Foreign energy companies such as US-based Halliburton and its former subsidiary KBR Engineering used the services of a politically-connected businessman to obtain contracts in Azerbaijan, according to an investigation by Australia's Fairfax Media and the Huffington Post.
The investigation relies on a "massive leak" of documents from Monaco-based Unaoil Company and spans several countries, including Azerbaijan, Kazakhstan, Uzbekistan, Turkmenistan, Libya, Syria, Yemen, Kuwait, Iraq and the United Arab Emirates (UAE).
The Azerbaijani oil sector is notoriously opaque, and is dominated by oil major BP, which has been producing and exporting some 80% of the country's oil since it signed a production sharing agreement (PSA) with the Azerbaijani government in 1994. How BP and Azerbaijan's national oil company Socar award contracts for offshore oil and gas services remains a guessing game.
Companies such as Halliburton and KBR Engineering have been awarded contracts worth hundreds of millions of dollars in Azerbaijan over the last decade. Both companies have been repeatedly fined by US authorities for bribing foreign officials.
The document leak focuses on businessman Mohammad Reza Raein, the managing director of Unaoil Azerbaijan, and his ties to the ruling elites in Azerbaijan, such as President Ilham Aliyev, energy minister Natiq Aliyev.
A former New York socialite who was known for his sense of style, Raein reportedly became close to Azerbaijani elites in the 1990s. In a 1999 memo outlining the decision to appoint him and Unaoil as their representative in Azerbaijan, KBR Engineering mentions that he was "very close to the president and his family" and had "access to every office in the country".
In 2007, however, Raein's connections became a source of concern for KBR Engineering, because of US anti-corruption laws. A memo from 2007, however, claimed that Raein had no "improper influence over officials. Rather, these contacts appear to be the result of familial and business ties developed over time without the benefit of illicit relationships".
Unaoil documents leaked to Huffington Post and Fairfax Media indicate that Raein had obtained confidential information from government sources, including a source named "V1" who worked for Socar. V1 is allegedly Valeh Aleskerov, former deputy speaker of parliament, who is said to have collaborated on Unaoil's projects at least until 2011. There were two other government sources that were leaking information to Unaoil's clients Rolls Royce and KBR through Unaoil and that were coded as V2 and V3 in email exchanges. It is believed that V2 and V3 were senior officials in Socar, possibly vice presidents.
“The other discussions I had were not so important, apart from the fact that V3 seems to be sidelined by V2 who is back in the frame. V3 seems not be able to provide any help at all since V2 came back to Socar !!!!!!!!” Unaoil executive Peter Willimont wrote in a 2006 email. “V1 still has his job in Socar [Azerbaijan oil company], but as you are aware has been elected (if you can call it that) to Parliament and is Deputy Speaker, with special responsibility for Ecology,” another email said.
Leaked emails from Unaoil indicate that Raein, who was an old friend of the company's founding family, was paid $4.5mn for his work in Azerbaijan between 1996 and 2005 plus expenses. Investigators found that Raein repeatedly asked Unaoil to deposit tens of thousands of dollars into different bank accounts, including some that were not his. Sometimes he asked for money to go to a fashion house, or for amounts of up to $50,000 to be wired to his American Express card account, until Unaoil's banks and executives began to question his use of funds in 2006.
“I have an issue with this kind of transfer. The fact that we have done it in the past is irrelevant - we need to clean up our house from all angles,” Saman Ahsani, the son of Unaoil's founder, wrote in an email. “We should pay COIC [Raein's company] and they can then pay who they like.”
The investigation also reveals the lobbying power of Reza Vaziri, the CEO of the only functional gold mining company in Azerbaijan, Anglo Asian Mining, which is listed on the London Stock Exchange. The Iranian expat Vaziri is an American citizen, and sat "alongside former US state secretaries James Baker and Henry Kissinger on the board of the highly respected US-Azerbaijan Chamber of Commerce," the investigation reports.
He began assisting Unaoil in 2001. In a leaked email, he was described as being able to set up meetings with Azerbaijan's Prime Minister Artur Rasizade and Energy Minister Natiq Aliyev "anytime" and to get Aliyev to say "exactly what we want".
The leaked Unaoil files show Vaziri provided inside information from a “friend” in Azerbaijan about project milestones and shortlists of bidders for work on a major pipeline project connecting several countries in the Caspian region.
In 2004, he received $400,000 from Unaoil for his work; the money was paid to his Swiss-based company Marian. He continued to work for Unaoil in Azerbaijan "at least until 2009", the investigation concludes.
Rating agency Moody's upgraded the long-term foreign and local currency deposit ratings of Azerbaijan's largest lender, International Bank of Azerbaijan (IBA), on July 25 from 'Caa2' to 'Caa1'. ... more
Azerbaijani President Ilham Aliyev and Russian President Vladimir Putin held an unannounced meeting in Sochi on July 21, according to RIA Novosti press agency. The two heads of state reportedly ... more
KPMG Azerbaijan, a subsidiary of the Big 4 consultancy, will be audited by Azerbaijan's public Auditing Chamber, Turan news agency reported on July 22 citing Akram Hasanov, the head of the ... more