Cobalt cuts ties with two Angola oil partners

Cobalt International Energy has severed ties with an Angolan company in which top officials in the oil-rich African state had held concealed stakes, weeks after US regulators probing possible corruption said they planned to bring charges against the Houston-based explorer.

The New York-listed group said in a regulatory filing on Wednesday night that two Angolan companies - Nazaki Oil and Gaz, and Alper Oil - had transferred their interests in an offshore oil venture operated by Cobalt to Sonangol, Angola's state-owned oil company.

Following the transactions, Cobalt said it "no longer has any relationship with Nazaki or Alper". It said it still expected Angola's government to give the go-ahead for it to start pumping oil from its Cameia discovery and for production to begin in 2017.

Online summaries of entries in Angola's official gazette confirmed that Nazaki had quit the project and that Alper had been authorised to transfer its stake to Sonangol but gave no further details of either transaction.

A lawyer for Cobalt did not immediately respond when asked whether Sonangol had paid Nazaki and Alper for their stakes in the project. Last year, Nazaki transferred half of its 30 per cent stake to Sonangol. No details were disclosed of what, if any, fee was paid for that 15 per cent interest, which was worth about $1.3bn, according to bankers' valuations.

Cobalt, which is backed by Goldman Sachs and US private equity groups, is developing a major oil find off the coast of Angola, a prime energy frontier controlled by an authoritarian government that perennially ranks close to the bottom of Transparency International's corruption perceptions index.

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In 2012, two top officials confirmed to the Financial Times that they and a former official had held previously concealed stakes in Nazaki. One of the officials was Manuel Vicente, who was head of Sonangol at the time it granted Cobalt its rights and is now Angola's vice-president. The other was General Manuel Helder Vieira Dias Junior, known as Kopelipa, the head of the military bureau in the presidency.

Cobalt's stock fell 10 per cent after it announced this month that the US Securities and Exchange Commission had notified the company that it planned to pursue a case following a three-year investigation into possible breaches of the Foreign Corrupt Practices Act.

Charges do not automatically follow such a notification and Joseph Bryant, Cobalt's chief executive and chairman, called the SEC's move "erroneous". Cobalt denies wrongdoing and has said it was unaware of the officials' concealed stakes at the time it agreed to go into business with Nazaki.

Under the terms of the contract for the project, Cobalt was obliged to fund a "free carry" for Alper's 10 per cent stake, meaning that Cobalt paid Alper's share of development costs. Cobalt said in Wednesday's filing that it would recoup its outlay on Alper's free carry from Sonangol's revenues once the project began pumping oil.

Nazaki and Sonangol did not immediately respond to requests for comment. The FT has been unable to reach Alper, whose owners are undisclosed, for comment. Following the transactions, Cobalt and Sonangol are the only shareholders in the venture, with 40 per cent and 60 per cent respectively.

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