SEC terminates Cobalt corruption probe

January 29, 2015

United States Securities and Exchange Commission (“SEC”) has terminated investigation relating to Cobalt International operations in Angola. According to the oil company,the SEC will not recommend any enforcement action against Cobalt.

The Houston-based oil company says that the SEC notice formally concludes the SEC’s investigation, which began in 2011 in response to bribery allegations, connecting senior Angolan government officials and Nazaki Oil and Gaz, S.A., an Angolan company that, until 2014, held a working interest alongside Cobalt on Blocks 9 and 21 offshore Angola.

Cobalt received a formal investigative order from the SEC in November 2011 and a Wells Notice on August 4, 2014.

Since the start of the investigation, Cobalt has said the company believes its activities in Angola have complied with all laws, including the U.S. Foreign Corrupt Practices Act (FCPA).

The FCPA prohibits improper payments or offers of payments to foreign governments and their officials and political parties for the purpose of obtaining or retaining business.

Joseph H. Bryant, Cobalt’s Chairman and Chief Executive Officer, stated, “We are of course pleased with the closure of the SEC’s investigation. We have the utmost respect for the SEC and its investigative process, and cooperated fully with the SEC. Cobalt remains committed to conducting operations and creating shareholder value transparently and in compliance with all applicable laws and regulations.”

Corruption in Angola

According to Transparency International, Angola’s public sector is perceived to be among the most corrupt in the world.

The organization’s Corruption Perceptions Index ranks countries and territories based on how corrupt their public sector is perceived to be. A country or territory’s score indicates the perceived level of public sector corruption on a scale of 0 (highly corrupt) to 100 (very clean). Angola’s score by the Corruption Perception Index is 19.

Of 175 countries included in the 2014 Corruption Perspections Index, Angola is at the bottom end taking the 161st place together with Guinea-Bissau.

According to Transparency International, only five African countries have a lower CPI score than Angola (Libya 18, Eritrea 18, South Sudan 15, Sudan 11, Somalia 8). Transparency International says that a poor score is likely a sign of widespread bribery, lack of punishment for corruption and public institutions that don’t respond to citizens’ needs.