A January 7 story in the Financial Times (here) said authorities in the U.S. and Ghana are investigating corruption allegations involving a privately held Texas oil company, Kosmos Energy. It controls a large share of the 1.8 billion barrel Jubilee field, one of Africa’s biggest recent oil finds.
The paper said Ghanian prosecutors are preparing criminal charges against Kosmos’ local partner, EO. It said EO was formed by two allies of John Kufuor, Ghana’s president until last year. One of EO’s founders was Houston-based businessman George Owusu, who was Kosmos’ representative in Accra. The other was Kwame Bawuah Edusei, later appointed Ghana’s ambassador to the U.S.
The report said the U.S. Justice Department “is also understood to be probing the relationship between EO and Kosmos, although the department on Thursday declined to confirm or deny this.”
Kosmos’ local partner, EO, reportedly holds a 3.5 percent stake in the offshore oil block found to be commercial in 2007. In October last year, Kosmos announced the sale of all its interests in Ghana, including the Jubilee field assets, to Exxon Mobil Corporation for $4 billion. EO’s stake, the Financial Times said, could be worth more than $200 million.
The Financial Times said EO brought Kosmos into Ghana three years ago. In exchange, Kosmos gave EO the 3.5 percent interest and paid EO’s “share of exploration and development costs, according to an agreement between the two companies obtained by the Financial Times.”
Kosmos is mainly owned by private equity firms Warburg Pincus and Blackstone Capital Partners.
Ghanian sources have also said the government opposes Kosmos’ sale to Exxon Mobil and is “considering cutting a deal with a leading Chinese oil company for the stake.”
The charges in Ghana against EO, according to the Financial Times, would include causing a financial loss to the state, money laundering, and making false declarations to public agencies. Both EO and Kosmos have denied any wrongdoing.
Kosmos told the Financial Times that “Ghana now wants to secure a share of the profits by forcing Kosmos to sell itself at a knock-down price to GNPC, the state oil group, which could then sell it to the highest bidder.”
The New York Times reported in October last year that Kosmos’ sale to Exxon Mobil requires approval by Ghana’s government, which is itself interested in buying the assets. Ghanian sources have also said the government opposes Kosmos’ sale to Exxon Mobil and is “considering cutting a deal with a leading Chinese oil company for the stake.”
The Financial Times reported that Duke Amaniampong, a California-based lawyer working for the Ghanaian investigation, said Ghana’s attorney general had accumulated “enough evidence of criminal culpability to bring charges against the EO group and its directors.” A website called Modern Ghana said Amaniampong was appointed to help Ghana’s attorney general prosecute “Kufuor’s men.” It said he is a graduate of Santa Clara University law school and was admitted to the State Bar of California in 1996.
When production begins later this year from the Jubilee field — expected to be 120,000 barrels a day — Ghana will become an oil exporting country.