Friedhelm Eronat's oil deals in Darfur, Sudan
Secret World of the Chelsea Oil Tycoon
By Adrian Gatton
26 May 2005
FRIEDHELM ERONAT is one of the world's most successful oil dealmakers.
He is also one of the most secretive men in Britain. He has an estimated fortune of at least $100 million (Pounds 55 million) built on controversial deals worth billions - often in connection with Mobil - in far-flung, difficult places such as Nigeria, Russia and Kazakhstan. But details about him are scant.
He eschews all publicity.
He lives in a Pounds 20 million Victorian house in a Chelsea square. The sumptuous house has a Degas painting on the wall and a magnificent wine cellar. He is married to society beauty Melisa Lawton. But typically, when she was snapped by paparazzi at Royal Ascot last year, her elusive husband was nowhere to be seen.
He became a British citizen (after renouncing his US passport) in 2003, and is now based in London, from where he operates his Cliveden Petroleum empire. Financier Robert Hanson is a friend, as is the embattled Lebanese businessman Eli Calil (accused of helping to finance the foiled Equatorial Guinea coup attempt in which Mark Thatcher was implicated).
With this sort of profile, you would expect to find Eronat in the Sunday Times Rich List or see him posing on the sofa with his wife in the pages of Hello!
Yet few people have heard of him. But an employment tribunal in West Croydon has blown the tightly sealed lid off this Great Gatsby - like figure's very private world.
Cliveden Petroleum is being sued for Pounds 8 million by highflying lawyer Dr Peter Felter, its former executive chairman, for alleged unfair dismissal.
Felter claims he was sacked for disclosing a sensitive, strategic oil deal in Africa between Eronat's company and the Chinese. The dispute has brought Eronat, 51, out of the shadows. After attending tribunal hearings, the Evening Standard can for the first time piece together his extraordinary life.
The case reveals Eronat to be at the hub of what has been dubbed "the new scramble for Africa", as the US, China and mercenaries led by the likes of Equatorial Guinea coup leader Simon Mann vie to carve up the continent's prized oil wealth. Eronat is not fond of journalists. When, on the off-chance of contacting him, the Evening Standard went to his house, the Filipina maid let us in, but we were ushered off the premises by the startled oil trader.
Cliveden's lawyers attempted against the Evening Standard's objections to exclude the Press from the West Croydon hearing, but the tribunal ruled we could stay.
That left the door wide open to a unique and fascinating look into his life. Within the oil industry, he has always had an aura of mystery. Even the name Eronat sounds unplaceable. Indeed, opinions vary as to whether he was born in a refugee camp in Eastern Europe, or more prosaically in Louisiana.
In fact he was born in Prem, Bavaria, in 1954.
Little is known of his early career but now he mixes at the highest levels. The tribunal was told "Eronat's world" was a "singular" and "unusual" place: hobnobbing with Prime Ministers, glitzy conferences staged by oil producers' cartel Opec (Rilwanu Lukman, its Nigerian former head, is a friend), multimillion-dollar deals done in Park Lane hotels, skiing in St Moritz and a holiday apartment in Marbella. But he prefers not to carry a laptop and avoids email. Nothing - not even Felter's contract - is committed to paper. Wherever he is, he is always talking the bottom line or, as he puts it, "the money in your pocket".
The sums involved are eye-popping. "Eronat told me he earned a $40 million commission from Phillips Petroleum on one oilfield deal alone," Felter explained. It is no surprise then that Felter, until 2001 the Pounds 375,000a-year head of energy at Clyde Co and for many years Eronat's lawyer, joined Cliveden. "There would be huge rewards for everybody," Eronat is supposed to have promised Felter.
But, while he likes making money he does not appear to welcome sharing it.
Jean-Gabriel Antoni, Eronat's saturnine Geneva-based financial manager, told the tribunal British Virgin Islands-registered Cliveden, which in November 2003 posted net profits of $63 million, is "not making tax returns anywhere".
Felter was escorted by a bodyguard at the hearing, though it is not clear where he thought the threat may come from. To understand the dispute, it is necessary to go back to a remarkable "completion" dinner held at Eronat's home in 2003. That night, 18 December, marked a victory for China in the scramble for Africa. The celebratory banquet, served by uniformed waiters, with guests including Felter and powerful Chinese State officials, was held in the basement, three storeys below a Chelsea street. In the impoverished nation of Chad, Eronat had landed a huge exploration concession - the "Chad Convention" - potentially holding 10 billion barrels of oil. The party was to toast a deal in which China, oil- hungry and "locking up" barrels all over Africa, bought a stake in this.
It was a big move for the Chinese. Chad recognises China's enemy Taiwan, and the Chad initiative was part of a careful political strategy (Eronat facilitated introductions between the Chad and Chinese governments), thought to have been approved by the Chinese Prime Minister and cabinet. The deal was important enough for one of the most powerful men in China, Wang Jun, chairman of Citic, the $60 billion State-owned corporation and very much an arm of government policy, to fly to London to sign up to. Together with Chinese oil firm CNPC, they purchased a $45 million, 50% share in Cliveden.
The deal was initialled there and then in Eronat's house.
Amid the popping corks and bonhomie, Felter privately reminded his boss there could be a problem. Cliveden's other 50% holding had been sold the year before to Canadian oil and gas company EnCana for $46.5 million, in a deal clinched by Felter. He believed EnCana was legally entitled to be informed about its new partner but would not be happy with its new bedfellow, given the Taiwan issue.
According to Felter, Eronat wanted to keep it quiet. Discussions became heated and when, a few days later, Felter again reminded Eronat of what he argued was his urgent legal obligation, he said Eronat shouted "No!" and slammed down the phone. Thereafter, he claimed, he was "sent to Coventry" for seven weeks.
Enter Eli Calil. As a friend and business associate of Eronat, Felter hoped the Lebanese businessman - who lives round the corner - would "talk him out of his crazy plan". Though the two men have a close working relationship and Calil is kept closely informed of much of Cliveden's activity, he did not prevail.
In January 2004, Felter notified EnCana about China's involvement. Eronat was apparently "furious". By mid-February, following a shareholders' meeting in Beijing, Felter was relieved of his duties.
Felter, who argues he put Cliveden on track to become a $1.2 billion entity, says he was sacked because he told EnCana about the Chinese. This was, he insisted, a "protected disclosure" (covered by the whistleblowers' employment laws). In keeping with his style, Eronat did not attend the hearings. But he claimed, via a brief witness statement, Felter was "not right for the job", was perceived to have an "arrogant" and "abrasive" style not suited to the Chinese way of doing business and that his disclosure to EnCana had "no bearing" on his removal.
Cliveden maintains there was no legal requirement to inform EnCana, and that the company acted correctly. EnCana would not make any comment to the Evening Standard about the dispute but is now said to be pulling out of Chad.
Felter had been dealt a bitter blow.
As Eronat's friend and legal counsel since the mid-1990s, he says that, in trying to do "the right thing", he had acted "out of misplaced loyalty". It must have been all the more galling since he had loyally shielded his client, he stated, startlingly, "against being indicted in the US for fraud and moneylaundering".
This related to Eronat's time in the 1990s in central Asia, then billed as "the new Middle East". Eronat was close to Mobil Oil. What emerges from Felter's timesheets, part of the tribunal evidence, are his meetings (Pounds 350 per hour) to fight a number of legal cases on behalf of his client: a $42 million civil suit (won hands down), two US Grand Jury investigations and a Swiss inquiry.
These apparently relate to a potentially sanctions-busting oil deal between Iran and Kazakhstan and to the "Kazakhgate" affair, the US's biggest foreign bribery case in which $78 million of inducements were allegedly paid by merchant banker James Giffen to the president of Kazakhstan for lucrative oil concessions. Eronat has not been charged in that case which goes to trial next year but is referred to in the indictment as CC1 (co-conspirator No 1) because his company was allegedly used by his friend Giffen as a conduit for some of the cash.
Dogged by these troubles, Eronat has moved on. He is out of Kazakhstan, out of the US, away from Mobil. Now he is in London, into Africa in a big way alongside Calil, and in deep with the Chinese. The hearing has closed. The tribunal panel is digesting the material with the outcome not likely for several weeks though both sides have threatened to appeal already.
It is not every day an employment tribunal enters the murky world of government deals and multimillion commissions - indeed, Congressional inquiries have revealed less.
(c)2005. Associated Newspapers Ltd.. Provided by ProQuest Information and Learning Company. All rights Reserved.
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For more on Eli Calil see April 15, 2005 CorpWatch - EQUATORIAL GUINEA: Death of a Mercenary (part two) and Suspicions of Hidden Forces. Plus Kathryn Cramer's blog.
Tags: Darfur Khartoum Sudan Africa Oil Sudan Cliveden Sudan Adrian Gatton Evening Standard Friedhelm Eronat Peter Felter Chad Taiwan Mobil EnCana Simon Mann Jean-Gabriel Antoni James Giffen Eli Calil Mark Thatcher Robert Hanson Nigeria Russia Kazakhstan OPEC British Virgin Islands CNPC