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Hookers, spies, cases full of dollars...how BP spent 45m to win 'Wild East' oil rights

By GLEN OWEN - More by this author Last updated at 11:16am on 20th May 2007

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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.

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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".

Lord Browne

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.

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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.

Comment Add your comment | View all Comments (4)

4 people have commented on this story so far. Tell us what you think below.

Here's a sample of the latest comments published. You can click view all to read all comments that readers have sent in.

I'm very sorry about what happened to Jacqueline and her family. However, it doesn't make all girls in Baku, prostitutes. Most of them are decent, honest and respectable girls.

- Nara Morrison, Aberdeen, UK

Good luck to the BP ship and all who sail with her.

- Mike H, Baku, Azerbaijan

My husband works for BP out in Azerbaijan and was foolish enough to get involved with a 'Local girl' who worked in the BP office. As a result my children lost the daddy they adored and I lost the man I thought was my soul mate. I have since found out that many of the western men working out in Azerbaijan have wives and partners here but think nothing of taking a local girl as a 'girlfriend', however these girls are nothing more than prostitutes flattering very foolish men with large wallets!

- Jacqueline Peek, Chatham UK

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