Oil & Money: tackling corruption and climate change

London can no longer be a welcome host to companies that plunder state and carbon budgets.


Daniel Voskoboynik
17 October 2016

London, world capital of the fossil fuel industry – and the dirty money which follows in its wake. CC: Neil Howard / Flickr. Some rights reserved.This week, senior executives of the oil and gas industry will be meeting at the Intercontinental Hotel in London for an exclusive conference named Oil & Money. Hosted by the New York Times and Energy Intelligence, the event is described as a “must attend” networking opportunity, a gathering of “over 450 of the most influential senior decision makers from the industry, along with government ministers and representatives, financiers and bankers, consultants and legal experts.” 

The conference is sponsored by a number of notorious companies: Exxon Mobil (a historic funder of climate denial, now under investigation by two US attorney generals for fraud), Sonangol (the Angolan state oil company long accused of corruption and nepotism, now on the brink of bankruptcy), Gunvor (a commodity trading company previously investigated for corruption), Bank of America (the western world’s coal and fracking bank), Dow Chemical (the chemicals giant which has still not borne responsibility for the 1984 Bhopal gas disaster), and others.

Organisations working on climate justice, human rights and corruption are already mobilising a joint civil society response under the banner: “this is not a conference, this is a crime scene.” Corporate sponsorship is not a neutral transaction — it is a ticket to access and prestige. It can buy you platforms, friendships, seats on boards, building plaques, favours and even academic esteem.

Roll out the red carpet 

Take the case of Igor Sechin, current CEO of Russian state oil company Rosneft and former right-hand man of president Vladimir Putin. In 2014, Sechin was placed under US sanctions over the Ukrainian conflict. His travel was restricted; his assets frozen. This year, Sechin was linked by Russian newspaper Novaya Gazeta to one of the world’s most expensive yachts, whose annual operating costs exceed his estimated salary. Sechin’s wife, implicated in the revelations, took Novaya Gazeta to court. Sechin himself sued newspaper Vedomosti earlier in the year for writing about his new $60m palatial home, demanding it physically destroy the newspaper’s print run.

The company Sechin runs is also notoriously negligent: in 2011, a federal watchdog reported 2,727 Rosneft oil spills in the oil-producing region of Khanty-Mansiisk. But Sechin’s tainted record is no deterrent for the organisers of Oil & Money. Rosneft is a proud sponsor, and Sechin is listed as a speaker. 

The red carpet treatment these companies and oil oligarchs obtain in the UK is not exceptional. London is arguably the world capital of the fossil fuel industry. Every year, plush London hotels open their doors to dozens of major industry events. 

Money flows from London to open new coal mines, lease oilfields, erect drills and build pipelines all around the world. The profits return, to be deposited in bank accounts and private equity funds

A third of the value of the FTSE100 comes from fossil fuels and mining, up from one-tenth a decade ago. Fossil fuel shares on the London stock exchange are worth more in total than the entire GDP of sub-Saharan Africa. The hydrocarbon reserves of companies registered in London contain the equivalent carbon of ten UK carbon budgets until 2050. 


Money flows from London to open new coal mines, lease oilfields, erect drills and build pipelines all around the world. The profits return, to be deposited in bank accounts and private equity funds, or invested in the city itself. Last year, billions of oil dollars poured into London property, attracted by rising prices and lax regulation. Swathes of the city are owned by investment companies whose capital originates primarily from fossil fuels.  The art of the golden handshake. RosNeft at Russia’s Eastern Economic Forum in Vladivostok, September 2016. (c) Maxim Blinov / RIA Novosti. All rights reserved.

More broadly, the UK is a key jurisdiction for concealing and laundering stolen wealth. Leading oligarchs, including oil barons, use the country to legitimise billions of pounds every year. According to former banker and anti-corruption campaigner Roman Borisovich, three-quarters of the money looted in Russia, much of which is creamed from hydrocarbon revenues, comes to Britain. It is no surprise that this year, writer and mafia expert Roberto Saviano called the UK “the most corrupt place on Earth”.

Keep it in the ground 

The Oil & Money conference throws light on an important convergence — the link between climate change and corruption.

Across the world, corruption is frequently cited in polls as a top problem. Stolen state funds mean underfunded healthcare, unbuilt schools and depleted social programmes. Money destined for aid or disaster relief is siphoned off. Corruption cements unfairness: university places and degrees are bought, impunity is purchased, and hospital beds are auctioned. It is the single biggest obstacle to tackling climate change.

We know that the vast majority of coal, oil and gas reserves must be left unexploited to secure any kind of reasonable, sustainable future. A recent report by Oil Change International computed that staying below the temperature target of two degrees celsius of global warming (globally agreed in 2009) essentially requires an end to any new extraction projects.

Solving the climate crisis and securing a liveable world mean two things for Oil & Money — oil must stay underground and money must flow away from dirty energy 

Although oil and gas companies have known about the environmental risks posed by their industry for decades, their vested interests in prolonging and expanding their business have compelled them to throw money at delaying a meaningful response to climate change. In other words, they have used corruption to obstruct political control over their profits and operations. 


The nature of fossil fuel extraction — complexity, the role of bidding, the number of mediators, the huge money at stake — has made corruption historically endemic in the industry. Just this year, documents leaked to the Huffington Post & Fairfax Media revealed how Unaoil, an obscure family business from Monaco, used millions of dollars to arrange contracts and bribe Middle Eastern officials on behalf of major oil companies. Dirty money. Offshore oil fields in the Caspian Sea, Azerbaijan. CC: Bruno Girin / Wikimedia Commons. Some rights reserved. Not only have fossil fuel companies used payments to gain preferential contracts, lower royalty rates and inflate stock values, but they have secured even broader benefits through institutionalised bribery. The fossil fuel industry spends hundreds of millions of US dollars every year corrupting science and politics through sponsorship, lobbying, and think-tank funding. This has allowed the industry to shape public discourse, gain proximity to decision-makers and exert decisive influence over political processes. In Russia, for example, the lobbying weight of the fossil fuel industry is frequently cited as the leading impediment to the development of renewable energy.

Political corruption is an investment which pays off like no other. Calculations by the IMF show that the fossil fuel industry received a staggering US$5.3tn in public subsidies in 2015; that’s more money that all global public health spending combined.

Rather than posturing at international summits and admonishing other countries for their “fantastic corruption”, the British government should conduct a little more introspection 

In many states, energy and climate policy is shaped by industry advisors or former employees. In the UK for example, the Minister of State for Energy and Climate Change from 2010 to 2014 was Greg Barker, previously employed by Sibneft. Sergey Donskoy, Russia’s Minister for Natural Resources, worked at Zarubezhneft and Lukoil. 

The revolving door turns both ways, as government officials leave office to enter private business. Mervyn Davies, the former UK trade minister, is now chairman of LetterOne Group, an investment company whose significant fossil fuel assets are managed by Russian billionaire Mikhail Fridman.

Unless we disrupt corruption and reclaim power away from the industry, the subsidy glut will prevail and much-needed alternatives will remain underdeveloped. 


Solving the climate crisis and securing a liveable world means two things for Oil & Money — oil must stay underground and money must flow away from dirty energy. London, the capital of fossil fuels and oil money laundering, has a pivotal role to play. It can no longer be a funnel of endless finance for dirty energy. Regulatory solutions are needed to drastically reduce the carbon density of the city’s financial sector.

The city’s far-flung friends will need to change their ways, too. Stricken by the “Dutch Disease”, the economies of Eurasia’s fossil fuel giants are in ill health, from Azerbaijan to Kazakhstan, and of course to Putin’s Russia. Ordinary working people are paying the price. 

As the Panama Papers illustrated, the ruling kleptocratic elites of these states are very happy to use UK jurisdictions to stash their wealth. It seems that many in London are all too eager to turn a blind eye, and the fallout of Brexit risks further cementing the UK’s status as a haven for dirty money. 

Rather than posturing at international climate summits and admonishing other countries for their “fantastic levels of corruption”, the British government should conduct a little more introspection and act to reform its own institutions and policies.

That is its debt to communities across the world, working to reclaim their stolen money and future.

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