The King of Oil: The Secret Lives of Marc Rich

relationship.” These were the words used by one of Rich’s most successful traders to explain the position he adopted when approaching a prospective client. This strategy of offering valuable services in order to obtain long-term contracts is clearly illustrated in Rich’s dealings with four countries in particular: Marxist Angola; Jamaica, which alternated between socialist and economically liberal governments; South Africa under apartheid; and the East African nation of Burundi, one of the world’s poorest. Rich made offers to these four countries, representing nearly all political forms of government, that they simply could not refuse.
The Mysterious Monsieur Ndolo
     
    Monsieur Ndolo was a well-known acquaintance of the National Iranian Oil Company in the early 1980s. The black man was from Burundi, a poor country in East Africa and a former German colony that remained under Belgian administration until its independence in 1962. Monsieur Ndolo was the director of Cobuco (Compagnie Burundaise de Commerce), a state-owned company that purchased commodities for Burundi. Cobuco’s offices were located at rue Marie Depage 7 in the center of the embassy quarter of Brussels, the Belgian capital and the seat of NATO headquarters.
    Iranian officials only knew the sound of Monsieur Ndolo’s voice. He regularly called NIOC headquarters in Tehran from Brussels. If Iranian officials had ever had the opportunity to meet Monsieur Ndolo, they would have been rather surprised: Monsieur Ndolo did not actuallycome from Burundi, nor was he black. He was a white trader who worked for Marc Rich and only pretended to be from the African country. Nor was Cobuco a Burundian state-owned company, as everyone believed. In reality Cobuco was a joint venture between Rich’s company and the Burundian government, each of which owned a 50 percent stake.
    The company was founded to trade with postrevolutionary Iran. Rich’s trader, who would later take on the role of Monsieur Ndolo, contacted the Burundian government through an intermediary and suggested what one might call a very original deal. Burundi should request a long-term contract for oil deliveries from Iran’s revolutionary government. Monsieur Ndolo, who today does not wish to see his real name appear in print, explained with enthusiasm the advantages the company had reaped from this deal. “A Burundian delegation actually did travel to Tehran in order to negotiate an oil contract. I instructed the delegation from the background. I thought it would be possible for a poor country such as Burundi to ask the Islamic government in Iran for favorable terms of payment. I told the delegation they should offer to pay Iran the official OPEC price, but they would only be able to pay one year after delivery—and with no interest payments.” Monsieur Ndolo knew that the Iranians advanced an Islamic economy based on the rules set forth in the Koran, which forbade the charging of interest. After a long series of negotiations, Iran finally agreed to the deal proposed by the Burundian delegation, and the two parties signed a long-term contract for the delivery of crude.
    Rich chartered ships to collect the oil from the Iranian harbor of Bandar Abbas in the Persian Gulf. NIOC believed the ships would transport the oil to a refinery in Kenya. There it would be refined and transported by tanker truck to inland Burundi, where it would help to get the Burundian economy running and aid in the development of the country. The reality, however, was completely different. “We made a fortune,” Monsieur Ndolo told me in his office located in a European capital. He leaned back and drew deeply on his cigarette. “You usuallyhave to pay for the oil within thirty days,” he explained. “In this case we had a year before we had to meet the payments, all without having to pay interest.”
    For Rich’s company, it was two good deals in one. It only had to pay the official OPEC price for the oil—a price that was generally lower than the spot market price—and it earned money on the deferred payment because its customers abided by the usual payment terms. In the early 1980s the prime rate was a horrendous 18 percent (it was 3.25 percent in February 2009). That was 18 percent that Rich could add to the price, as only a small portion of the oil actually made it to Burundi. Most of the oil was sold by Marc Rich + Co. for good prices on the spot market. Both parties had a good laugh at the negotiating