GHANA: Corruption probe into sale of Ghana oil block

Publisher Name: 
Financial Times

US
and Ghanaian authorities are investigating corruption allegations
involving a Texas oil company and the local partner that helped it
secure control of the Ghanaian oil block that yielded one of Africa's
biggest recent discoveries.

The case risks complicating efforts by Texas company Kosmos to sell its stake in the Jubilee oil field to ExxonMobil
in a deal valued at $4bn. Kosmos, which denies any wrongdoing, is owned
by US private equity groups Blackstone and Warburg Pincus.

According
to people close to the investigation, Ghana is preparing to file
criminal charges against EO, a company set up by two political allies
of John Kufuor, former president, whose party lost tense elections a
year ago. The US 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.

Duke Amaniampong, a
California-based lawyer working for the Ghanaian investigation told the
Financial Times that Ghana's attorney-general had accumulated "enough
evidence of criminal culpability to bring charges against the EO group
and its directors".

The charges would include "causing a
financial loss to the state, money laundering and making false
declarations to public agencies", said a person in the
attorney-general's office.

Ghanaian officials suspect that EO
used its access to top officials in the former government to gain a
hold on the country's most promising offshore oil block and win more
favourable terms both for itself and Kosmos.

EO's directors declined to answer questions but said in a
statement that they had played an important role in opening Ghana's oil
industry, and had done so lawfully and without using "improper
influence".

Kosmos said allegations of wrongdoing against it were "untrue and unsubstantiated".

Ghana, Kosmos said, 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. "Some
factions in the country are clearly seeking to spread rumours and
untruths in an attempt to undermine the company so that its assets can
be [pushed] below fair market value," Kosmos said.

EO was set up by a Houston-based businessman, George Owusu, who
was Kosmos's representative in Accra and Kwame Bawuah Edusei, a doctor
and supporter of Mr Kufuor who was later appointed as ambassador to
Washington.

The group has a 3.5 per cent stake in the offshore oil block
where Kosmos first found commercial quantities of oil in 2007. EO,
whose stake could be worth more than $200m, initiated the deal which
brought Kosmos into Ghana three years earlier.

In return,
Kosmos met EO's share of exploration and development costs, according
to an agreement between the two companies obtained by the Financial
Times.

According to a senior Ghanaian official, Kosmos's financing of
EO's costs was "widely regarded in the industry as unusual" especially
as the terms of Kosmos's deal with the government and state oil group
were "more favourable [to Kosmos] than from any other agreement".

Kosmos, a Texan oil company, conducts a successful drillstem test in the Jubilee field

Kosmos,
a Texan oil company, conducts a successful drillstem test in the
Jubilee field. The ongoing Ghana investigation risks complicating
effortsby Kosmos to cash in its share of the country's biggest field.

AMP Section Name:Energy
  • 104 Globalization
  • 116 Human Rights
  • 183 Environment
  • 185 Corruption
  • 190 Natural Resources