SEC upgrades Equatorial Guinea payments inquiry

Aug. 10, 2005
The US Securities and Exchange Commission apparently has upgraded its 2004 probe of US oil and gas producers' payments to the government of Equatorial Guinea to a formal investigation from an informal inquiry.

Nick Snow
Washington Correspondent

WASHINGTON, DC, Aug. 10 -- The US Securities and Exchange Commission apparently has upgraded its 2004 probe of US oil and gas producers' payments to the government of Equatorial Guinea to a formal investigation from an informal inquiry.

Marathon Oil Corp. and Amerada Hess Corp. have received subpoenas related to the probe, the companies disclosed in separate 10-Q filings. Devon Energy Corp. received a subpoena Wednesday morning, a spokesman told OGJ.

The SEC also notified ExxonMobil Corp. of a "formal order seeking information regarding several companies operating in Equatorial Guinea," a spokeswoman for the company said. ExxonMobil has not received a subpoena, she added.

All four producers said they are cooperating with the commission in its probe. An SEC spokesman would not comment on its status.

The companies have described the probe as focused on payments to the West African country's government or to officials and persons affiliated with it. The Foreign Corrupt Practices Act prohibits US companies from paying foreign officials to obtain business.

The SEC launched its probe in August 2004 after the Senate's permanent investigation subcommittee questioned oil company payments as part of a larger inquiry into operations of Washington-based Riggs Bank, where Equatorial Guinea kept much of its money. PNC Financial Services Group Inc. bought Riggs in May.

A July 2004 report by the subcommittee's minority staff found that oil companies operating in Equatorial Guinea may have contributed to corruption there by making payments to, or entering into formal business ventures with, individual government officials, their family members, or entities they control "with minimal public disclosure of their actions."

The report said the subcommittee's investigation into oil company payments found that some Equatorial Guinea officials and their families had come to dominate certain economic sectors in the country "and, in some case, had become virtual economic gatekeepers for foreign companies wishing to do business in the country."

It also identified Chevron Corp. and Vanco Energy Co., a privately held Houston independent, as producers operating in Equatorial Guinea. A Vanco official said the company provided information to the Senate subcommittee but is not part of the SEC inquiry. At the time of writing, Chevron had not responded to OGJ's inquiry about whether it is part of the SEC probe.

Contact Nick Snow at [email protected].