- GEPetrol, the national oil company of Equatorial Guinea controlled by the family circle of Prsident Obiang, has completed the buy-out of all assets so far held by Devon Energy in the country. GEPetrol spent US$ 2.2 billion on the expansion.
The Oklahoma-based US company Devon Energy Corporation announced today that it had completed the previously announced sale of its oil and gas business in Equatorial Guinea. "The sale price was US$ 2.2 billion before taxes, US$ 1.7 billion after taxes," a company statement reads. The effective date of the sale was 1 January 2008.
The buyer was said to be GEPetrol, the national oil company of Equatorial Guinea. GEPetrol is controlled by Equatoguinean President Teodoro Obiang Nguema and his most trusted family members and has been strongly criticised for an almost total lack of transparency. Large funds stemming from Equatorial Guinea's oil production earlier have been found on President Obiang's private accounts in US banks.
The properties bought by GEPetrol in Equatorial Guinea included estimated proved reserves of 55 million barrels of oil. Devon Energy's share of production from these properties was about 20,000 barrels of oil per day.
For Devon Energy, the divestment was a major step. "Equatorial Guinea was the most significant asset in our US$3 billion African divestiture program," commented John Richels, Devon's President. "We are very pleased with the results of the programme and expect to complete the remaining approximately US$ 250 million in transactions in the third quarter," he added.
The US company did not state its reasons for divesting from Equatorial Guinea, While operating in the country is known to include great costs lost to corruption, the many smaller oil companies that entered into the country at an early stage have been making large profits, although at a high risk.
Equatorial Guinea's GDP has skyrocketed during the last decade as a result of the great oil production starting from zero. However, the country's small population has seen no significant gains of this economic boom as poverty continues to hit the majority of citizens. President Obiang's family and foreign oil companies on the other hand, have made fortunes on the business.
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