BP, Cobalt cases in Angola show why the oil sector needs tougher transparency rules

Payments by BP to the state oil company of Angola and news of a U.S. investigation into Cobalt International Energy’s Angolan activities are underlining the need for greater transparency about how companies gain access to energy deals.

The BP and Cobalt cases show why we need much more transparency around the accessing of oil deals in poor and corruption-prone countries like Angola. Yet ironically, industry lobbyists are trying to water down transparency laws in the United States and European Union,” said Gavin Hayman, Campaigns Director of Global Witness.

Global Witness shows in a new briefing that BP has agreed to make multi-million dollar payments into obscure “social projects” controlled by Sonangol, 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.

To read about BP’s controversial payments in Angola, and BP’s response to questions from Global Witness, click here.

Global Witness first raised concerns in May 2010 about joint ventures in Angola between Cobalt International Energy, the US-based oil explorer, and obscure Angolan private companies. As we reported at the time, many observers believe that small and little-known companies are used as fronts by top Angolan officials to enrich themselves privately.

On 21st February 2012, Cobalt told investors that it is under formal investigation by the U.S. authorities, related to its activities in Angola. To read Cobalt’s disclosure, click here (the disclosure is on Page 50).

To read Global Witness’ original briefing from May 2010, see here

The Financial Times reported on the Cobalt investigation on 22nd February. To read the story, click here.

To read our new report “Rigged. The Scramble for Africa’s Oil, Gas and Minerals”, with investigations into deals in Angola, Nigeria and the Democratic Republic of Congo, read here