The U.S. State Department in July said it placed the actions of Statoil in Iran under review for possible violations under the Iran Sanctions Act, which established a cap on investment in the Iranian energy sector.
In an announcement Friday, Statoil said it "will not make any new investments in Iran at this time," The Financial Times reported.
"We have been evaluating our investment decisions and, having informed the authorities in Norway and the European Union and discussed the issue with the U.S., our view is that this position is in the best interests of shareholders and the company," Statoil chief Helge Lund said Thursday.
StatoilHydro was formed by the 2007 merger of Statoil and Norsk Hydro. Statoil had expressed interest in developing the Azar oil field in the Anaran block in western Iran.
Lund also suggested Statoil would withdraw from Iran's South Pars natural gas field by yielding control to the National Iranian Oil Co. sometime in 2009, The Times said.
The move follows an earlier decision by French Total and Royal Dutch Shell. Statoil has expressed interest in moving into U.S. markets, particularly the Gulf of Mexico.