Hookers, spies, cases full of dollars…how BP spent £45m to win ‘Wild
East’ oil rights
By GLEN OWEN
12th May, 2007
BP executives working for Lord Browne spent millions of pounds on
champagne-fuelled sex parties to help secure lucrative international
oil contracts.
The company also worked with MI6 to help bring about changes in
foreign governments, according to an astonishing account of life
inside the oil giant.
Les Abrahams, who led BP’s successful bid for a multi-million-pound
deal with one of the former Soviet republics, today claims that Browne
– who was forced to resign as chief executive last month after the
collapse of legal proceedings against The Mail on Sunday – presided
over an "anything goes" regime of sexual licence, spying and financial
sweeteners.
High life: Mr Abrahams, left, and another BP executive not linked to
any impropriety with local girls 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 tells how he spent £45 million in expenses over just four
months of negotiations with Azerbaijan’s state oil company.
Armed with a no-limit company credit card, he ordered supplies of
champagne and caviar to be flown on company jets into the boomtown
capital, Baku, tobe consumed at the "sex parties".
The hospitality continued in London, where prostitutes were hired on
the BP credit card to entertain visiting Azerbaijanis.
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
oil multi-nationals seeking a share of the 200 billion barrels of oil
reservesbeneath the Caspian Sea.
While employed by BP, Mr Abrahams says he was persuaded to work for
MI6 by John Scarlett, now head of the service but then its head of
station in Moscow.
He says he was passing information to Scarlett in faxes and at
one-to-one meetings in the Russian capital.
He also claims that BP was working closely with MI6 at the highest
levels to help it to win business in the region and influence the
political complexion of governments.
Mr Abrahams worked for BP’s XFI unit – Exploring Frontiers
International – which specialises in opening 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.
"The order came from Browne’s aides to ‘get them anything they want’.
"By ‘them’, they meant local officials in Azerbaijan," Mr Abrahams
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 described 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," he said.
"Sometimes I would charter an entire Boeing 757 to carry as few as
seven staff. Their main base was the hard currency bar of the old
Intourist hotel – so named because it accepted only dollars and was
only open to foreigners.
"It was full of prostitutes 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 and where we were
going, and reported 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, andhis 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 by throwing
lavish parties. He said the Azerbaijani girls who worked in the BP
office,which occupied a floor of the Sovietskaya 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
opportunityto ask us questions about what we were up to.
"Caviar and champagne were consumed 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 a time to pay for entertaining without
ever having to account for it.
"Our local fixer was called ‘Zulfie’, who would help find girls, drink
and occasionally hashish. We always suspected he worked for the KGB,
because he was so well connected.
"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".
"I don’t believe that Browne didn’t know everything that was going
on. He came out to Baku on five or six occasions."
Mr Abrahams, who left BP in 1994, said his first marriage buckled
because of his work in Baku. He has since remarried and lives in West
London with his new wife Lana and six-year-old daughter Anastasia. He
now works as an adviser to the EU.
He said BP applied the same laissez-faire attitude to hospitality when
Azerbaijani officials came to the UK during the negotiations.
"I was given a hotline number which connected to a desk in the Foreign
Office. 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 at which Lord Browne would be
present, then he would go home and we would head off to somewhere like
the GaslightClub in Piccadilly – where girls would dance topless 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.
"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 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 oilfields.
Mr Abrahams says that a key factor in securing the deal was an £8
million payment BP made that year to SOCAR, the state-owned oil
company in Azerbaijan, for the right to use a construction yard on the
edge of the Caspian Sea.
"It was effectively a sweetener to help to secure the deal – and it
worked," he said.
Among the guests at a dinner and ceremony at Baku’s Gulistan Palace to
celebrate the Shah Deniz deal were Lord Browne and Baroness Thatcher.
Mr Abrahams says he was told to ensure that everything ran smoothly
for the event, including meeting Browne’s fastidious requirements.
"I had his favourite brand of water, Hildon, and his preferred foods
flown out in advance, and I made sure money was paid for police
escorts and to circumvent immigration procedures at the airport for
Browne and his entourage.
"That evening, he personally handed me a briefcase containing a cheque
for $30 million (£15million), to close the deal.
"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 played host to 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 – and Home Secretary John Reid, a
Shadow Defence Minister at the time.
"John flew out in the BP Gulfstream jet," he recalls.
"After dinner, we went drinking in the hard currency bar. He was
drinking a lot – this was a year before he gave up for good – and I
grew worried as it got closer to the time of the curfew imposed
because of the tense political situation at the time.
"I said, ‘Come on John, we have to get back to the hotel.’ But 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
a***.’
"With that, we were arrested and shoved at gunpoint into the back of
the van.
"It was only after I persuaded the driver to go to the hotel to speak
to the intelligence officer there that they released us. John had only
about two hours’ sleep, then was up at 5.30am to fly to the nearby war
zone of Nagorno Karabakh. He was completely hung over."
Some of Mr Abrahams’ most intriguing claims surround the alleged
co-operation between BP and the British intelligence services to
secure 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 which saw President Ayaz Mutalibov toppled by
Abulfaz Elchibey, and then to a second change a year later which saw
Haydar Aliyevtake power.
Just months after Aliyev was installed, BP signed the so-called
‘contract of the century’, a £5 billion deal which placed BP at the
head of an oil exporting consortium.
John Scarlett, says Mr Abrahams, "approached me very subtly and asked
me to help to gather information for him.
"Because my daily route to the construction yard passed the supply
routes for Nagorno Karabakh, he asked me to report on troop and
weapons movements. And BP’s deputy representative in Russia seemed
very close to the embassy, too.
"BP supported both coups, both through discreet moves and open
political support. Our progress on the oil contracts improved
considerably after the coups."
Subsequently released Turkish secret service documents claimed BP had
discussed an ‘arms for oil’ deal with the assistance of MI6, under
which the company would use intermediaries to supply weapons to
Aliyev’s supporters in return for the contract.
When the documents emerged in 2000, BP denied supplying arms –
although sources admitted its representatives had "discussed the
possibility".
A BP spokesman said last night 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."
A spokeswoman for John Reid said she had no comment and the Foreign
Office said of Mr Abrahams’ claims: "We neither confirm nor deny
anyone’s allegations in relation to intelligence matters."
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