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Cobalt, BP spent $175 million for a ‘missing’ Angola research center

Image courtesy of Sonangol via YoutubeA research center in Angola paid for by foreign oil companies who won the rights to some of the country’s 9.1 billion barrels of oil reserves can’t be found, Tim Fernholz reported in Quartz.

The center — supposedly a training facility where Angolans can learn skills needed for work in the oil and gas sector — has so far attracted $175 million in investment from Cobalt International Energy and BP.

As part of an oil concession deal, the companies committed in 2011 to spend $350 million for development of the Sonangol Research and Technology Center, Quartz said.

Sonangol is Angola’s state-owned oil and gas company.

“Neither BP nor Cobalt have any knowledge of whether the center was ever built, despite making the first of three installment payments, according to letters the companies sent to Global Witness,” Quartz said.

Sonangol didn’t respond to Quartz’s requests for comment.

BP said: “Having the right relationship with the state oil company is important to us, but as far as the signature bonus goes, it’s like paying taxes — once you’ve paid your tax, you can’t tell your government what to do with it.”

Houston-based Cobalt said earlier this month the U.S. Securities and Exchange Commission has made a preliminary determination to recommend an enforcement action against it based on alleged violations of the Foreign Corrupt Practices Act.

In 2011, the SEC issed a formal order of investigation regarding Cobalt’s operations in Angola.

Quartz said the next $75 million payment for the missing Sonangol Research and Technology Center is due in January 2016.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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