Mr A was a Lebanese individual in his fifties. He was an unsmiling man of a most dangerous and unsavoury type, but he had something very interesting to offer . . .

Mr A contacted several Western oil companies offering to sell a substantial carried interest in a gas project in the Gulf.  A carried interest means that, while you take your share of production, your share of the costs is paid by the other participants in the project. So a carried interest is very much more valuable than a paying interest. By our calculations the carried interest represented more than forty per cent of the entire value of the project.

In Europe we pretend that nationality does not matter, but in the Gulf it does. How does a Lebanese businessman come to hold a valuable interest in a gas project in a Gulf state?

His story was that he had been the architect of the entire project, and that the carried interest was his reward from the Ruler.  He had documents which, if genuine, showed that he owned this interest. He insisted throughout that he was a principal, not acting for anyone else. He did not demand a retainer or success fees. But he wanted top dollar for the interest. 

Mr A operated out of a discreet serviced office in the west end of London. He had no files, computer or printer, just a telephone, fax machine and shredder. 

Mr A demanded absolute secrecy, and backed this with threats: “it will be bad for your health if you tell anyone about this”.  Despite his insistence that he was a principal, he habitually used a sinister and unexplained “we”: “we will not be happy if it turns out you are wasting our time”.

We made enquiries from our friends in the Gulf. The word was that the interest in the gas project belonged to a Sheikh who was also a Government Minister. He had decided to cash out and Mr A was the stooge selling the interest on his behalf.

Now everything made sense. Mr A received his instructions from the Sheikh by fax. Mr A signed the fax to acknowledge receipt, faxed it back to his principal, and then shredded it. This left the Sheikh with a complete paper trail, but no incriminating evidence at all in London.

Paying Government officials is illegal, so if you become entangled in a transaction like this you risk not just broken arms and legs but a substantial prison stretch. 


See also:  Laurel and Hardy


Chris Thorpe

Chris Thorpe is a respected independent lawyer in the upstream oil and gas industry, and an established lecturer and author. Chris has a LLB in law from Magdalene College, Cambridge and trained as a barrister in London. He worked for eight years' as an in-house lawyer for BP and Marathon. Since 1991, Chris has run his own upstream legal practice, CPTL, which has acted for many upstream clients. He has extensive experience of international upstream transactions, principally in the North Sea, the FSU, Africa and the Middle East. Chris has spoken at many UK and International Conferences and Seminars, both public and in-house. His most popular current lecture is Fundamental of Upstream Petroleum Agreements, a two-day course with accompanying book.