BP Plc fired an ex-oil trader because he voiced concerns about bribes being paid in Nigeria to secure local contracts, according to a sprawling London employment suit that sheds light on the energy giant’s lucrative trading floor.
Jonathan Zarembok, who traded on BP’s West Africa desk, said that the company paid an “abnormally large” fee to a local agent to participate in a state oil tender. He alleged that BP’s traders also sought to make payments in a deal that would have been the largest the desk had ever struck in Nigeria, before the transaction was ended, according to the lawsuit.
“We were paying agents in Nigeria huge multiples of what we paid in other regions even though those agents did not perform services of any real value to BP,” Zarembok said in his witness statement. “Our proposed reasons for paying the agent these sums were a sham.”
BP argued that the payments were legitimate and were fully scrutinized by its deal governance board that included the trading floor’s most senior executives. Lawyers for the firm said that the bribery allegations were investigated and couldn’t be substantiated. Zarembok didn’t raise specific concerns about corruption at the time, BP said. Zarembok was ultimately dismissed in April 2020 because the working relationship had irretrievably broken down.
The London suit, which also names the company’s crude oil trading head Dan Wise as a defendant, highlights the issues faced by the largest oil traders when using agents to win lucrative deals. BP rival Gunvor Group Ltd. cut its use of agents in 2019 after the energy trader admitted a former employee bribed officials in the Republic of Congo to secure oil contracts.
“BP is defending in full and denies all allegations made by the claimant,” the firm said in a statement.
BP’s trading unit not only dealt with the physical cargoes of oil but also took “educated but speculative positions,” Zarembok said in his witness statement. He called it “a profit centre in its own right.”
The 15-year veteran said he and his team, focused on West Africa, were tasked with delivering around $75 million per year from trading. Zarembok was being paid bonuses of more than $3 million a year until they were cut in half for 2017 and then slashed to zero by 2019.
In Nigeria, local rules required oil firms to work with Nigerian firms if they wanted to acquire crude oil cargoes issued by Nigerian National Petroleum Corp., the country’s state oil producer. The cargoes, issued at below the market rate, were highly lucrative and BP had repeatedly missed out. In 2017, BP chose to work with a local agent rather than agree to a joint venture with a Nigerian company.
The original full article can be found at aljazeera.com