Financial Markets

Real world dealing . . . .

BP lobbied Jack Straw before he changed mind over Lockerbie bomber

Sep 4th, 2009 by John Donovan.

Tom Baldwin and Philip Webster

Jack Straw was personally lobbied by BP over Britain’s prisoner transfer agreement with Libya just before he abandoned efforts to exclude the Lockerbie bomber from the deal.

The Times has learnt that the Justice Secretary took two telephone calls from Sir Mark Allen, a former M16 agent, who was by then working for BP as a consultant, on October 15 and November 9, 2007.

Having signed a $900million oil exploration deal with Libya earlier that year, BP feared that its commercial interests could be damaged if Britain delayed the prisoner transfer agreement (PTA) through which the Gaddafi regime hoped to secure the return home of Abdul Baset Ali al-Megrahi.

For six months talks with Libya were deadlocked as Britain — under pressure from the devolved Scottish government — vainly sought to ensure the PTA would not cover al-Megrahi.

On December 19, 2007, Mr Straw wrote to Kenny MacAskill, the Scottish Justice Minister, to say that he had been unable to secure an exclusion for al-Megrahi from the deal.

“The wider negotiations with the Libyans are reaching a critical stage and in view of the overwhelming interests for the United Kingdom I have agreed that in this instance the PTA should be in the standard form and not mention any individual,” he wrote.

Britain has already faced criticism from the Obama Administration for signing the PTA despite a decade-old promise to the United States that anyone convicted of the Lockerbie bombing would serve out the sentence in Britain.

The fresh disclosures last night may yet throw doubt over Gordon Brown’s assertion on Wednesday that there had been “no conspiracy, no cover-up, no double-dealing, no deal on oil, no attempt to to instruct Scottish ministers, no private assurances by me to Colonel Gaddafi”.

An aide to the Justice Secretary confirmed last night that Sir Mark, who had dealt often with Mr Straw when he was Foreign Secretary, “wanted to know what was happening with the PTA and get Jack’s perspective”. He added: “BP wanted to make its case because they were concerned that not making progress might have an effect on their deal with Libya.”

The Times has learnt that Sir Mark, a pivotal figure in negotiations leading to Libya’s abandonment of its weapons of mass destruction in 2003, was alsoinstrumental in securing the BP oil deal. In 2005 he flew to Libya with Lord Browne of Madingley, then the BP chief executive, where he introduced him to Colonel Gaddafi and oil chiefs.

Although in his telephone conversations with Mr Straw, Sir Mark is said to have avoided explicit reference to al-Megrahi’s fate, a government source acknowledged this would have been unnecessary because it was “well known that the Libyans were resisting pressure for an exclusion” — and that was holding up the treaty. It is understood that between the two calls, Justice Department officials had concluded that the negotiating position agreed between the British and Scottish governments was unsustainable.

Mr Straw’s aide said: “Jack has always stated that he took into account the overall impact of the agreement across a whole range of issues — and those included trade. He took this decision in the certain knowledge that the Scottish government always had a veto on releasing al-Megrahi.”

As recently as last week, BP flatly denied it made any representations to the Government over the impact of the prisoner transfer deal on the oil contract  with Libya. The company rejected suggestions that Libya was exerting pressure on its operations over al-Megrahi’s release.

Last night, however, a spokesman said: “BP did bring to the attention of the Government in late 2007 our concerns about the slow progress in concluding a PTA with Libya. Like many others we were aware that delay might have negative consequences for UK commercial interests including ratification of BP’s exploration agreement.”

He added: “We did not press for any particular kind of PTA, we were just hoping for an end to the delays concluding it.”

Libya has a long tradition of demanding political concessions in exchange for business deals. A representative of the Russian oil company OAO Lukoil was jailed briefly when commercial negotiations with Libya reached a difficult point in 2007 before being released in July 2008.

When police arrested Colonel Gaddafi’s son, Hannibal, and his pregnant wife in Geneva on assault charges, reprisals led to Swiss businessmen in Tripoli being imprisoned, flights into the country halted, oil exports cut and more than $5 billion withdrawn from Switzerland’s banks.

The BP oil deal was signed when Tony Blair shook hands with Colonel Gaddafi on plans for a PTA in May 2007. Oliver Miles, a former British Ambassador in Tripoli and vicechairman of the Libyan British Business Council, said: “BP was thrown out for political reasons in the 1970s and they only returned when the politics were right.

“During the PTA negotiations, I heard from business people in Libya that the authorities there may have played the BP card again.”

He added: “Certainly, if al-Megrahi had died in prison, the Libyans were saying that all bets are off.”

Nick Day, a former MI5 agent and the chief executive of the business intelligence firm Diligence, which has helped British companies to enter Libya, said: “It was an open secret on the ground there that other oil firms were not encountering the same difficulties that BP had … because the whole issue of al-Megrahi was unresolved.

“Any government has the overwhelming priority of ensuring the economic wellbeing of the country, protecting national security and furthering bilateral relations. This is clearly what Britain was doing in this case — and there is nothing wrong with it. The problem is that governments do not always feel able to tell people the whole truth.”