©EPA

Isabel dos Santos

Cobalt International Energy’s plans to offload an African oil discovery at the centre of a US corruption investigation have suffered a blow, after Angola’s state energy group backed away from a $1.8bn deal to buy it.

Cobalt, the New York-listed Texan oil explorer, reached a sale agreement with state-owned Sonangol a year ago. But Isabel dos Santos, the billionaire daughter of Angola’s authoritarian president and newly appointed Sonangol boss, has now written to Cobalt to recommend that it sell its interest elsewhere, the US group said on Tuesday.

Ms dos Santos’s decision delays what Cobalt had hoped would be the final act of its eventful foray in Africa’s second-biggest oil producing country.

In 2012, seven years after it was founded with $500m from Goldman Sachs and US private equity groups, Cobalt’s share price jumped 38 per cent in a day, giving it a market value of $11bn, after it struck oil under Angola’s seabed.

Weeks later, the Financial Times reported that three top Angolan officials had held previously concealed stakes in a local company, Nazaki Oil and Gaz, which the government had assigned to be Cobalt’s partner when granting exploration rights. One of those officials, Manuel Vicente, was head of Sonangol at the time that the rights were granted. He is now the country’s vice-president.

All three officials deny wrongdoing, as does Cobalt, which maintains it did not know about the officials’ hidden stakes.

US authorities had opened a corruption investigation in 2011 following allegations about the hidden stakes made by a local activist, Rafael Marques de Morais. In 2014, Cobalt severed ties with Nazaki and another local partner, which transferred their interests in the project to Sonangol.

Last year, the US Securities and Exchange Commission, which handles potential civil violations of anti-corruption law, dropped its case. A parallel investigation by the Department of Justice, which handles criminal cases, was still ongoing as of May, according to a Cobalt filing.

Angola’s vast natural wealth, chiefly oil but also diamonds, was the subject of three decades of on-off civil war, which finally ended in 2002.

But it continues to fuel instances of bribery and embezzlement that have left the country five places off the bottom of Transparency International’s rankings of perceived corruption last year.

Timothy Cutt, a former head of petroleum at BHP Billiton who took over as Cobalt chief executive in July, blamed the lack of recovery in the crude oil price for Sonangol’s decision to pull back from the purchase of Cobalt’s assets.

Mr Cutt, who has held talks with Ms dos Santos in Luanda, said that he would invite other potential buyers to a data room this week. Cobalt, which slipped to a net loss of $252m for the first half of the year compared with a $148m loss for the same period last year, needed a deal by the end of the year, he added.

Selling the Angolan assets would determine whether Cobalt needed to seek investors for its Gulf of Mexico interests, Mr Cutt explained.

Chevron, BP, Total and other big western groups pump Angolan crude, alongside Sinopec of China and several smaller companies. Mr Cutt said that 18 groups had examined Cobalt’s assets during a previous effort to sell them, though none was prepared to go as far as Sonangol.

Cobalt’s shares, which hit $35 when it announced its initial discovery in 2012, were down 25 per cent at $1.02 in early New York trading on Tuesday.