed Statoil copies of bid documents of competing companies that Statoil could not 
access through appropriate channels.  
 
 11. On May 15, 2002, Statoil and the Development Company entered into an 
agreement in principle that provided the central terms for Statoil’s participation in the 
offshore portion of the Development Company’s contract for the South Pars Project.  At 
that time, it was contemplated that the contract for the South Pars Project would be 
finalized by June 15, 2002, although several issues remained to be negotiated. 
  

12. On June 12, 2002, the E & P Executive, acting on a power of attorney from 
the CEO, signed the Contract on behalf of Statoil.  When Statoil signed the Contract, the 
Senior Executive believed that Statoil would be awarded a participation interest in the 
development of the South Pars Project.  Statoil and the Development Company signed a 
Participation Agreement in October 2002, which Statoil expected would yield millions of 
dollars in profit. 

 4



 

 
13. In late June 2002, Statoil received an invoice from the Consulting 

Company instructing it to pay $200,000 under the terms of the Contract, and instructing 
that the money be routed through a United States bank in New York, New York to a bank 
account in Switzerland held by a company not named in the Contract.  Statoil made the 
payment on June 26, 2002, according to the instructions in the invoice.  In December 
2002, Statoil received a second invoice from the Consulting Company instructing it to 
pay $5 million, with payment instructions identical to those in the June 2002 invoice.  On 
January 15, 2003, Statoil paid $5 million pursuant to the instructions in the invoice.   

 
14. Statoil violated the anti-bribery provisions of the federal securities laws 

contained in the Foreign Corrupt Practices Act when it arranged for the payments to the 
Iranian Official.  The payments were intended to (i) induce the Iranian Official to use his 
influence with NIOC; (ii) influence NIOC’s decision about whether to award Statoil a 
participation interest in the development of the South Pars Project that would net Statoil 
several millions of dollars; and (iii) secure improper advantage for Statoil by positioning 
it to obtain future business in Iran, potentially worth hundreds of millions of dollars.   
 

Books and Records Violations 
 
 15. Statoil failed to properly account for the illegal payments and failed to 
accurately describe the Contract in its books and records.  Instead, Statoil improperly 
characterized the payments it made as legitimate payments for “consulting fees for 
special consultants and analyses relating to technical, administrative, tax, and financial 
matters…,” and improperly characterized the Contract as an ordinary consulting 
agreement. 
 

Internal Controls Violations 
 
 16. In entering into the Contract, certain Statoil management responsible for 
the Contract circumvented Statoil’s internal controls designed to prevent illegal 
payments.  They concealed the Contract’s true nature and true parties, and violated Statoil’s 
procurement policies by directing that the Contract should be entered into and that payments 
be made under the Contract to parties not named in the Contract.  Statoil management 
responsible for the Contract performed no due diligence concerning the named or unnamed 
parties to the Contract.  Statoil had inadequate systems for review of the Contract and lacked 
controls sufficient to provide reasonable assurances that the Contract complied with 
applicable laws.  Statoil’s lack of sufficient internal controls enabled executives responsible 
for the Contract to conceal the illegal payments to the Iranian Official.   
 

Statoil’s Response and Recent Events 
  
 17. In late March 2003, Statoil’s internal audit department reported to Statoil’s 
Chief Financial Officer (“CFO”) that Statoil had paid $5.2 million under a consulting 
agreement to an entity that had not been named in the Contract.  In compliance with 
Statoil’s internal procedures, and at the direction of the CFO and head of internal audit, 

 5



 

Statoil’s security group began an inquiry into the Contract.  As part of its inquiry, the 
security group determined that even though he was not named in the Contract, the Iranian 
Official was the “consultant” under the Contract, and confirmed his position and family 
ties in Iran.  In early June 2003, the security group prepared an “internal investigative 
report” which concluded that there was “a strong indication of the consultant being 
involved in corrupt-like practices,” and that by entering into the Contract, Statoil may 
have violated Norwegian and U.S. anti-bribery laws.   
 
 18. In spite of the security group’s troubling report, Statoil’s senior 
management failed to take appropriate action to address the Contract and Statoil’s 
relationship with the Iranian Official.  On June 5, 2003, the security group and Statoil’s 
chief internal auditor presented their findings to Statoil’s then-Chairman of the Board, 
who, instead of taking up the matter, told them that the matter should be investigated 
further and taken up by the CEO.  Later in June 2003, the security group presented its 
findings to the CEO, recommending that no more payments be made under the Contract 
and that the Contract be terminated.  The CEO agreed to suspend payments under the 
Contract, but the CEO refused to terminate the Contract or to address further the principal 
concerns of the security group. 
 
 19. On September 6, 2003, the Contract was disclosed in the Norwegian press 
and on September 10, 2003, Statoil terminated the Contract, while Statoil’s internal audit 
and security group divisions were still working to finalize a letter to the Board of 
Directors addressing the Contract.  After the Contract’s existence became public 
knowledge, the Senior Executive and the Chairman of the Board resigned.  As a 
consequence of Statoil’s Board of Directors expressing no confidence in him, the CEO 
also resigned. 
 
 20. On September 23, 2003, the Commission staff contacted Statoil to inform 
Statoil of the staff’s inquiry.  Since then, Statoil has cooperated with the staff’s 
investigation, producing all documents and information that the staff requested, including 
voluntary production of documents protected by the attorney-client privilege pursuant to 
a non-waiver agreement and early production and identification to the staff of relevant 
documents.  Statoil also agreed to make employees available for interviews and 
encouraged employee cooperation by agreeing to pay travel expenses and attorneys’ fees.   
Statoil’s Board of Directors has taken remedial actions, including retaining outside 
counsel to conduct an investigation of the Contract, and a separate investigation into 
other non-Norwegian contracts, the results of which were provided to the staff.  Statoil 
has also designed and is implementing a remedial plan, which includes (i) the creation of 
a corporate compliance officer and ethics committees, (ii) expanded roles for Statoil’s 
Audit Committee to oversee compliance with the FCPA and other applicable foreign 
bribery laws, (iii) new reporting lines directly to the Audit Committee and Board of 
Directors, (iv) new ethics, procurement, and due diligence policies, (v) enhanced 
programs for educating and training executives and employees on ethical matters, 
including FCPA/anti-bribery compliance training, and (vi) an ethical help-line operated 
by a third-party, which provides anonymity for callers.   

   

 6



 

Norwegian Authorities’ Actions
 

21. On September 11, 2003, Norwegian government authorities from the 
National Authority for Investigation and Prosecution of Economic and Environmental 
Crime (“Økokrim”) seized documents from Statoil’s offices as part of an investigation of 
Statoil.  On June 29, 2004, following its investigation, Økokrim issued penalty notices to 
Statoil in the amount of approximately $3 million and to the Senior Executive in the 
amount of approximately $30,000, charging them with violating Norway’s trading-in-
influence statute.  Statoil and the Senior Executive agreed to pay the penalties without 
admitting or denying the violations. 

 
IV. 

FEDERAL SECURITIES LAW VIOLATIONS 
 
 1. As a result of the conduct described above, Statoil violated Section 30A of 
the Exchange Act, which prohibits any issuer with a class of securities registered pursuant to 
Section 12 of the Exchange Act, in order to obtain or retain business, from giving, or 
authorizing the giving of, anything of value to any foreign official for purposes of 
influencing the official or inducing the official to act in violation of his or her lawful duties, 
or to secure any improper advantage; or to induce a foreign official to use his influence with 
a foreign government or foreign governmental instrumentality to influence any act or 
decision of such government or instrumentality.    
 
 2. As a result of the conduct described above, Statoil violated Section 
13(b)(2)(A) of the Exchange Act, which requires reporting companies to make and keep 
books, records, and accounts, which, in reasonable detail, accurately and fairly reflect their 
transactions and disposition of their assets. 

3. As a result of the conduct described above, Statoil violated Section 
13(b)(2)(B) of the Exchange Act, which requires all reporting companies to devise and 
maintain a system of internal accounting controls sufficient to provide reasonable 
assurances that transactions are recorded in accordance with management’s general or 
specific authorization; transactions are recorded as necessary to permit preparation of 
financial statements in conformity with generally accepted accounting principles or any 
other criteria applicable to such statements, and to maintain accountability for assets; 
access to assets is permitted only in accordance with management’s general or specific 
authorization; and the recorded accountability for assets is compared with the existing 
assets at reasonable intervals and appropriate action is taken with respect to any 
differences. 

4. As a result of the conduct described above, Statoil violated Section 
13(b)(5) of the Exchange Act, which prohibits any person or company from knowingly 
circumventing or knowingly failing to implement a system of internal accounting 
controls as described in Section 13(b)(2)(B), or knowingly falsifying any book, record, or 
account as described in Section 13(b)(2)(A). 

 7



 

5. As a result of the conduct described above, Statoil violated Rule 13b2-1 of 
the Exchange Act, which prohibits any person or company from, directly or indirectly, 
falsifying or causing to be falsified, any book, record or account subject to Section 
13(b)(2)(A). 

V. 
 
 In determining to accept the Offer, the Commission considered remedial acts 
undertaken by the Respondent and cooperation afforded the Commission staff. 

 
VI. 

UNDERTAKINGS 
 

 Respondent undertakes to:  
 
 1. Retain, through its Board of Directors, within sixty (60) calendar days of the 
issuance of this Order, and for a period of three years from the date of retention, an 
independent compliance consultant (“Compliance Consultant”), not unacceptable to the staff 
of the Commission, to review and evaluate Statoil’s internal controls, record-keeping, and 
financial reporting policies and procedures as they relate to Statoil’s compliance with  the 
books and records, internal accounting controls, and anti-bribery provisions of the FCPA, 
codified at Sections 13(b)(2)(A), 13(b)(2)(B), and 30A of the Exchange Act.  This review 
and evaluation shall include an assessment of those policies and procedures as actually 
implemented in practice.  The compensation and expenses of the Compliance Consultant, 
and of the persons hired under his or her authority, shall be paid by Statoil.  Statoil may 
extend the time period for retention of the Compliance Consultant with prior written 
approval of the Commission staff. 
 
 2. Statoil shall cooperate fully with the Compliance Consultant.  The 
Compliance Consultant shall have the authority to take such reasonable steps, in the 
Compliance Consultant’s view, as necessary to be fully informed about the operations of 
Statoil within the scope of his or her responsibilities under this Order.  To that end, Statoil 
shall provide the Compliance Consultant with access to files, books, records, and personnel 
that fall within the scope of his or her responsibilities under this Order, provided that Statoil 
shall not be obligated to provide the Compliance Consultant with files, books and records 
that are protected by the attorney-client privilege or work product doctrine and that are not 
the subject of a non-waiver of privilege agreement with the Commission.  However, if the 
Compliance Consultant requests access to materials or information that Statoil reasonably 
believes to be protected by the attorney client  privilege or the work product doctrine, 
Statoil shall in good faith consider that request, and shall consider whether providing 
access would assist the Compliance Consultant in performing his or her duties.  It shall be 
a condition of the Compliance Consultant’s retention that the Compliance Consultant is 
independent of Statoil and that no attorney-client relationship shall be formed between them.   
    

3. Statoil shall require the Compliance Consultant to assess whether Statoil’s 
policies and procedures are reasonably designed to detect and prevent violations of the 

 8



 

FCPA, and during the three-year consultancy, Statoil shall require the Compliance 
Consultant to conduct an initial review and prepare an initial report, followed by two 
follow-up reviews and follow-up reports as described below.  With respect to each of the 
three reviews, after initial consultations with Statoil, the United States Department of 
Justice (“DOJ”), and the Commission staff, Statoil shall require the Compliance 
Consultant to prepare a written work plan for each of the three reviews, which shall be 
submitted to Statoil, the Commission staff, and DOJ.  Statoil shall require 
the Compliance Consultant to submit the same work plan to the Commission staff 
and DOJ, and the work plan as finally adopted by the Compliance Consultant shall be the 
same for both agencies.  In order to conduct an effective initial review and to fully 
understand any existing deficiencies in controls, policies, and procedures related to the 
FCPA, the Compliance Consultant’s initial work plan shall include such steps as are 
necessary to develop an understanding of the facts and circumstances surrounding the 
violations described above in Section III.  As a condition of the Compliance Consultant’s 
retention by Statoil, the Compliance Consultant shall agree to maintain the confidentiality 
of Statoil’s trade secrets and other confidential business information in conformity with 
Norwegian law, and to give due consideration to Statoil’s need for operational flexibility 
and preservation of business relationships with third parties, provided that nothing in this 
paragraph shall preclude the Compliance Consultant from sharing such confidential 
information with the Commission staff and DOJ.   

4. In connection with the initial review, Statoil shall require the Compliance 
Consultant to issue a written report, within one hundred twenty (120) calendar days after 
being retained, setting forth the Compliance Consultant’s assessment and making 
recommendations reasonably designed to improve Statoil’s program, policies, and 
procedures for ensuring compliance with the FCPA.  Statoil shall require that the 
Compliance Consultant provide the report to Statoil’s Board of Directors and 
contemporaneously transmit a copy to the following individuals or their successors: (1) 
Bruce Karpati, Assistant Regional Director, Division of Enforcement, Securities and 
Exchange Commission, 3 World Financial Center, Room 4300, New York, NY 10281-
1022; (2) Deborah E. Landis, Assistant United States Attorney, 1 St. Andrews Plaza, 
New York, NY 10007; and (3) Mark F. Mendelsohn, Deputy Chief, Fraud Section, 
Criminal Division, U.S. Department of Justice, 10th and Constitution Ave., N.W. (Bond), 
Washington, D.C. 20530.  Statoil shall allow the Compliance Consultant to extend the 
time period for issuance of the report with prior written approval of the DOJ and the 
Commission staff.   

5.  Within one hundred twenty (120) calendar days after receiving the report, 
Statoil shall adopt all recommendations in the report of the Compliance Consultant; 
provided, however, that within one hundred twenty (120) calendar days after receiving 
the report, Statoil shall advise the Compliance Consultant and the Commission staff in 
writing of any recommendations that it considers to be unduly burdensome, impractical, 
costly, or contrary to Norwegian law. With respect to any recommendation that Statoil 
considers unduly burdensome, impractical, costly, or contrary to Norwegian law, Statoil 
need not adopt that recommendation within that time but shall propose in writing an 
alternative policy, procedure or system designed to achieve the same objective or 

 9



 

purpose.  As to any recommendation on which Statoil and the Compliance Consultant do 
not agree, such parties shall attempt in good faith to reach an agreement within sixty (60) 
calendar days after Statoil serves the written advice.  In the event Statoil and the 
Compliance Consultant are unable to agree on an alternative proposal, Statoil shall abide 
by the determinations of the Compliance Consultant, to the extent such proposal would 
not cause Statoil to violate Norwegian law.  With respect to any recommendation that the 
Compliance Consultant determines cannot reasonably be implemented within one 
hundred twenty (120) calendar days after receiving the report, Statoil shall allow the 
Compliance Consultant to extend the time period for implementation with prior written 
approval of the Commission staff and DOJ. 

6. Statoil shall require the Compliance Consultant to undertake two follow-
up reviews to determine whether Statoil’s policies and procedures are reasonably 
designed to detect and prevent violations of the FCPA.  Within one hundred twenty (120) 
calendar days of initiating each follow-up review, the Compliance Consultant (i) shall 
complete the review, (ii) certify whether Statoil’s anti-bribery compliance program, 
including its policies and procedures, is appropriately designed and implemented to 
ensure compliance with the FCPA, and (iii) report on the Compliance Consultant’s 
findings in the same fashion as set forth in paragraph VI.4 with respect to the initial 
review. Statoil shall adopt the follow-up recommendations in the same fashion as set 
forth in paragraph VI.5 with respect to the initial review.  The first follow-up review shall 
commence one year after retention of the Compliance Consultant, and the second follow-
up review shall commence at least one year after completion of the first follow-up 
review.  Statoil shall allow the Compliance Consultant to extend the time period for these 
follow-up reviews with prior written approval of the Commission staff and DOJ, 
provided that the tenure of the Compliance Consultant shall only exceed three years if 
Statoil has not fulfilled its responsibilities as described in this Undertakings section.      

7. In undertaking the reviews described in Paragraphs VI.1 through VI.6 
above, Statoil shall require the Compliance Consultant to formulate conclusions based on 
sufficient evidence obtained through, among other things, (i) inspection of documents, 
including, but not limited to, all of Statoil’s policies and procedures relating to Statoil’s 
anti-bribery compliance program; (ii) onsite observation of Statoil’s systems and 
procedures, including, but not limited to, Statoil’s internal controls, recordkeeping and 
internal audit procedures; (iii) meetings with and interviews of Statoil employees, 
officers, directors and any other relevant persons; and (iv) analyses, studies and testing of 
Statoil’s anti-bribery compliance program.   In undertaking such assessment and reviews, 
the Compliance Consultant, at his or her own discretion, may rely, to a reasonable extent 
and after reasonable inquiry, on reports, studies, and analyses issued or undertaken by 
other consultants hired by Statoil prior to the date of this Order. 

8. The Compliance Consultant’s charge, as described above, is to review 
Statoil’s controls, policies and procedures related to the compliance with the FCPA.  To 
the extent the Compliance Consultant, during the course of his or her assessment, 
discovers that corrupt payments or corrupt transfers of property or interests may have 
been offered, promised, paid, or authorized by any Statoil entity or person, or any entity 

 10



 

or person working directly or indirectly for Statoil, Statoil shall require the Compliance 
Consultant to promptly report such payments to Statoil’s Corporate Compliance Officer, 
to its Audit Committee, and to its outside counsel for further investigation.  If the 
Compliance Consultant refers the matter to Statoil’s Corporate Compliance Officer, its 
Audit Committee, and its outside counsel, Statoil shall promptly report the same to the 
Commission staff and DOJ at the addresses listed in paragraph VI.4.  If the Compliance 
Consultant reasonably concludes that disclosure to Statoil’s Corporate Compliance 
Officer, its Audit Committee, or its outside counsel would be inappropriate for any 
reason, the Compliance Consultant may limit such disclosure to any one or more of the 
foregoing parties.  If the Compliance Consultant reasonably concludes that disclosure to 
even one of the foregoing parties would be inappropriate for any reason, Statoil shall 
allow the Compliance Consultant to refer the matter directly to the Commission staff, 
DOJ, or Norwegian law enforcement officials or authorities.  In the event of such a direct 
referral, Statoil shall require the Compliance Consultant to make a similar disclosure to 
Statoil’s Corporate Compliance Officer, its Audit Committee, or its outside counsel as 
soon as the reason for the nondisclosure has abated, unless directed not to do so by the 
Commission staff, DOJ, or other relevant authorities.  If Statoil fails to make such 
disclosure within ten (10) calendar days of the report of such payments to Statoil’s 
Corporate Compliance Officer, to its Audit Committee, or to its outside counsel, Statoil 
shall allow the Compliance Consultant to independently disclose his/her findings to the 
staff of the Commission and DOJ at the addresses listed in paragraph VI.4.  Further, in 
the event that any Statoil entity or person, or any entity or person working directly or 
indirectly for Statoil, refuses to provide information necessary for the performance of the 
Compliance Consultant’s responsibilities, Statoil shall require the Compliance Consultant 
to disclose that fact to the Commission staff and to DOJ.  Statoil shall not take any action 
to retaliate against the Compliance Consultant for such disclosures.  The Compliance 
Consultant is not precluded from reporting other criminal or regulatory violations 
discovered in the course of performing his or her duties, in the same manner as described 
above.    

9. It is understood that no provision of this Order is intended to, or can, 
prejudice or otherwise affect Norway’s jurisdiction and right to enforce within Norway 
its relevant national laws and treaty obligations, nor shall any provision of this Order 
require Statoil to take any action that constitutes a breach of Norwegian law. 

10. Statoil shall require the Compliance Consultant to enter into an agreement 
with Statoil that provides that for the period of engagement and for a period of two years 
from completion of the engagement, the Compliance Consultant shall not enter into any 
additional employment, consultant, attorney-client, auditing or other professional 
relationship with Statoil, or any of its present or former affiliates, directors, officers, 
employees, or agents acting in their capacity.  The agreement will also provide that the 
Compliance Consultant will require that any firm with which he or she is affiliated or of 
which he or she is a member, and any person engaged to assist the Compliance 
Consultant in performance of his or her duties under this Order shall not, without prior 
written consent of the Securities and Exchange Commission’s Division of Enforcement, 
enter into any employment, consultant, attorney-client, auditing or other professional 

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relationship with Statoil, or any of its present or former affiliates, directors, officers, 
employees, or agents acting in their capacity as such for the period of the engagement and 
for a period of two years after the engagement.  To ensure the independence of the 
Compliance Consultant, Statoil shall not have the authority to terminate the Compliance 
Consultant without the prior written approval of the Commission staff and the DOJ.   

VII. 
 

In view of the foregoing, the Commission deems it appropriate to impose the 
sanctions agreed to in Respondent Statoil’s Offer. 
 

Accordingly, it is hereby ORDERED that:  
 

i. Respondent Statoil cease and desist from committing or causing any 
violations and any future violations of Exchange Act Sections 30A,  
13(b)(2)(A), 13(b)(2)(B), 13(b)(5), and Rule 13b2-1 thereunder;  

 
ii. Respondent Statoil comply with the undertakings enumerated in Section VI. 

above; and  
 

iii. Respondent Statoil, within ten days of the entry of this Order, pay 
disgorgement of $10,500,000 to the United States Treasury.  Such 
payment shall be: (A) made by United States postal money order, certified 
check, bank cashier's check or bank money order; (B) made payable to the 
Securities and Exchange Commission; (C) hand-delivered or mailed to the 
Office of Financial Management, Securities and Exchange Commission, 
Operations Center, 6432 General Green Way, Alexandria, Stop 0-3, VA 
22312; and (D) submitted under cover letter that identifies Statoil as a 
Respondent in these proceedings and the file number of these proceedings, 
a copy of which cover letter and money order or check shall be sent to 
Helene T. Glotzer, Associate Director, Northeast Regional Office, 
Securities and Exchange Commission, 3 World Financial Center, Suite 
4300, New York, NY 10281. 

 
 By the Commission. 
 
       Nancy M. Morris 
       Secretary 
 

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	In the Matter of 
	 
	STATOIL, ASA,  
	 
	Respondent.