Supply vessel tender round to be re-run

January 19, 2005, 00:30 CET

Hydro has decided to conduct a new round of invitations to tender for the procurement of supply vessels, and will therefore not sign the final charter agreement with Farstad Shipping. Hydro's internal auditors have uncovered flaws that may have influenced the evaluation of tenders received.

In June 2004 Hydro commenced a procurement process with the intention of chartering three supply ships for use in the company’s operations on the Norwegian Contintental Shelf.

A letter of intent was sent to Farstad Shipping on December 1, 2004. After allegations of irregularities relating to the procurement process, Hydro’s management determined that the procurement process would be subject to review by the company’s internal auditors.

Hydro’s internal auditors have disclosed breach of internal procurement procedures which means that the company cannot guarantee that all bidders have been treated equally. It was revealed that technical information was handled in conflict with Hydro’s procedures prior to tender opening. There is nothing to suggest that any individuals have profited personally from the irregularities.

"Due to the nature of the findings, we have decided to conduct a new round of invitations to tender so as to be absolutely sure that all bidders get equal and fair treatment. We will implement necessary measures to ensure that Hydro's procurement procedures are fulfilled and that the outside world has complete confidence in our procurement processes," said executive vice president Tore Torvund.

A new tender round will now be held and all bidders who participated in the first round will be invited to tender. Invitations to tender will be sent to bidders in a couple of months.

Gisle Johanson, Communication Manager
Hydro Oil & Energy
Tel.: +47 55995616, +47 41440050