Oil companies are giving hundreds of millions of dollars to a research institute that may not be real

Oil companies agreed to pay $350 million to a research center in Angola -- where has the money gone?

Published August 5, 2014 3:29PM (EDT)


In December 2011 BP and Cobalt International Energy agreed to pay $350 million for the construction of a research institute in Angola, but there seems to be no evidence of such a center ever existing.

Here is what we know:

  • Cobalt, BP Exploration Angola and Sonangol signed a contract for an offshore area in Angola in December 2011. Shortly after, Cobalt listed funding for the Sonangol Research and Technology Center (SRTC) in a contract filed with the U.S. Securities and Exchange Commission (SEC).
  • On April 28, 2014, BP wrote a letter to UK-based nonprofit Global Witness, explaining that Angola requires oil companies granted exploration rights to fund socially beneficial projects. SRTC is that project which was, according to BP, "still in the planning stage."
  • In another letter to Global Witness in May 2014, Cobalt wrote that $175 million had already been paid, and an additional $175 million would be paid in the next two years.
  • Global Witness can't find anyone to confirm that the project actually exists.

The Huffington Post's Kate Sheppard has more:

Global Witness says the Angolan research center example demonstrates the need for tougher disclosure laws –- including pending SEC rules under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 1504 of that law directs the SEC to set requirements for companies that develop of oil, natural gas and minerals to disclose payments made to governments each year. The SEC has been working on those rules for years. A federal court threw out the commission's initial rule last year after the American Petroleum Institute and Independent Petroleum Association of America filed suit. The API's counsel said the rule would have the effect of "making American firms less competitive against state-owned oil companies," according to the Oil & Gas Journal...

BP spokesman Brett Clanton said via email that there was never an intention that BP and partners would build the SRTC. The payments for the project, called bonuses, were made directly to Sonangol and paid to a government account. "How Sonangol ultimately spends that money is the prerogative of the Angolan state," wrote Clanton. "Sonangol is legally subject to scrutiny by Angolan government auditors on how it uses its funds. " He added: "As required by relevant laws, we conduct appropriate due diligence."

The Angolan government has been accused of extreme corruption, so perhaps BP and Cobalt should have planned for a little oversight.

h/t Huffington Post


By Joanna Rothkopf

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Angola Bp Cobalt International Energy Missing Money Oil