BP, Cobalt Angola Money Shows More Transparency Needed, NGO SaysNidaa Bakhsh
Global Witness, a group campaigning against corruption, said Angola’s use of payments by BP Plc and its partners for a project in the country shows the need to improve transparency in resource industries.
BP and partners including Cobalt International Energy Inc. agreed to contribute $350 million, in installments, to be used for a research and technology center, Global Witness said today in a statement, citing a Securities and Exchange Commission filing. The non-governmental organization said in a statement on its website that it was unable to gain information from BP, Cobalt or Angolan state oil company Sonangol confirming that the research center exists.
“A signature bonus was paid for interests in various new blocks,” BP said in an e-mailed response to Bloomberg queries on the oil deal. “Such payments ‘revert in full favor of the state.’ How Sonangol ultimately spends that money is the prerogative of the Angolan state. The money was paid directly to Sonangol with the state as ultimate beneficiary.”
Lynne Hackedorn, a spokeswoman at Cobalt International in Houston, the operator of the oil blocks, didn’t immediately respond to a voice message seeking comment. Mateus Cristovao, a spokesman in the Angolan capital of Luanda for Sonangol, said by phone today he couldn’t immediately comment on the report.
Cobalt International said separately today that the U.S. SEC made a preliminary determination for an enforcement action against the company. Cobalt received a Wells Notice from the SEC alleging violations of certain securities laws regarding its activities in Angola, the company said in a filing.
The company said it is cooperating with the SEC and believes its activities in Angola have complied with all laws.
Cobalt fell 9 percent to $14.53 by 11:32 a.m. in New York.
Global Witness is seeking U.S. transparency rules allowing the public to see how money from mineral resources is used.
“Many resource-rich countries including Angola are still failing to adequately disclose where billions of dollars are going from oil revenues paid by these companies,” Simon Taylor, director of Global Witness, said in the statement.
The NGO report comes as African heads of state meet President Barack Obama in Washington for the first U.S.-Africa Leaders Summit. Topics include corruption and womens’ rights.