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Thursday
Feb282013

Cobalt Angola operations still under investigation

Independent oil and gas firm Cobalt International Energy, Inc. said this week that DOJ and SEC investigations into business arrangements in Angola are ongoing and the company is cooperating.

Last year, news sources reported alleged links between Angolan government officials and Nasaki Oil and Gas, one of Cobalt's partners in Angola.

Cobalt strongly denied the allegations. It said its own internal investigation revealed no illegal conduct.

The Anglolan officials were identified in press reports as Manuel Vicente, former head of state-owned Sonangol and now minister of state for economic co-ordination, General Manuel Helder Vieira Dias Junior, head of the president's military bureau, and General Leopoldino Fragoso do Nascimento. They allegedly held their interests through Grupo Aquattro Internacional until 2010.

The reports said the officials claimed they didn't influence award of Cobalt's oil rights in Angola.

Cobalt said it learned of Nasaki's links to government officials in 2010.

The company has said it was forced to enter into contracts with 'two Angolan-based [exploration and production] companies . . . assigned as part of the contractor group by the Angolan government.'

                                                           *     *     *

Here's the FCPA disclosure from Cobalt International Energy's Form 10-K filed with the SEC on February 26:

In connection with entering into our RSAs for Blocks 9 and 21 offshore Angola, two Angolan-based E&P companies were assigned as part of the contractor group by the Angolan government. We had not worked with either of these companies in the past, and, therefore, our familiarity with these companies was limited. In the fall of 2010, we were made aware of allegations of a connection between senior Angolan government officials and one of these companies, Nazaki Oil and Gáz, S.A. ("Nazaki"), which is a full paying member of the contractor group. In March 2011, the SEC commenced an informal inquiry into these allegations. To avoid non-overlapping information requests, we voluntarily contacted the U.S. Department of Justice ("DOJ") with respect to the SEC's informal request and offered to respond to any requests the DOJ may have. Since such time, we have been complying with all requests from the SEC and DOJ with respect to their inquiry. In November 2011, a formal order of investigation was issued by the SEC related to our operations in Angola. We are fully cooperating with the SEC and DOJ investigations, have conducted an extensive investigation into these allegations and believe that our activities in Angola have complied with all laws, including the FCPA. We cannot provide any assurance regarding the duration, scope, developments in, results of or consequences of these investigations.

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