Angola Set to Disclose Payments From Big Oil

[Diane Monaco <diane.monaco@xxxxxxxxx>]

Angola Set to Disclose Payments From Big Oil
By HEATHER TIMMONS
May 13, 2004
New York Times

LONDON, May 12 - In a reversal of a longstanding policy, the Angolan 
government will disclose some payments it receives from oil companies that 
do business there, making the southwest African nation the latest to 
respond to pressure to make such compensation public.

An Angolan government official is expected to disclose on Thursday that the 
country is receiving $300 million from ChevronTexaco at a deal-signing 
ceremony in Washington with the company's chief executive, David J. 
O'Reilly, three executives with knowledge of the agreement said.
The deal extends Chevron's outstanding rights to the shallow-water oil and 
gas field known as Block Zero through 2030.

Angola and other developing nations have been under scrutiny from human 
rights groups, the International Monetary Fund, the World Bank and the 
British government to reveal what they receive from oil companies for 
access to national crude reserves.

Angola has been trying to strengthen ties with the United States and 
foreign investors, and the payment announcement would come in the middle of 
Angolan president José Eduardo dos Santos's three-day trip to the United 
States.

He met with President Bush on Wednesday morning. The United States is the 
market for more than half of Angola's estimated production of 950,000 
barrels a day.

Angola's finance minister, José Pedro de Morais, disclosed the amount of 
the ChevronTexaco payment to Angolan media last week, and a spokesman for 
the oil company confirmed that an announcement was expected Thursday, but 
did not provide details. Mr. de Morais was unavailable for comment on 
Wednesday, a spokesman in Angola's Washington embassy said.

What energy and mining companies pay governments for drilling rights has 
become a hot-button issue as resources in the developed world dry up.

"We are running out of places to find oil," said Karina Litvack, head of 
governance and socially responsible investment at ISIS Asset Management in 
London. Oil companies are starting to look for resources, she said, "where 
the money the companies pay the government sometimes fuels corruption, 
instability or human rights abuses."

By disclosing the amount it is being paid, Angola's government is setting 
"a new standard for transparency," Ms. Litvack said.
"We are cautiously optimistic," said Ben Mellor, an official with Britain's 
Department for International Development.

Prime Minister Tony Blair of Britain started the Extractive Industry 
Transparency Initiative, known as E.I.T.I., in 2001, and many international 
oil companies and shareholders groups have said they support the 
initiative's call for increased disclosure.

Angola's decision to make public the money it is receiving from 
ChevronTexaco may represent a "real turning point" for the country, Mr. 
Mellor said. Nigeria and Azerbaijan had recently stepped up disclosure of 
payments they have received from foreign oil companies after receiving 
outside pressure.

Angola, which emerged from nearly 30 years of civil war in 2002, is 
struggling with food shortages, a large debt, and high poverty and H.I.V. 
rates among its 10.8 million citizens.

Human Rights Watch estimated that $4.2 billion in oil revenues were 
unaccounted for in Angola from 1997 to 2002. The government has said such 
numbers are misleading, but it is under intense pressure from outside 
agencies and foreign investors to provide figures.

"The goal is to make the government accountable for how it manages its 
resources," said Karin Lissakers, an adviser to George Soros, the financier 
and philanthropist. Mr. Soros supports Publish What You Pay, a campaign to 
encourage oil companies to disclose the payments they make to developing 
nations.

Angola's expected announcement on Thursday is an "important step," Ms. 
Lissakers said, but "one hopes they will take the next step and adopt the 
E.I.T.I. standards for the whole sector."
ChevronTexaco is the biggest foreign oil producer in Angola, and pumps 
about 400,000 barrels a day from the Block Zero field.

The company operates Block Zero, and shares ownership with France's Total, 
Italy's ENI and Angola's government-owned oil company.

ChevronTexaco is paying $210 million to sign the 20-year agreement, as well 
as $80 million to develop social programs in the region and another $10 
million in production-related payments.