Simba vs Chevron We have been working on our Liberian PSA for a long long time, but we are going about it the right way. Working with the people, making their life better, and working with the local and Liberian government. Liberia is basically a new country. The government is learning as they go, and want to get it right. It may still be awhile before we get our PSA, but when we do there won't be any maybe's attached to our PSA. Chevron may have gotten their concession in less time then us, but theirs may be a little bit iffy.
Christopher Helman, Forbes Staff
Report Says Chevron Partners Paid Bribes In Liberia
President Ellen Johnson-Sirleaf is fighting bribery in Liberia.
Maybe I’m just too cynical, but it doesn’t surprise me to read a report alleging that Chevron‘s partner in some oilfields offshore Liberia paid bribes to the Liberian legislature and that Chevron “ignored evidence of corruption” when it bought into the project a year ago.
The allegations are directed at a west African oil company called Oranto Petroleum as well as NOCAL, the national oil company of Liberia. According to a report from watchdog organization Global Witness, both Oranto and NOCAL made payments in excess of $120,000 to members of the Liberian legislature in order to facilitate approval of oil contracts. Chevron holds a 70% stake in the nascent exploration venture, Oronto 20% and NOCAL 10%.
A Chevron spokesman emailed me the obligatory vague denial: “Chevron’s engagement with the Liberian Government in relation to our blocks has been made in accordance with all applicable legal and regulatory requirements. For competitive and commercial reasons, Chevron does not release specific financial details. Chevron will continue to work with the Liberian Government to evaluate the country’s petroleum resources.”
The Global Witness report makes for interesting reading, but it doesn’t even begin to get into what to me is the most interesting part of this story — who’s behind Oronto Petroleum?
Well, some creative Googling reveals that Oronto Petroleum is controlled by Prince Dr. Arthur Ikpechukwu Eze. If his biography is to be believed, Eze is descended from royalty and is considered to be the “clan head” or even “god father” of Dunokofia Kingdom, which is located in Nigerian state of Anambra.
Known for his kind hearted, generous and expansive personality, the Prince is well-known in Nigeria’s Byzantine business world and has been active behind the scenes on the political stage since the early 1990s. The Prince regularly made headlines in the country’s vibrant political press during the Abacha era, principally for his perceived role as political power-broker in his native state of Anambra.
Note the last bit — his “perceived role” a power broker during the rule of Nigeria’s notorious dictator Sani Abacha. A murderer and kleptocrat said to have looted $500 million from Nigeria and ordered the execution of human rights activist Ken Saro-Wiwa, Abacha died in 1998. (Of course you can’t believe everything you read in Wikipedia, but its page on Abacha is riveting, and there’s lots of solid references to his actions and legacy.)
Granted, Liberia is not Nigeria. But bribery is a problem there. In a speech earlier this month Liberia’s President Ellen Johnson-Sirleaf said that her administration is fighting corruption. She has created an “Anti Corruption Commission” and proposed a Whistleblower Act and a Freedom of Information Act. But, she said, Liberia’s legal system is so dysfunctional “that it will take tremendous reforms to make it work”
Sirleaf even made a point earlier this year of publicly rejecting a seemingly run-of-the-mill bribe offered to her by the manager of a palm oil company she was touring.
So is this something that should be worrisome to Chevron? Well maybe so. Even a hint of bribery could set off an investigation by the Dept. of Justice into whether Chevron might have somehow violated the Federal Corrupt Practices Act.
In recent years oil services companies Weatherford International and Baker Hughes have gotten tangled up in FCPA investigations. German giant Siemens was found to have paid more than $1 billion in bribes, then paid $800 million in fines. KBR and Halliburton settled an FCPA investigation in 2009, agreeing to pay $400 million for their role in a Nigerian bribery scandal.
Bad for shareholders, good for lawyers. As my Forbes colleague Nathan Vardi pointed out in a cover story last year, the ones who make the most money off bribes aren’t those who receive them, but the corporate attorneys hired to sort the mess out.