US businessmen are close to exploiting Ethiopia’s oil plans in a multibillion-dollar scheme

[Deeq A.]

REUTERS/ANDREW HEAVENS (ETHIOPIA)
On the plains of Ethiopia’s Somali region, outside the regional capital of Jijiga.

An Ethiopian-American investor and his partners are on the brink of pulling off an elaborate scheme that may unfairly take advantage of Ethiopia’s long-held ambitions to build its own oil & gas industry and become energy independent.

Nebiyu Getachew, 48, chief executive of GreenComm Technologies, a Virginia-based energy firm, signed a $3.6 billion deal with Ethiopia’s ministry of Mines and Petroleum on April 28 to construct an oil refinery in Ethiopia’s oil-rich Somali region.

But checks reveal little evidence GreenComm Technologies and its key executives have the expertise or experience to take on this major project. The company has no known industry credentials and has been delisted from the Virginia corporate database on two occasions, likely for failure to pay company registration fees on time.

A government whistleblower with extensive knowledge of Ethiopia’s oil and gas industry approached Quartz Africa after documenting numerous irregularities with the planned cooperation between the ministry and GreenComm.

A subsequent probe by Quartz Africa found the company has made a number of misleading claims in an attempt to portray itself as an energy industry leader. It has also been established that when the company signed the April 28 agreement it was effectively nonexistent having lost its corporate status in November 2019 only to be reinstated in September this year.

It’s unclear if the project will get off the ground and the deal may derail Ethiopia’s oil extraction plans and possibly see the Horn of Africa country incur enormous financial losses.

A screenshot of GreenComm Technologies’s “Meet the team” website page. It features CEO Nebiyu Getachew and COO Warren Negri

For decades, Ethiopia has sought to exploit its abundance of hydrocarbon resources, estimated to be as much as 8 trillion cubic liters in crude oil reserves, largely located in the country’s east. But extraction hopes have encountered a plethora of difficulties, among them, the country’s oil-rich Somali region being home to a number of armed rebel groups since the 1980s.

In recent years, violence in the region has subsided but poor management, questionable agreements with foreign oil companies and reported corruption also hinder Ethiopia’s extraction aspirations. The country is yet to make serious use of its oil resources which have long been touted as poised to revamp the country’s economy.

Due diligence

A lack of regulation enforcement and a weak vetting mechanism has seen Ethiopia’s mining and petroleum sectors taken advantage of by international businessmen with questionable expertise.

Back in 2003 a Jordanian company, Si Tech International, was granted an Ethiopian petroleum production license that was revoked three years later after the company reportedly failed to meet standards. In 2013, despite being dogged by corruption and bribery allegations in Liberia, Israeli businessman Jacob Engel managed to land a tantalum mining contract overlooking the Kenticha mine in Ethiopia’s Oromia region. Engel’s company, Elenilto later had its deal with Ethiopia rescinded by June 2015, after it too had its expertise called into question.

Despite this record, the 2020 agreement suggests proper vetting for license applicants remains inadequate. “I’m aware that GreenComm don’t have the expertise,” says Mulugeta Damtew Seid, who heads the government-run Ethiopian Mineral, Petroleum and Biofuel Corporation (EMPB). “But GreenComm made it clear that they wouldn’t handle the project themselves. We were told that they planned on buying the required technology from a third party.”

“They were merely a financial company that sought to sponsor the construction of the refinery through an intermediary,” he says. “From what I have determined personally, they have no ability to carry out such infrastructure projects themselves.”

EMPB is a government-owned extraction company founded in 2016 as the government’s attempt at creating its own enterprise of extraction experts who would work in the country’s interests.

Mulugeta’s statements might be deemed consistent with GreenComm’s claims the project would be jointly overseen with Korean company Hyundai Engineering and Construction. The Korean construction giant was said to have struck a partnership with GreenComm Technologies, according to a report by Ethiopian state broadcaster Fana Broadcasting Corporate (FBC) published on April 28, the day of agreement.

But Hyundai officials clarified in an email to Quartz Africa, that it has no involvement whatsoever with the GreenComm project. The Korean company revealed it had been approached by GreenComm, but after some due diligence, it decided against working with the company in late 2019.

“We wish to clarify that Hyundai Engineering and Construction did not sign any kind of agreement and/or contract with GreenComm Technologies,” Jinyoung Choi, a press officer at the company wrote. “Greencomm did not reply to our request to provide due diligence documents to verify legal and financial status of the company.”

Choi also revealed that Hyundai went a step further with its own digging.

“Hyundai Engineering and Construction outsourced an investigation and found out that GreenComm had no active operations. Therefore, we asked GreenComm not to publicize our name in any press release without our written notice in December 2019.”

There is no mention of any other third party involvement in media reports besides Hyundai, which declined involvement some four months before the agreement was signed in April something Mulugeta Damtew Seid and other Ethiopian government officials would have found out had they reached out to the Korean entity.

Nebiyu Getachew is listed on the GreenComm Technologies website as having served as chief executive for over a decade and for over two decades as a “senior level executive and advisor to Fortune 500 companies.” However, a background check reveals his only ties to any Fortune 500 company is his employment at a Toyota dealership in the DMV(Washington DC, Maryland, Virginia) area.

Nebiyu was first reported as making the refinery pitch to Ethiopian authorities in 2018. At the time, the project was evaluated at $2 billion. GreenComm Technologies were reported as making a joint proposal with another US company, Innovative Clear Choice Technologies (ICCT) to build the refinery that would process gas to liquid petroleum.

Neither company had an office at the time, with both companies based out of private residences in Virginia and Texas respectively. Public records show that by September 2018, the two companies had merged into a single oneheaded by Nebiyu Getachew.

Despite the red flags, Andargie Bekele, EMPB’s petroleum exploration director, told private Ethiopian newspaper The Reporter in March 2018 that his office had vetted both companies and had found nothing wrong.

But by February this year, both Greencomm Technologies and ICCT had ceased to exist as companies, with ICCT’s cancellation due to its inability to pay required taxes. Greencomm referred to itself as a “global leader in renewable energy and sustainability” on its LinkedIn profile despite there not being any evidence of a single completed project anywhere in the world.

But files available at the Commonwealth of Virginia State Corporations Commission, show that Greencomm Technologies had its US registration canceled in November 2019, also due to an inability to meet company registration requirements. The company was reinstated on Sept.17. Records show this was the second time since 2014 that the company’s was canceled from the state registrar, putting into question Nebiyu’s claim of having been CEO for over a decade of a frontrunner excavation company.

The company’s official website “Meet the team” section also raises questions. GreenComm boasts a staff of globally renowned professionals with decades of experience under their belt. Profiles with header pictures of members of GreenComm’s “managing partners” and an “Asia Division” feature poorly cropped pictures of mostly middle-aged American men and three Asian men in suits portrayed as industry leaders with decades of experience manning Fortune 500 companies. Searches on some of the named executives lead to dead ends or unverifiable credentials.

The Asian executives listed are the only ones with claimed extensive oil & gas industry experience.

Among these, GreenComm lists “Kae, Chungmu” as having 50 years of experience and having developed oilfields in Yemen, Korea, Indonesia, and even the US as part of prominent corporations such as Hunt Oil and the Korean National Oil Corporation, where it is said he “purchased 23 million barrels of crude oil.”

But Ambassador Jeanne L Phillips, who heads corporate engagement at Hunt Oil confirmed to Quartz Africa that the claim on the website of Kae Chungmu being a former Hunt Oil staffer is false. “We have no record of this gentleman ever working as an employee for Hunt Oil Company in Yemen or anywhere else in the world,” she wrote in an emailed reply.

Using facial recognition apps, the individual’s face was traced to the LinkedIn profile of a man named Chungmu Kae. His profile lists him as an employee for an NGO and not the petroleum exploration guru he is portrayed as.

It is similar for “Chang Buk Sung,” the man depicted as the “chairman and CEO” of the Asia Division. The GreenComm website lists him as having 30 years of experience with an unnamed Fortune 500 company. But his LinkedIn profile lists his oil and petroleum exploration experience as being limited to a position with Lamplighter Energy, a self-described energy firm which hasn’t filed annual reports in two years and is listed as “not in good standing” by the state of Hawaii.

But the website does list at least one oil executive as being affiliated with GreenComm. Dr. Seong Hoon Kim, listed as president of the Asia division is the former vice president of the Korean National Oil Corporation, a South Korean state-owned oil exploration company. In 2010, Dr. Kim was interviewed by Reuters, shortly after his purchase of a British petroleum company for $2.6 billion.

There is nothing in the public domain establishing any link between the former oil industry tycoon, Dr. Seong Hoon Kim and GreenComm and Quartz Africa was unable to reach him ahead of the story.

Warren Negri, who is listed as GreenComm’s chief operating officer, is also connected to Nebiyu Getachew through another Virginia-based entity, Polaris Energy Resources, described as a solar energy company. Like with GreenComm, its website lists both executives as CEO and COO. The two companies also share three other executive team members.

Though it claims to be a solar energy company, Polaris also engages in gas exploration, according to the website. It lists an address in Addis Ababa as being the headquarters of Polaris’ “international office.” Like GreenComm’s its website does not feature any completed major projects, meaning Nebiyu Getachew is currently head of two US energy firms that are yet to get off the ground.

Fact-checking

Despite the misleading claims, the dissolution of both ICCT and GreenComm Technologies, the existence of a nearly identical company in Polaris; the false claims of a non-existent partnership with Hyundai; and a CEO having no experience in the industry whatsoever, Nebiyu Getachew was still able to seal the multibillion-dollar deal with the Ethiopian government in April.

“Upon (the project’s) completion, no longer will Ethiopia remain dependent on imported fuel consumption,” Nebiyu Getachew was reported as saying.

Signing the deal on behalf of GreenComm, was Emanual Mekuria, better known in the local music scene from his time as owner of a popular jazz club in Addis Ababa, he is now listed as GreenComm’s “Ethiopia business development director.” He told state media on the day of the agreement that the refinery project would create over 10,000 job opportunities.

Despite the well-documented involvement of international companies or individuals lacking ability and experience in Ethiopia’s resource excavation sectors, it appears pre-emptive measures have yet to be implemented.

The Reporter’s first story from 2018 quotes EMPB’s then petroleum exploration director, Andargie Bekele, confirming he had examined both GreenComm Technologies and the now defunct ICCT. “We checked the profile of the companies, reviewed the feasibility study and studied the GTL technology,” Andargie said. “We reviewed the finance, technical, and legal matters which we found it to be viable.”

Quartz Africa managed to recently reach Andargie Bekele, who now works as a legal advisor for EMPB. He was asked about how despite the multiple warning signs about GreenComm he okayed its proposal. “We shouldn’t scare off a company just because things look a bit puzzling,” he told Quartz Africa. “There could still be something that can benefit Ethiopia, even in the short term. Besides, multiple institutions other than ours, approved the proposal.”

Mulugeta Damtew Seid of the Ethiopian Mineral, Petroleum and Biofuel Corporation, who told Quartz Africa he was made to believe GreenComm Technologies would only finance the operation, is named as being among those who examined the proposal in 2018.

“Both GreenComm Technologies and ICCT came with a joint proposal in 2018. We were discussing technical issues when the Ministry of Mines decided to take over in 2019,” Mulugeta told Quartz Africa. “We were no longer involved after that.”

When told that one of the two companies, ICCT had dissolved, Mulugeta expressed surprise. He reiterated that he assumed that GreenComm Technologies was just a funder for a project that would have Hyundai boots on the ground.

But Hyundai won’t be involved. Even if they were, and GreenComm Technologies were simply out to fund the project, it would still contradict what the company implies in its name and with what GreenComm Technologies have published on their website. Repeatedly referring to itself as an energy firm that’s “powering the globe,” it lists “renewable energies” and “agriculture” as company specialties in its capabilities section.

When asked why the claims on the GreenComm website did not warrant increased scrutiny, Mulugeta said GreenComm ushered things through thanks to support from the upper echelons of Ethiopian government, including the prime minister’s office and Ethiopia’s current ambassador to the US, Fitsum Arega.

“When things slowed, they sent a complaint to the prime minister’s office, claiming that they were being obstructed. They know people,” said Mulugeta. “Then Ambassador Fitsum wrote a letter in which he stated that they are a reliable company worthy of being allowed to operate in Ethiopia. Ambassador Fitsum endorsed the company both while he was still working in Addis Ababa and later when he became Ambassador to the US.”

Ambassador Fitsum Arega is yet to respond to an email seeking clarity into the claim.

The agreement was signed some five months after GreenComm Technologies had its Virginia registration canceled, its existence as an American company effectively scrubbed. The deal may thus have no legal legs to stand on, as it was signed while the company was not a recognized functioning entity and could open the door to a termination of the deal with Ethiopia incurring no financial penalties.

Signed four months after Hyundai clarified it wanted no part in it, the Ethiopian mines & petroleum minister put pen to paper at a ceremony attended by reporters.

That minister, Samuel Urkato Kurke suddenly left his post in August without explanation and was appointed the new minister of Science and Higher Education. His old post was taken over by the mayor of Addis Ababa, Takele Uma.

Ethiopian state media photographed Samuel Urkato penning the controversial $3.6 billion agreement with GreenComm Technologies. But when Quartz Africa reached him by phone recently, he was unwilling to discuss what he knew about the company. “I know about the deal, but I am no longer at that ministry. You should discuss with those presently there.” He abruptly hung up.

With him on the day of the agreement was Dr. Ketsela Tadesse, the then director of Petroleum Licensing at the ministry. He had previously provoked the ire of locls for denying that toxic waste leaked by a Chinese oil company was poisoning Somali villagers living near the project site. After the agreement was inked and with state media cameras rolling, Dr. Ketsela, spoke glowingly of GreenComm Technologies, to whom he had awarded an operating license.

Quartz Africa learned that shortly after the April agreement, Dr. Ketsela retired from his position.

Dr. Ketsela was reached by phone and asked about his own role in permitting the company to set up shop in Ethiopia. But like Samuel Urkato, he declined to discuss the matter.

“Such inquiries should go through the ministry. I will not discuss this as it would be against protocol since I’m no longer affiliated with them,” Dr. Ketsela said.

The current petroleum minister Takele Uma, who is just months into the role, was sent a detailed email by Quartz Africa, with links to stories by both state and private media, inquiring about the current status of the deal with GreenComm Technologies.

Takele Uma denied any knowledge of the deal his office made in a one sentence address of the inquiry. Despite the media reports and the $3.6 billion value of the proposed gas to liquid refinery he claims he is completely unaware of the existence of the deal.

“Regarding the agreement, I don’t have any clue,” says the minister in an email response.

As of writing, GreenComm Technologies executives Nebiyu Getachew and Warren Negri are yet to formally respond to written queries on the matter.

Whether or not Ethiopian government officials were complicit in ensuring the GreenComm scheme would be a success cannot be established thus far. But it would be even less reassuring if the opposite were true as it would mean the deal was the result of a lack of due diligence by multiple institutions and government officials. Either way, Ethiopia’s oil production aspirations appear unlikely to be realized in the short term.

Source: Quartz Africa 

The post US businessmen are close to exploiting Ethiopia’s oil plans in a multibillion-dollar scheme appeared first on Puntland Post.