Liberia: New Global Witness report critical of Exxon's involvement in an oil block deal allegedly tainted with irregularities & undermining transparency
A new Global Witness investigation shows Exxon’s 2013 purchase of Liberia’s Block 13 oil license likely enriched former government officials who may have illegally owned the block. The state oil agency NOCAL also allegedly made unusual, large payments to senior government officials who authorized the 2013 deal. Global Witness' evidence shows that Exxon suspected the company it was purchasing the oil block from – Broadway Consolidated/Peppercoast (BCP) – was likely part-owned by former Liberian politicians who had illegally granted themselves the block. Exxon allegedly knew its purchase might enrich these former politicians. Exxon, BCP, BCP’s suspected owners, and the Liberian Government did not respond to Global Witness when asked about the deal. Canadian Overseas Petroleum did respond, stating that its due diligence showed that there were no legal problems with the deal, it had legal advice on its anti-money laundering and anti-corruption obligations, and that there was no credible evidence that BCP was owned by former officials. Details of this response can be found in Global Witness’ report. Global Witness calls on the Liberian Government to investigate those involved in Exxon’s 2013 oil deal for corruption or wrongdoing.
Exxon said they were: "confident that the agreement complies with local Liberian law and international anticorruption laws….Exxon Mobil has an unwavering commitment to honest and ethical behavior wherever we do business. We have a longstanding commitment to compliance with the U.S. Foreign Corrupt Practices Act and the anticorruption laws of the countries and territories in which we do business."
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Author: Scott Patterson, Bradley Olson & James V Grimaldi, Wall Street Journal
The Exxon transaction shows the extent to which companies are structuring deals to try to minimize the risks of government scrutiny. This account of what Exxon learned about potential red flags, and what it did in response, is based on interviews with three people directly involved in the negotiations and a review of transaction and bank documents detailing the movement of funds. Some of the documents were provided by Global Witness, a London-based organization that investigates corruption, which released a report on the deal Thursday. The Journal independently corroborated information from the Global Witness documents. The bank documents reveal that hundreds of thousands of dollars in payments were made to Liberian government officials involved in the deal, including the son of the country’s former president, Ellen Johnson Sirleaf, who was awarded the Nobel Peace Prize in 2011. Exxon spokeswoman Rebecca Arnold said the company is “confident that the agreement complies with local Liberian law and international anticorruption laws….Exxon Mobil has an unwavering commitment to honest and ethical behavior wherever we do business. We have a longstanding commitment to compliance with the U.S. Foreign Corrupt Practices Act and the anticorruption laws of the countries and territories in which we do business.”
President Weah orders investigation of Exxon Mobil alleged "fraudulent" acquisition of Oil Block 13 reported by Global Witness in latest report
Author: Front Page Africa (Liberia)
"President Weah Orders Investigation of Exxon Mobil 'Fraudulent' Acquisition of Oil Block 13", 31 March 2018
President George Manneh Weah has mandated Justice Minister Frank Musa Dean to investigate recent Global Witness report linking some ex-officials of government to an alleged bribery scheme that led to the awarding of Oil Block 13 to Exxon Mobil. The investigation comes at the heels of a general concession review, including concessions in the oil sector...In its report, Global Witness urged the Liberian government to investigate Exxon’s US$120 million oil deal and ensure independence of the Liberia Industries Transparency Initiative...Global Witness’ evidence shows that...[Exxon]...structured the transaction in a way to skirt US anti-corruption laws by using a Canadian company – Canadian Overseas Petroleum Limited (COPL) – as a go-between to buy the block...Exxon has not responded to Global Witness’ request for comment. COPL has, saying its due diligence showed that there were no legal problems with the deal, that Mason did not hold shares in BCP, shareholders certified they held no interest for others, and that it received legal advice on its anti-corruption and anti-money laundering obligations.
Author: Global Witness (UK & USA)
This is a story of bribery, suspected secret shareholders, and an audacious attempt by oil giant Exxon to bypass US anti-corruption laws. It is a story
of how the American company...appears to have turned a blind eye to earlier corruption when buying an oil license in the impoverished West African country of Liberia. Finally, this is a story of how the US can help end corruption by requiring that oil companies report in detail what they pay to governments...[T]he company from which Exxon...[bought] Block 13 – Broadway/Peppercoast (BCP) – may have been owned by former government officials, and the license was originally granted through bribery...But Exxon was prepared, and arrived in London with a plan it thought would allow the company to buy Block 13 while skirting US anti-corruption laws. This would be done by having a third company act as a go-between, buying Block 13 from BCP and then selling the majority of the license to Exxon. The company Exxon would use was Canadian Overseas Petroleum Ltd (COPL)...In March 2018, Global Witness wrote to Exxon, COPL, the Liberian Government, BCP, and its suspected owners requesting comment on the Block 13 deal. As of the date of publication, only COPL has responded. The company stated that it was “aware of the allegations concerning Peppercoast’s [BCP] minority shareholders,” but that its due diligence did not find that former officials were partowners of BCP and all shareholders signed agreements promising their payments would not go to others.
Global Witness press release: "Exxon purchase of Liberia’s corruption-tainted Block 13 likely enriched former Liberian officials"
Author: Global Witness (UK & USA)
Exxon purchase of Liberia’s corruption-tainted Block 13 likely enriched former Liberian officials, 29 March 2018
A new Global Witness investigation released today shows Exxon’s 2013 purchase of Liberia’s Block 13 oil license likely enriched former government officials who may have illegally owned the block. The state oil agency NOCAL also made unusual, large payments to senior government officials who authorized the 2013 deal. Global Witness calls on the Liberian Government to investigate those involved in Exxon’s 2013 oil deal for corruption or wrongdoing. Block 13 was originally awarded by NOCAL in 2005 to Liberian-Anglo company Broadway Consolidated/Peppercoast (BCP). In 2007, the block was ratified by the Liberian legislature through bribery...Global Witness’ Exxon investigation was made possible by information published by the Liberian Extractive Industries Transparency Initiative (LEITI), an independent agency that publishes annual reports of payments made by companies to the government...