NORWAY – Petroleum Fund has withdrawn NOK337m (€42.8m) from US chemicals group Kerr-McGee Corp. – for potentially “undermining the UN peace process” in Morocco.

The move was at the behest of the Norwegian ministry of finance, which conducted an ethical probe into the investment.

At issue is an oil exploration deal the company has signed with Moroccan state-owned oil company ONAREP for the continental shelf off shore Western Sahara, which Morocco has occupied despite UN condemnation. Oklahoma City-based Kerr-McGee says it has the appropriate permissions.

The fund started looking at Kerr-McGee last December at the request of the exiled government of the Saharawi Arab Democratic Republic and the Western Sahara Support Committee.

Following the application, the Norwegian ministry of finance asked that its Advisory Council to make an ethical assessment.

The council found Kerr-McGee’s exploration inconsistent with the Petroleum Fund’s ethical guidelines because it “most likely will enable Morocco to exploit petroleum resources in the area” and last 12 April recommended Kerr-McGee’s exclusion.

“Obtaining and verifying information on all aspects of companies’ activities is an exacting task. Decisions to exclude companies must be well substantiated,” commented finance minister Per-Christian Foss.

“The Council regarded this as ‘a particularly serious violation of fundamental ethical norms’ because it may strengthen Morocco’s sovereignty claims and thus contribute to undermining the UN peace process,” the ministry said in an official statement.

Kerr-McGee spokesman John Christiansen told IPE that the company obtained the permit in October 2001 and the following year the UN undersecretary for legal affairs confirmed the permit, which is due to expire in October.

Christiansen said the company’s activities did not prejudice the ongoing UN efforts.

Next on the Advisory Council’s checklist is TotalFinaElf’s activities in Burma.