This article is more than 4 years old

This article is more than 4 years old

BP signed a multimillion-dollar contract for work in Iraq with a firm that had been linked to corruption allegations in the country one year previously, the Panama Papers reveal.

A document included in the leak from the offshore law firm Mossack Fonseca reveals that in 2014 the oil company hired Unaoil to undertake work at the Kirkuk oilfield in northern Iraq.



Unaoil found itself at the centre of an international bribery scandal earlier this year after its own leak of internal emails resulted in raids directed by the Serious Fraud Office.

The Monaco-based company was first named in connection with corruption allegations in an investigation by the Sydney Morning Herald in 2013. The newspaper alleged that Leighton Holdings, an Australian construction firm, had paid “kickbacks” to Unaoil via a vastly inflated $87m (£60m) contract for work in Iraq.



But a few months later BP had signed a $1m contract with Unaoil, the first of two for engineering services related to the Kirkuk oilfield in Iraq. The second contract, signed in August 2014, was valued at $6m.



The signing of the contract raises questions about whether BP carried out proper checks into the suitability of conducting business with a company that had been accused of involvement in corruption in Iraq.



BP did not directly address questions about what checks it completed and what recommendations resulted.



In response to questions from the Guardian, BP confirmed it had contracted Unaoil for engineering services related to the Kirkuk oilfield, but declined to respond in detail to queries about whether its compliance department had approved or advised upon the deal.



“We take allegations against contractors very seriously, review them, and take action based on the findings of our reviews,” the company said.

“BP requires compliance with anti-corruption laws and does not tolerate corruption in any form. Our ethics and compliance programme employs anti-corruption safeguards, such as performing due diligence on prospective suppliers, contractually requiring them to comply with relevant laws and requiring them to maintain their own internal safeguards.”

Unaoil said: “Following the allegations published in 2013 by the Sydney Morning Herald, BP conducted an exhaustive due diligence review of Unaoil before awarding these contracts.”



“The contracts were awarded to Unaoil as it had people on the ground who could operate in this difficult and challenging environment (even with the presence of Isis) and undertake survey work to support the project and add value to BP by increasing significantly the speed at which activities were completed.”



Unaoil stressed that no part of the payment was intended to finance commissions of payments to officials in connection with the project.



Although headquartered in Monaco, a number of Unaoil’s companies and subsidiaries were incorporated in the British Virgin Islands. As registered agent, Mossack Fonseca would forward any post received by the offshore companies to the firm’s Monaco headquarters.

A document forwarded by the firm reveals that in April 2015 BP extended its second contract with Unaoil for a further three months.



In March, the Age, a sister title of the Sydney Morning Herald, published a series of articles alleging that Unaoil had systematically corrupted the global oil industry, distributing millions of dollars’ worth of bribes on behalf of corporate firms.

The Age said its reporters had drawn on hundreds of thousands of documents between 2002 and 2012 for its six-month investigation. The allegations have been denied by Unaoil, which says it has never secured contracts by paying bribes to officials or politicians.

Shortly afterwards, the authorities in Monaco raided the headquarters of Unaoil and the homes of some of its bosses. Monaco’s government said the raids resulted from an urgent request for assistance from the Serious Fraud Office.

“These searches and interviews were carried out in the presence of British officials as part of a vast, international corruption scandal implicating numerous foreign oil industry firms. The information collected is going to be examined by the British authorities as part of their investigation,” the Monaco government said at the time.