Saturday, October 23

BP Trader Dealings With Nigerian Middleman’Didn’t Smell Right’


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By Jonathan Browning and William Clowes

(Bloomberg) —

A BP Plc executive told internal investigators he was concerned about the energy giant’s dealings with a Nigerian middleman and payments being discussed to secure lucrative contracts.

The suspicions didn’t make it into the investigators’ final report, which emphasized that the 2017 deal never went through. But notes from their interviews show a senior executive at the company’s London headquarters was worried that proposed payments to an agent in the West African country would be used for bribes.

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When an agent demanded a payment of $5 million to help facilitate what was set to be the biggest deal BP’s traders had ever done in Nigeria, the head of origination for the region, Chris Schemers, told investigators that he said to his team the agent wants the money “so he could pay someone off.”

The documents have come to light in a mammoth employment suit that is running yards from BP’s trading floor in London’s Canary Wharf and highlights the level of internal nervousness surrounding the role of agents in oil trading.

“And he wants upfront, didn’t smell right to me,” Schemers said, according to the documents prepared for the London employment tribunal that’s poring over allegations of bribery and trading losses in BP’s crude trading team.

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The team “needed to be super careful” and he had a “bad feeling” about the middleman, Schemers said.

Those notes from Schemers’ interview didn’t make the final report, codenamed Project Topaz, when it was circulated some six months later in the summer of 2019.

Schemers, who left BP in March 2019, told investigators that there was no “smoking gun” to prove corruption, but he’d worried that the agent was just a “one man band.”

He didn’t respond to a message requesting comment on LinkedIn.

Jonathan Zarembok, who worked on BP’s West Africa trading desk, sued BP in the UK saying he was deemed a troublemaker for raising concerns about transactions in the run up to Nigeria’s most recent elections in 2019. He’s seeking to have his multi million pound bonuses that were slashed in half and then cut to zero restored.

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BP never did make the payments to the agent — with other executives suggesting that the agent was demanding too high a fee that threatened the economics of the deal. The company has argued in the legal suit that Zarembok never raised corruption concerns at the time. The report concluded there was a “disconnect” between what had really happened and the allegations made by the trader.

In Nigeria, local rules required oil firms to work with Nigerian firms if they wanted to acquire crude oil cargoes marketed by Nigerian National Petroleum Corp., the country’s state oil producer.

“It is widely known in the oil trading community that the Nigerian political parties use NNPC as a means to funnel money into political campaigns,” Zarembok said in his witness statement prepared for the six-week trial.

“BP is defending in full and denies all allegations made by the claimant,” the firm said in a statement. It declined further comment, including on Schemers.

BP separately made payments totaling $900,000 to another agent to participate in a state oil tender.

Zarembok was ultimately dismissed in April 2020 because the working relationship within the team had irretrievably broken down, BP has said.

©2021 Bloomberg LP

Bloomberg.com

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