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Hookers, spies, cases full of
dollars...how BP spent £45m to win 'Wild East' oil rights
By GLEN OWEN
05/13/07 "Mail
On Sunday" --- - 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.
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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, to be 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 reserves beneath 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, 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 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 opportunity to 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 Gaslight Club 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 Aliyev take 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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