From: <a href="http://www.aftenposten.no/spesial/wikileaksdokumenter/article3959885.ece">Aftenposten</a>.<br>
Appeared one day later, but without date, in
<a href="http://www.aftenposten.no/spesial/wikileaksdokumenter/article3966836.ece">Aftenposten</a>.<br>
Date: 19/04/2007

<pre>
C O N F I D E N T I A L OSLO 000401
SIPDIS
SIPDIS
STATE FOR EUR/NB, ISN, EB, NEA, IO, VCI, P, T TREASURY FOR TFI
E.O. 12958:
DECL: 04/19/2017
TAGS: PREL, ENRG, EPET, ETTC, EFIN, KNNP, IR, NO
SUBJECT: AMBASSADOR RAISES IRAN SANCTIONS ACT CONCERNS WITH STATOIL CEO
REF: A) STATE 46220 B) STATE 14071 C) STATE 10650 D) OSLO 162 AND PREVIOUS 

Classified By: Charge d´Affaires Kevin M. Johnson for reasons 1.4 b and d.

1. (C)
The Ambassador raised USG concerns over Norwegian petroleum
firms´ investments in Iran with Statoil CEO Helge Lund over
lunch on April 13. Although Statoil is not considering
expanding its limited investments in Iran and has had a
troubled history there (Lund´s predecessor was forced out in
an Iranian bribery scandal), Lund stands to inherit
responsibility for an expanded Iranian portfolio once a merger
with Norway´s second leading petroleum firm, Norsk Hydro, is
consummated. Hydro is much more actively engaged in Iran, and
the Ambassador and Embassy officers have repeatedly conveyed
USG and Iran Sanctions Act concerns to top Hydro executives
(ref D). Washington officials also recently raised the issue
directly with visiting Hydro executives (ref A).

2. (C)
Lund told the Ambassador he is legally constrained from
discussing substantive business and investment issues with
Hydro CEO Eivind Reiten while European Union and other
competition authorities review the proposed Statoil-Hydro
merger. He could not, therefore, comment directly on Hydro´s
investments in Iran and the merged company´s possible position
on them. Lund did acknowledge that he would eventually be
responsible to the merged company´s Board and shareholders for
Iran and other investments, and that he would take USG
positions into account. He added that as a general matter he
thought engagement rather than sanctions is a more effective
strategy to bring about change, but he recognized, without
naming Iran specifically, that "there are exceptions to that."

3. (C)
Lund did offer assurances that Statoil had no intention of
expanding its own projects in Iran. Statoil´s focus is "only
to complete the South Pars project," said Lund. That in itself
was a major challenge, as the project has been plagued by
delays, unreliable local partners, and other problems. He
implied that Statoil´s Iran investments had been nothing but a
headache, having had a "huge impact" on Statoil´s finances
and, alluding to the bribery scandal, its management
structure. He added confidentially that Statoil is conducting
a low profile, but insincere, dialogue with Iranian
authorities on future projects to forestall potentially
hostile actions against its current investments. Lund
justified the move by saying the company owed its shareholders
a duty to protect what remained of its Iranian investments as
best it could. He concluded that Statoil has had and would
continue a frank and transparent dialogue with USG authorities
on the Iran issue. "There will be no surprises on our part,"
concluded Lund.

JOHNSON
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