Cobalt International is an energy company that explores and produces oil and gas at locations in North America and West Africa. Unlike other oil and gas companies, Cobalt has chosen to focus on two main sites, the Gulf of Mexico and offshore from Angola and Gabon, rather than to expand all around the globe. Based in Houston, Texas, Cobalt was founded in 2005 and incorporated in 2009.
Over its short history Cobalt International Energy has faced a lot of controversy. Like any offshore oil company it faces safety problems and the constant threat of environmental issues. Cobalt has also faced controversies over how it does business, even being accused of corruption in how it secured rights in Angola. If you work for an offshore company like Cobalt and are hurt on the job, know that the company has a responsibility to provide you with compensation and that there are laws in place to ensure that.
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Cobalt’s corporate vision is to become one of the best oil exploration and production companies in the world. It claims to have a business model that allows it to operate efficiently and to quickly move from exploration to development and production of real oil. Cobalt was not always devoted to producing oil. Its beginnings were in exploration and that has always been its strong suit. Now and in the future the company hopes to further expand its development and production techniques.
Using that expertise in exploration, which includes seismic and subsurface data, Cobalt has identified two major reserves as its assets: 230 deepwater blocks in Lower Tertiary and Miocene plays in the Gulf of Mexico and several new plays off the coasts of Angola and Gabon. The latter are new areas for exploration and Cobalt has had success hitting oil with 13 out of 14 exploratory wells.
In the Gulf of Mexico Cobalt operates 90 percent of its leases, which helps it to spend more time and money exploring the west coast of Africa. There, the company holds a 40 percent interest in three blocks in Angola and a 21 percent interest in its Gabon reserves.
Moving from exploration into development was not a big leap for Cobalt. It has taken big steps toward developing procedures for producing oil at its sites offshore. The company relies more on subcontracting and leasing than hiring a staff or buying its own rigs and equipment. This allows it to work more efficiently to develop wells.
Cobalt and Safety
In the dangerous industry of offshore exploration and oil production, Cobalt has taken steps to minimize risk and accidents and to promote safety of workers and the environment. It created a Health, Safety, Security, and Environmental Policy, or HSSE, to address these needs. Employees, leader, contractors, and suppliers are held to these standards.
The standards set out in the HSSE include adhering to all safety and environmental laws, communicating expectations, roles, and responsibilities to contractors and employees, managing positive relationships with contractors, following good technical practices and risk management principles, maintaining safe work environments, auditing and reporting on performance, and reviewing and evaluating operations.
Even with this impressive list of standards, Cobalt falls short sometimes. Offshore work is hazardous, and even when precautions seem to be enough, they may not be and accidents can happen. Sometimes these harm workers and other times they harm the environment. For instance, one incident occurred when a flowline valve malfunctioned and failed to open while drilling. This caused oil to flow into the Gulf of Mexico as it over-spilled the pollution pan on a Cobalt rig. Workers thought that the flowline was open because a panel screen indicated that it had. This was a case of technology malfunctioning and causing environmental damage as a result.
The Angola Controversy
Accidents are not the only incidents that have cast a shadow over Cobalt. It got in trouble with the U.S. Securities and Exchange Commission (SEC) for shady operations with Angola. Cobalt first began working in Angola in 2008 and explored for oil offshore with a state-owned company and a couple of other local companies. The SEC started investigating these operations in 2011 after an investigative journalist reported that one of the local companies was secretly government-owned.
It was discovered that government officials did in fact own stakes in the company in question, Nazaki, through an intermediate company. That company has since been dissolved, but whether the officials are still connected to the oil company is not known. Since the state-owned company issues licenses for exploring offshore oil in Angola, this was problematic.
The SEC investigated Cobalt under possible violations of the Foreign Corrupt Practices Act. The SEC believes that the company violated the law by bribing foreign officials. This would have happened because of Cobalt’s association with the shell companies. Angola has claimed that its officials’ stakes in the companies did not influence licenses and Cobalt has claimed that they had nothing to do with wrongdoing or bribery.
As a result of all of this a lawsuit was filed against Cobalt in 2014 on behalf of people who purchased securities and stocks with the company during a certain time period. The plaintiffs claim to have lost billions of dollars because of the SEC investigation and that the company had inflated the values of the reserves it found in Angola.
For workers at Cobalt these kinds of issues may not be a top concern. What is more challenging is the daily dangerous work of offshore oil exploration and drilling. These workers are protected by maritime laws and have a way to get compensation in the event of an accident that causes injury. Their loved ones can also seek this compensation if they die on the job, which happens all too often in maritime work. If you have been hurt on the job doing maritime work you have a right to seek compensation, even if your employer tries to withhold it. Let the expertise of an experienced maritime lawyer guide you as you seek the compensation you deserve.