Word: statoilhydro
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Dates: during 2007-2007
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...week wasn't all sweet. Between the creation of StatoilHydro, as the company is known for now (the firm is still mulling over a permanent name change), and the royal ceremony, Reiten was generating headlines of his own. On the day of the merger, StatoilHydro announced it had launched a probe into the legality of approximately $7 million in consultancy fees and expenses Hydro paid as part of its oil operations in Libya. Although it has not disclosed the name of the consultancy Hydro paid or what laws it might have broken, StatoilHydro said the payments came to light during...
Quite an understatement. But for all the embarrassment of Reiten's early exit, StatoilHydro faces challenges that will linger long after this hubbub is over. StatoilHydro is operating in a market that has changed drastically since oil was first struck off the coast of Norway in the late 1960s. After waves of mergers in the U.S. and Europe, and with the growing dominance of nationally owned energy companies worldwide, the oil and gas industry is increasingly ruled by a handful of giants. Though StatoilHydro leads the world in offshore extraction, it's dwarfed by diversified behemoths like BP, Exxon-Mobil...
...million six years ago, says John Olaisen, Oslo-based energy analyst at Carnegie, a Nordic investment bank. For Helge Lund, 44, formerly CEO of Statoil and now chief of the combined company, the message couldn't be clearer: "If we're going to grow the company," he says at StatoilHydro's office in Oslo, "we have to grow outside Norway...
...outside Norway, the competition is fierce. As the world's demand for energy swells, petroleum-pumping countries like Russia and Venezuela "are asserting a higher degree of national control over [oil and gas] developments and leaving less room for non-national companies to participate," says Peter Mellbye, StatoilHydro's head of international exploration and production. While key Middle Eastern nations have long held their domestic oil companies and development projects in a tight grip, a more protectionist stance among energy powers elsewhere has, Mellbye says, "fundamentally changed the picture...
...authorities and then on that basis they could make a choice," he says. "But that was never done." The two companies began negotiations late last year, and when in December they brought their merger proposal to the government it was quickly approved. (The government owns about two-thirds of StatoilHydro.) Now that the two firms are one, says Mellbye, foreign partners will know that Norway's political support for the company's participation is unconflicted...