UK’s New Finance Minister Has Oil Industry Ties that Span the Globe

Nadhim Zahawi, the UK’s new chancellor of the exchequer, earned £1.3 million from a Kurdish oil company while serving as an MP, has advised fossil fuel companies in Nigeria and Canada, and recently defended “struggling” producers in the North Sea.

As chancellor, Zahawi will play a key role in spending decisions that will determine whether Britain can meet its net-zero targets – but his extensive ties to the oil and gas industry have dismayed advocates of faster climate action.

Zahawi’s connections have come under media scrutiny in recent years as several of the companies he has advised have faced various fraud and corruption allegations, one leading to a jail sentence. None overlapped with Zahawi’s time with the firms and he has not been accused of any wrongdoing.

At the start of the year, Zahawi defended North Sea oil and gas companies and rejected Labour’s call for a windfall tax, later adopted by the government in a more industry-friendly form. 

In April, however, Zahawi won plaudits from the environmental sector for launching a new “Sustainability and Climate Change Strategy” to make schools greener, including a new Natural History GCSE exam, while in his previous brief as education secretary. 

Nevertheless, news of Zahawi’s promotion has been met with anger by green campaigners and commentators, who question whether he will be ready to implement policies needed to meet the UK’s net zero goal, such as increased funding for energy efficiency. His predecessor Rishi Sunak came under fire for reportedly blocking green schemes proposed by Prime Minister Boris Johnson.

Green MP Caroline Lucas cast doubt on Zahawi’s willingness to take ambitious action given his professional background, while opposition Labour MP Diane Abbott tweeted that he “could not begin to understand the lives of ordinary people” given the sums of money he earned.

Campaign group Stop Cambo, which has been opposing the development of a key new oil project in the North Sea, said: “We need a Chancellor that will properly tax oil & gas companies and invest in renewables & insulation. We’re getting a former oil exec.”

Zahawi’s oil industry ties also include a donation from a North Sea company boss in 2017 to help with his general election campaign.

Oil Industry Career

An investigation by the Mirror last year found that Zahawi had earned £1.3 million as chief strategy officer of Gulf Keystone Petroleum, an Iraqi Kurdistan-based company. The earnings included a £285,000 “settlement payment” made after he became a junior education minister in 2018 and stepped down from the role.

High Court papers reported by the Organised Crime and Corruption Reporting Project allege that Gulf Keystone secured an oil field through a corrupt deal with Kurdish politicians. The deal was made prior to Zahawi joining and the claims are denied, however.

Before being employed by Gulf Keystone in 2015, Zahawi advised the now-defunct London-headquartered oil company Afren, two of whose executives were sentenced to a total of 30 years in jail in 2018 following a Serious Fraud Office investigation. 

According to the Mirror, Zahawi stopped working with the company, which he had been advising through a consultancy he set up with his wife called Zahawi & Zahawi Ltd, after the investigation was launched. There is no suggestion he was involved in any wrongdoing.

A joint investigation by the Guardian and DeSmog in 2019 noted that Zahawi had also been advising Talisman, a major Canadian oil sands producer, through the consultancy, and held shares in Genel Energy, an Anglo-Turkish oil and gas firm.

Ahead of the 2017 general election, Amjad Bseisu, CEO of EnQuest, which produces an estimated seven percent of the UK’s oil and has stakes in 40 North Sea oil and gas licences, gave £2,000 towards Zahawi’s fighting fund in his constituency of Stratford-on-Avon.

Bseisu, who has talked up the potential for new fossil fuel discoveries to be made in the region, has made numerous donations to the Conservatives, including during a critical period when the government was drawing up plans to “decarbonise” the sector.

In 2013, Zahawi became mired in controversy after he claimed expenses for electricity used to power horse riding stables he owns in Warwickshire, again revealed by the Mirror. He initially defended the claims but later acknowledged it was a “mistake” and repaid the money.

Zahawi did not provide a response to either the Mirror or Guardian’s investigations into his oil interests and had not responded to DeSmog at time of publication.

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