Keystone Copped

Of the MP previously best known for claiming parliamentary expenses in order to heat his stables, Holly Watt writes:

A Conservative MP will receive a payout of nearly £1.5m if the sale completes of the Kurdistan-based oil company for which he has worked since July 2015 alongside representing his constituents in Stratford-upon-Avon. 

Nadhim Zahawi, who acts as chief strategy officer for Gulf Keystone, was granted “performance units” on Monday shortly before it emerged that China’s state-owned oil company Sinopec was in talks to buy the company, which is currently valued at about £350m. 

His stake and that of two other directors would be worth 2% if the business is sold in the next year, valuing the overall holding at at least £7m. 

The MP’s share would amount to £1.4m, a fifth of the directors’ pot. 

Zahawi joined Gulf Keystone in July 2015 last year. 

As chief strategy officer he earns a monthly salary of £20,125 – over £240,000 a year. 

He has also been receiving regular bonus payments of up to £26,000 for advising the company. 

The MP is also a member of the foreign affairs select committee and has led a series of visits by British MPs to the politically sensitive Kurdistan region. 

Last January, Zahawi organised a visit to Kurdistan for Boris Johnson, now the foreign secretary, after which Johnson called for closer ties between the UK and the region. 

A few months later, Zahawi hosted a meeting in the region’s capital, Erbil, for British politicians and the Kurdistan president, Masoud Barzani. 

Throughout his time in parliament, Zahawi has strongly promoted the Kurdistan region, which has been campaigning for independence for decades. 

He was a member of the foreign affairs select committee when it published a report last year that stated: 

“We sense that, for the politicians and perhaps also the people of the Kurdistan region, management of the oil and gas fields also fulfils an important psychological and symbolic need: to demonstrate, after decades, if not centuries, of political marginalisation and neglect, that Kurds in Iraq can finally be masters of their own destiny.” 

According to the register of MPs’ interests, Zahawi has made at least five visits to Kurdistan with MPs and peers since he became an MP in 2010. 

He was previously an adviser to Jeffrey Archer and co-founded YouGov, the market research company. 

Gulf Keystone agreed to grant “performance units” as part of a special provision decided at the annual general meeting. Zahawi was granted 226,667 “performance units”; with the chief executive, Jón Ferrier, and the chief financial officer, Sami Zouari, awarded the rest that will be worth 2% if the company is sold within the next year. He is also expected to receive other payments. 

The company operates in the Shaikan area of Kurdistan, and produces around 40,000 barrels of oil a day. 

It hopes to produce 110,000 barrels of oil a day in the near future. 

The company is currently valued at around £350m, with the share price jumping this week after reports of the discussions with Sinopec emerged. 

The central Iraq government in Baghdad has repeatedly raised concerns about the income from the oil revenues in the area, which currently passes to the Kurdistan Regional Government (KRG). 

Last year, Gulf Keystone faced huge financial problems after delays over payments from the KRG. 

From September last year, it has managed to negotiate payments of around $100m.

As well as sitting on the select committee, Zahawi is also the co-chair of the all-party parliamentary group on Kurdistan. 

After the foreign affairs select committee published its report calling for the Kurds to take control of their own destiny, the APPG put out a pamphlet saying it accepted the report as “a major intellectual counterweight to the inertial force of the One Iraq policy”. 

The APPG also added that the UK “should stand ready to help ensure that any clear expression of will in favour of independence, and on reasonable terms, is accepted and respected.” 

Zahawi has a close and long-term relationship with Ashti Hawrami, the minister of natural resources in Kurdistan, once describing him as a “real visionary for the country”. 

Zahawi and Hawrami have appeared together at the annual Conservative party conference on at least two occasions. 

A freedom of information release from the Foreign Office revealed that Zahawi was key in organising the trip to Kurdistan for Johnson last January. 

In one email, one of Johnson’s aides noted: “Nadhim Zahawi has recommended a programme.” 

Another email from a foreign office official states: “I was unsighted until 3 weeks ago myself, it was cooked up by Nadhim Zahawi.” 

Zahawi, Johnson and their teams flew to Kurdistan together, on a private plane. 

In what was regarded as a major public relations coup for the Kurdistan government, Johnson was photographed with a Kalashnikov on a visit to see Kurdish Peshmerga troops training. 

However, a key element of the trip was “a select event for c.50 Kurdish/UK business leaders”. 

A foreign office official involved with the trip wrote that for local businessmen, “being seen in the room with the mayor and [the British ambassador] is an explicit endorsement of our backing.”

Gulf Keystone declined to comment on the potential sale to Sinopec. 

Zahawi declined to comment.