Begin forwarded message:
From: "Mario Profaca" <[EMAIL PROTECTED]>
Date: May 21, 2007 7:59:03 AM PDT
To: [EMAIL PROTECTED]
Subject: [SPY NEWS] Hookers, spies, cases full of dollars...how BP
spent L45m to win 'Wild East' oil rights
Reply-To: [EMAIL PROTECTED]
http://www.thisislondon.co.uk/news/article-23397243-details/Hookers,
+spies,+cases+full+of+dollars...how+BP+spent+%C2%A345m+to+win+'Wild
+East'+oil+rights/article.do
Hookers, spies, cases full of dollars...
how BP spent £45m to win 'Wild East' oil rights
19.05.07
When Lord Browne resigned as BP chief executive earlier this month
after lying to the courts during a failed attempt to gag The Mail
on Sunday, his supporters paid tribute to the buccaneering way he
built the company into a global oil giant.
But now a former BP employee has come forward to give the first
insider's account of what the deal-making often entailed - sex,
spying and briefcases full of hard currency...
A former BP worker has told how he threw champagne-fuelled sex
parties to help secure lucrative international oil contracts.
The company also worked with MI6 agents to help bring about changes
in foreign governments, according to an astonishing account of life
inside the oil giant.
Les Abrahams, who was involved with BP's successful bid for a multi-
million-pound deal with one of the former Soviet republics, today
claims that he witnessed an "anything goes" drive for business
which sometimes degenerated into sexual licence, spying and
financial sweeteners.
Scroll down for more...
High life: Mr Abrahams, left, and other BP executives not linked to
any impropriety partying in Azerbaijan
He also claims that Home Secretary John Reid was arrested at
gunpoint on a BP-funded foreign trip for being out on the streets
after a military curfew had been imposed.
Mr Abrahams said he helped to spend £45million of the company's
money over the course of just four months of negotiations with
Azerbaijan's state oil company.
Most of the money was spent on new offices, hiring staff in London
and the Azerbaijan capital Baku - including paying generous start-
up bonuses - public-relations work and the chartering of corporate
jets.
But he claims that more than £5million was set aside for
cultivating key local figures in Baku, with huge sums spent on
lavish entertainment.
Mr Abrahams says he was armed with a no-limit company credit card,
allowing him to arrange for supplies of champagne and caviar to be
flown on company jets to Baku, and then consumed at the "sex parties".
Former BP chief executive Lord Browne
The hospitality continued in London, where he hired prostitutes to
entertain visiting Azerbaijanis. According to the former oil
worker, he would fly dignitaries from Baku to London, put them up
at The Savoy, and take them shopping for anything they desired.
Mr Abrahams, an engineer by training, joined BP in 1991, just as
the disintegration of the Soviet Union had triggered a "new gold
rush" by the oil giants to target the 200billion barrels of oil
reserves beneath the Caspian Sea.
At the same time as he was assisting the company's drive for the
business, he says he was persuaded to work for MI6 by John Scarlett
- now head of the intelligence service but then MI6's Head of
Station in Moscow.
He passed information to Scarlett in faxes and at one-to-one
meetings in the Russian capital.
He further claims that BP was working closely with MI6 at the
highest levels to help it to win business in the region and
influence governments.
Mr Abrahams worked for BP's XFI unit - Exploring Frontiers
International - which specialises in opening up new markets in
often unstable parts of the world.
He said Lord Browne, then BP's head of exploration, allocated a
budget of £45 million to cover the first year's costs of the Baku
operation.
Scroll down for more...
Lavish hospitality: Azerbaijani translators at the dinner to
celebrate BP's £300 million Shah Deniz deal
"The order came from Browne's aides to 'Get them anything they
want'. By 'them', they meant local officials in Azerbaijan," he said.
"There were 20 or 30 people working on it at BP head office, and we
soon had a steady stream of executives coming over as negotiators.
"We got through the money in just four months, after which it was
simply increased without question."
He describes a Wild West world in which oil executives with
briefcases full of dollars rubbed shoulders with mafia members,
prostitutes and fixers and cut their deals in smoke-filled back rooms.
"The BP officials would come out to Baku in groups of five or six,
every week. Sometimes I would charter an entire Boeing 757 to carry
as few as seven or eight staff.
"Their main base was the "hard- currency bar" of the old Intourist
hotel - so named because it only accepted dollars and it was only
open to foreigners.
"It was full of girls, and many of us, including me, used them on a
regular basis, although we quickly established they all worked for
the KGB.
"If we went back to the rooms, not only were they bugged but the
girls would quiz us closely about what we were doing, where we were
going, and so on, and report straight back to their handlers.
"Everywhere was bugged and all the phones were tapped.
"One of our executives was recorded saying unflattering things
about the president, and his comments were played back to us in a
meeting with local state oil company officials.
"We were then told clearly that he was no longer welcome in the
country."
Mr Abrahams helped to forge links with the local officials
constructing the deals by throwing lavish parties.
He said the local girls who worked in the BP office, which occupied
a floor of the Sovietskya hotel, would attend the parties and
routinely provide "sexual favours".
They were also presumed to work for the local intelligence services.
"There was one girl called Natasha assigned to teach us Russian,
but it usually ended up as more that that. She would use the
intimate opportunity to ask us questions about what we were up to.
"Caviar was consumed with shipped- out champagne at the parties,
which would start in the bars but inevitably end with the girls in
the rooms.
"We had a company American Express card with no name on it which we
could use to draw out $10,000 at a time to pay for the entertaining
without ever having to account for it.
"Our local fixer, Zulfie, would help to find girls, drink and
occasionally hashish.
"We always suspected he worked for the KGB, because he was so well-
connected: his sister-in-law was director of the Sovietskya.
"A lot of the BP men's marriages went wrong. Either they ended up
with the local girls, or the wives would find out, often because
the girls would ring their home numbers "by accident".
"Lord Browne came out to Baku on five or six occasions."
Last night, speaking in Baku, Zulfie accepted that girls were often
on the scene but denied acting as a 'pimp' for the BP executives or
arranging hashish supplies for them.
Zulfie, who did not want his surname printed, said he helped to
sort out visa and Customs problems at the airport, and drove the
executives to parties with employees of Azerbaijani oil companies
in bars and restaurants.
But he claimed that financial sweeteners appeared to be
commonplace. "I didn't see any money actually passing from hand to
hand, but it has been spoken about a lot,' he said.
"I saw the briefcases with cash that the Brits had with them.
Also sometimes I was called up in the middle of the night to drive
someone to SOCAR (the state-owned oil company) immediately because
they had an "urgent meeting".
"And in a very short period - like a year - the wealth of some key
people at SOCAR increased astronomically. Everybody here knows that."
One former colleague of Mr Abrahams, who worked closely with him
during his Baku posting, said: "The Brits came here and did what
they wanted, spending company money on moving from bar to bar and
picking up girls.
"They would come away from their families and spend time with their
lovers here. The girls were very generously rewarded."
The Mail on Sunday also spoke to an executive of SOCAR, who was
seconded to BP in Baku in the Nineties. He said:
"The Brits behaved like kings here, they spent company money
loafing from bar to bar, as well as buying expensive carpets,
diamonds and antiques.
"The Azerbaijanis were so poor, they were ready to sell anything
just to get a few dollars. I was responsible for the company car
pool and I know how many vans officials ordered for their luggage
when they flew back to Britain."
Mr Abrahams left BP in 1994 and now works as an adviser to the EU
on anti-trust legislation.
He said BP applied the same laissez-faire attitude to hospitality
when officials from Azerbaijan and other former Soviet states were
flown over to the UK.
"I was given a direct hotline number which connected to a desk in
the Foreign Office which helped us to facilitate the process - it
meant visas could be granted instantly for the Azerbaijanis and
collected on arrival at the airport, rather than taking the usual
several weeks.
"We had bundles of cash to spend on them when they got here, and
could again use the corporate card without restraint.
"We would typically have a dinner for them, at which Lord Browne
would be present, then he would go home and we would head off to a
gentleman's club where girls would come and dance topless for you,
and you would get charged £250 for your drink.
"Our guests would usually want girls to go back with afterwards.
Sometimes we could persuade the girls in the clubs, but more often
we would just phone up an escort agency and arrange for the girls
to go to the hotels. We could charge them straight to the BP Amex
card.
"But it sometimes became problematic. One group of Khazak Oil
officials stripped their hotel rooms in Aberdeen completely bare,
including the sheets and pillowcases, and they would usually clear
out the minibars wherever they were staying."
All the entertaining paid off in September 1992 when BP signed a
£300 million deal to exploit the Shah Deniz oil fields.
Mr Abrahams says that a key factor in securing the deal was an
£8million payment BP made that year to SOCAR, in Azerbaijan, for
the right to use a construction yard on the edge of the Caspian Sea
called the Shelf Project.
"It was effectively a sweetener payment to help to secure the deal
- and it worked," he said.
Lord Browne and Baroness Thatcher were among the guests who flew
out to Baku for a dinner and signing ceremony at the Gulistan
Palace to celebrate the Shah Deniz deal.
In the weeks running up to the dinner, Mr Abrahams says he was
detailed to ensure that everything ran smoothly for the event,
including making sure Browne's fastidious requirements were met.
"I had his favourite brand of water, Hildon, and his preferred
foods flown out in advance, and I made sure the money was paid to
arrange police escorts and to circumvent immigration procedures at
the airport for Browne and his entourage.
"That evening, he personally handed me a briefcase with a cheque
for $30million, to close the deal, which I kept safe until the
ceremony.
"He was so keen to wear a particular shirt, which he had left at
the airport, that I persuaded the chief of police to close off the
roads so his cavalcade could go via the airport to collect it."
In 1993, Mr Abrahams hosted a group of MPs who visited Baku as
guests of BP, including Harold Elletson - then a Tory MP, but now
an adviser to the Liberal Democrats foreign affairs team - and Home
Secretary John Reid.
Elletson was later accused by renegade MI6 officer Richard
Tomlinson of being an MI6 agent. Friends of Mr Elletson did not
deny those claims last night.
But it was the visit of Reid, then a Shadow Defence Minister, that
proved most memorable - for all the wrong reasons. "John flew out
in the BP Gulfstream jet," recalls Mr Abrahams. "After dinner, I
went drinking with him in the hard currency bar.
"This was during the period when he was drinking a lot - a year
before he gave up for good - and I grew more and more worried as it
got closer to the time of the curfew which had been imposed because
of the tense political situation at the time.
"I said, "Come on, John, we have to get back to the hotel." As we
left, he was swaying around and being very noisy.
"I urged him not to draw attention to us, because we weren't meant
to be still on the streets. But then a van load of police armed
with Kalashnikovs pulled up and asked us what we were doing.
"He said, "I am a British politician..." I urged him to be quiet,
but then he said to one of the policemen, "If you don't take that
f***ing Kalashnikov out of my face I'm going to stick it up your
f***ing arse." With that, we were arrested and shoved at gunpoint
into the back of the van.
"It was only after Zulfie "had words" with the police that Reid was
released. John only had about two hours sleep, then was up at
5.30am to fly to the battle lines in the nearby warzone of Nagorno
Karabach. He was completely hungover."
Zulfie confirmed that he arranged the release of a British
politician, but can't remember his identity.
Some of Mr Abrahams' most intriguing claims surround the alleged co-
operation between BP and the British intelligence services to boost
the company's fortunes by securing a more pro-Western, pro-business
regime in the country.
He says the operation, masterminded by Scarlett in Moscow,
contributed to the coup in May 1992 that saw President Mutilibov
toppled by Abulfaz Elcibay, and then to a second change a year
later which saw Haydar Aliyev take power - a move welcomed by the
UK and US governments.
Just months after Aliyev was installed, BP signed the so-called
'contract of the century', a £5billion deal that placed the firm at
the head of an oil exporting consortium.
Mr Abrahams added: "John Scarlett, the MI6 Head of Station in
Moscow, approached me very subtly and asked me to help to gather
information for him.
"Because the daily route taken to reach the oil construction yard
passed the supply routes to the Nagorno Karabach warzone, he asked
me to report on troop and weapons movements to him.
"There was also BP's deputy representative in Russia, who seemed
very close to the embassy. She always came down to Baku with UK
Government officials. During this time, all communications to and
from the UK Government would come through the BP office.
"BP supported both coups, both through discreet moves and open
political support,' said Mr Abrahams. "Our progress on the oil
contracts improved considerably after the coups."
Subsequently released documents from the Turkish secret service
claimed that BP had discussed an "arms for oil" deal, with the
assistance of MI6, under which the company would use intermediaries
to secure weapons to pass to Aliyev's supporters in return for the
subsequent contract.
When the documents emerged in 2000, BP denied supplying arms -
although sources admitted that its representatives had "discussed
the possibility".
When the allegations were put to MI6, a Foreign Office spokesman on
security matters said: "We have no comment to make on intelligence
matters." A BP spokesman said of Mr Abrahams' claims:
"There are some facts in his account that are accurate, but we
don't recognise most of it. We regard it as fantasy."
Another BP source said Mr Abrahams was effectively an office
manager for BP's exploration arm, and had exaggerated his seniority
at the firm.
He had played "absolutely no part" in negotiations for contracts,
which, the source insisted, were secured entirely legitimately.
The source insisted that Mr Abrahams' account was "utter rubbish",
but declined to specify which of his claims were inaccurate.
A spokeswoman for John Reid said she had no comment to make.
Les Abrahams is writing Our Man In Baku, a memoir of his
experiences in Azerbaijan, with Nicholas Monson.