DPI is not involved in corruption in Peru

When Discover Petroleum's subsidiary company DPI was drawn into a very serious case of corruption in Peru at the beginning of October, Discover Petroleum's board of directors hired Ernst & Young immediately to do a review all company payments and transactions related to the company's Peruvian engagements. Since then, a large team from Ernst & Young has been working in Norway and Peru, undertaking extensive investigations and doing many interviews in both countries. The company reviewed a large number of contracts, disbursements, reports and hundreds of e-mails. The company delivered its report on the 26th of November.

The report has been subjected to a legal evaluation by Bjørn Stordrange at the law firm of Steenstrup Stordrange. This review confirmed that no punishable conditions were found in Ernst & Young's report.

Ernst & Young's report states that:

• No direct disbursements were found made to any PeruPetro representatives, PetroPeru itself or other Peruvian public servants

• Expenses DPI had establishing its company in Peru seem to have been reasonable relative to work documented and carried out

• Demands to pay a success fee have been directed at DPI on numerous occasions, before and after oil permits were issued. Written documentation exists showing that such demands were rejected by DPI, and a review of payments made has not identified any such transactions

• Disbursements were made founded on contractual considerations and demands substantiated by Invoices

"This report has proven and documented the basic course of events such as DPI has described them in press releases sent out prior to the Ernst & Young investigation. Discover Petroleum is satisfied that the board understands DPI was undeservedly drawn into this case. The opportunity seemed exciting, and we could enter with a cheap admission ticket if acted fast enough. In retrospect, we see that we should have used more time to assess our involvements here," Wennesland said.

"Where the pre-qualification process and awarding of permits was concerned, an assessment of these processes had to be done at an executive level. The board is nevertheless satisfied that Ernst & Young were able to bring forth the facts from Peru which proves DPI's low scores in the pre-qualification rounds were not formally exclusionary to further participation in the bidding process, such as was claimed in Peru. We are also happy PetroPeru has confirmed its need to have a collaborator with technological expertise to participate in the bidding process and that the cooperation here was real and positive for both parties," Wennesland said.

"DPI kept Økokrim (Norway's special economic crime unit), the Ministry of Foreign Affairs, the Ministry of Petroleum & Energy, the former Ministry of Development Cooperation and the Norwegian Embassy in Chile informed during the case. All these agencies will now be sent a copy of the report," Wennesland informed.

"The company has as yet heard nothing from Peruvian authorities concerning the much-publicized charges made against Jostein Kjerstad, DPI's chairman of the board. We have a very difficult time understanding such a charge, considering this report's verification of what really happened. DPI has now established an open and constructive dialogue with the Peruvian Embassy in Stockholm, and we hope that this case can be concluded as quickly as possible, also in Peru," said Wennesland.