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Wednesday, September 3, 2014
US independent Cobalt International Energy is now the serious subject of a US federal investigation into corrupt practices. The US Securities and Exchange Commission (SEC) notified Cobalt that it was going to pursue a case following a three-year investigation into possible breaches of the Foreign Corrupt Practices Act. The investigation revolves around the company’s activities in Angola and two Angolan firms partnered on its blocks.
In a recent regulatory filing Cobalt said that the ties to the two Angolan companies, Nazaki Oil and Gaz and Alper Oil, had been severed. Nazaki and Alper reportedly transferred their interests to Angola’s state-run firm Sonangol. Both Angolan firms were assigned by the government to be Cobalt’s partner when the company’s blocks were awarded in 2008.
Cobalt, following the transaction said it “no longer has any relationship with Nazaki or Alper.” According to Angola’s official gazette, Nazaki quit the project and Alper had been authorized to transfer its stake to Sonangol. No further details were offered.
The crux of the matter is that Manuel Vicente, head of Sonangol at the time of the award of Cobalt’s Angolan acreage, held a concealed stake in Nazaki. Another concealed owner in the company was General Manuel Helder Viera Dias Junior, head of the military bureau in the presidency. Alper’s owners are undisclosed.
Joseph Bryant, Cobalt’s chief executive and chairman, called the SEC’s move “erroneous” and the company denies any wrongdoing. Cobalt maintains that it was unaware of the officials’ concealed stakes at the time it agreed to go into business with Nazaki.
Under the terms of the contract for the project, Cobalt was obliged to fund a “free carry” for Alper’s 10% stake, meaning that Cobalt paid Alper’s share of development costs. Cobalt said in Wednesday’s filing that it would recoup its outlay on Alper’s free carry from Sonangol’s revenues once the project began pumping oil.
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