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BP makes opaque payments for Angola oil block as petro-lobby seeks weak transparency rules

21st February 2012

Read the full BP Angola briefing

Read BP's Letter to Gavin Hayman, Campaigns Director at Global Witness

As oil industry lobbyists attempt to water down watershed transparency legislation in the United States and the European Union, Global Witness shows that BP has agreed to make multi-million dollar payments into obscure “social projects” controlled by the highly opaque state oil company of Angola as part of a deal to win oil exploration rights.  BP is making these payments despite well-documented concerns of corruption in the oil rich but poor African country.

The revelation emerges from U.S. corporate filings by one of BP’s partner companies, Cobalt International Energy. It shows that much more transparency is needed in the management of oil revenues in countries like Angola, where corruption is a serious risk. But U.S. and EU rules that could help to create such transparency are under pressure from the oil industry, including lobby groups of which BP is a supporter.

Angola has long had a legal requirement for oil companies to make upfront revenue payments in return for oil licences, partly for social investments. But Sonangol did not publish any information on the spending of social contributions from oil companies in its 2010 accounts.

Let’s not mince words about what’s happening here,” said Gavin Hayman, Campaigns Director of Global Witness. “BP is planning to pay large sums of money to a state oil company with a long history of opacity, which could be spent with little public oversight in one of the poorest and most corrupt countries in the world. And at the same time, BP and other oil companies are lobbying to water down laws in the U.S and Europe which are actually meant to improve transparency for investors and citizens in countries like Angola.”

Global Witness is putting forward a series of recommendations:

  • BP and other international oil companies should stop trying to water down transparency laws in their home jurisdictions, for example by ceasing to argue for exemptions from reporting for particular countries (such as Angola).
  • US and EU transparency laws should ensure that companies disclose their payments for each contract or licence that they sign in countries like Angola.
  • Oil companies should insist that any payments they make in Angola should be promptly transferred to the national treasury and fully disclosed in audited government accounts.
  • Angola’s government should commission and publish a full independent audit report of all Sonangol’s spending and business activities, including the $35 billion discrepancy in the national accounts which was identified by the IMF. This report should identify any corruption risks and propose measures to deal with them.

For further details, contact: Diarmid O’Sullivan at dosullivan@globalwitness.org or + 44 207 492 5863 or Judith Poultney at jpoultney@globalwitness.org +44 207 492 5849