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FT sheds further light on opaque dealings in Angolan oil sector

18th April 2012

Revelations in the Financial Times on 16th April have underlined concerns, first raised by Global Witness two years ago, that senior officials in Angola have attempted to make private profits from the impoverished country’s oil sector via undisclosed interests in front companies.

The newspaper reported that three top officials are hidden owners of Nazaki Oil & Gaz, an obscure private company in partnership with the U.S. oil firm Cobalt International Energy in two oil exploration licences in Angola. Cobalt is being investigated in the United States under the Foreign Corrupt Practices Act in relation to its dealings with Nazaki, although it denies any allegation of wrong doing. The revelations raise serious concerns about the risk of corruption in the oil industry at a time when industry lobbyists are trying to gut transparency laws in the United States and European Union.

The Financial Times reported that it had received letters from two senior officials confirming that they had held interests in Nazaki via another company. Manuel Vicente, a minister who until the end of last year was the head of the powerful state oil company Sonangol, and as such had a key role to play in the determination of which companies obtained concessions in the Angolan oil sector, and a presidential advisor, Manuel Helder Vieira Dias “Kopelipa”. The two men confirmed that a third senior official, a presidential advisor named Leopoldino Fragoso do Nascimento, had also held an interest in Nazaki. It was not clear whether they still hold these interests.

Mr Vicente and Mr Kopelipa deny any wrong-doing and told the FT that they have held their interests in Nazaki whilst “always respecting all Angolan legislation applicable to such activities”. Whether or not this may be the case, the fact that the then head of the Angolan National Oil Company held private shares in a company, which was placed by the Angolan government into a partnership from which it stood to make millions of dollars of profit from the exploitation of Angolan state assets, raises serious questions about conflict of interest.

“These revelations reinforce what we and others have long suspected – that top Angolan officials, who are supposed to defend the interests of Angola’s people, appear to be personally benefiting from the countries oil wealth via undisclosed holdings in private companies,” said Simon Taylor, Director of Global Witness. “It is now important that the investigations taking place in the United States and in Angola[i] leave no stone unturned and establish the extent to which these officials played any role in the awarding of Nazaki’s concessions.”

These revelations demonstrate the urgent need for strong implementation of Provision 1504 of the Dodd-Frank Act in the United States, and for the European Union to pass similar laws, together commencing a new global standard for extractive industry transparency and accountability.  It is vital that the Securities and Exchange Commission (SEC) in the United States and the European Union (the EU Parliament and Council) resist the contemptible efforts of big oil to keep the oil industry in the dark.  This must include reporting on a project by project basis[ii] and must not include exemptions for any country, which would in effect amount to a “Dictator’s Charter”.[iii]

To read the Financial Times article, see Angola officials held hidden oil stakes

To read our recent findings on Nazaki and other obscure oil companies in Angola, see  Rigged: The Scramble for Africa’s Oil, Gas and Mining

To read our findings on BP’s payments for twenty percent of Block 20 in  Angola, which should be seen in the context of company lobbying to gut transparency rules, see BP makes opaque payments for Angola oil block as petro-lobby seeks weak transparency rules

 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

Editors notes

[i] In January 2012, a complaint was filed with Angola’s Attorney General by Human Rights Activist Rafael Marques de Morais, alleging corruption in the Nazaki case. 

[ii]The United States government and the European Commission have both rightly recognised that revenue disclosure by extractive companies needs to take place at the project level. This form of reporting will allow for much better tracking of revenue flows to the government as a deterrent to corruption and allow civil society activists, the media, academics and other concerned citizens, particularly in local communities around extractive or logging sites, to publically view this information.  Despite the industry is fervently lobbying against project-by project reporting in both the European Union and the United States. In the United States, there is no scope in law to remove the project by project disclosure requirement. Project must be defined as equivalent to activities governed by a licence, concession or similar legal agreement. Where any payment liabilities are incurred on a different basis, reporting should be on that basis.

[iii] The term “Dictators Charter” refers to a clause in the EU draft proposal, under which the European Commission has suggested an exemption from reporting where public disclosure is clearly prohibited by the criminal legislation in the host country. The US law does not contain an exemption provision and neither does the SEC have discretionary ability to introduce one. Despite this the industry lobby in the United States continues to push for such a clause. Companies have argued that criminal legislation in certain countries would prevent disclosure. There is no evidence that such laws exist, and when called to provide such evidence, no company has come forth. An exemption clause would aid and abet corrupt dictators to continue to loot their countries with impunity at the expense of their people, leaving the international donor community to pick up the pieces.