The Men in Black

I was hard at work in my office one morning, when two me in sharp black suits knocked on my door.  This was itself a little unusual as the door was wide open.

They said they were from internal audit, and needed to ask me some questions.

The internal auditors of a large oil company are its internal investigators and police force.  The company’s business developers and dealmakers seldom encounter them.  When you do, they seldom bring good news.

They declined a seat, and asked me to confirm who I was.  They then asked about a cheque for £13,500 payable to a firm of shipping solicitors in Cardiff, which I had requisitioned the previous week.

Briefly, the story was this.  A chemical tanker chartered by us had been arrested in port by creditors of the ship owner.  Some people may be surprised to learn that it is possible to arrest a ship, or an aircraft, as well as a human being.

The dispute did not involve us, but to enable the tanker to leave the port with our cargo, we agreed to pay the freight into an escrow account with a firm of solicitors.  The freight would stay in this account while the rivals fought over which of them was entitled to it.

The problem was simply that this firm of shipping solicitors was not on the company’s approved list of outside lawyers or contractors.  So the internal audit computer system had picked this out as an unauthorised and potentially fraudulent transaction.

They thanked me for my help, photocopied the whole of my file, and then left as quietly and politely as they had arrived.



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.