The Oil Road

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by James Marriott


  26 See L. C. Dunsterville, Adventures of Dunsterforce, Edward Arnold, 1920.

  27 F. Maclean, Eastern Approaches, Jonathan Cape, 1949, p. 34.

  28 Said, Ali and Nino, p. 24.

  29 Stell documents in Imperial War Museum, Misc 204, Item 2972, quoted in M. Hudson, Intervention in Russia, 1918–1920: A Cautionary Tale, Leo Cooper, 2004, p. 129.

  30 F. Venn, Oil Diplomacy in the Twentieth Century, Palgrave Macmillan, 1986, p. 35.

  31 Quoted in Hudson, Intervention in Russia, p, 130.

  32 Ibid.; S. Abilov, ‘Historical Development of the Azerbaijan Oil Industry and the Role of Azerbaijan in Today’s European Energy Security’, Journal of Eurasian Studies 2: 3 (2010).

  33 C. King, The Ghost of Freedom, OUP, 2008, p. 168.

  34 R. Suny, Revenge of the Past, Stanford University Press, 1993, p. 42.

  35 J. Bamberg, The History of the British Petroleum Company, Volume 2: The Anglo-Iranian Years, 1928–1954, CUP, 1994, p. 113.

  36 Levine, The Oil and the Glory, p. 159.

  37 Browne, Beyond Business, p. 156.

  38 Ibid.

  39 N. Butler, ‘Energy: The Changing World Order’, bp.com, 5 July 2006.

  40 D. Morgan and D. Ottaway, ‘Azerbaijan’s Riches Alter the Chessboard’, Washington Post, 4 October 1998.

  41 FCO, ‘Letter: The Baroness in Baku – AGI/FOI 10’, 24 September 1992, obtained through FOIA.

  42 FCO, ‘With the Baroness in Baku – AG1/FO1 9’, September 1992, obtained through FOIA.

  43 FCO, ‘Letter: The Baroness in Baku – AGI/FOI 10’, 24 September 1992, obtained through FOIA.

  44 FCO, ‘Minutes: Call on the Secretary of State by the Chairman and Chief Executive of British Petroleum – HF/FOI 68’, 2 December 1993, obtained through FOIA.

  45 de Waal, Black Garden, pp. 293–4.

  46 Browne, Beyond Business, p. 158.

  47 Levine, The Oil and the Glory, pp. 172–3.

  48 Browne, Beyond Business, p. 158.

  49 Sunday Times, 26 March 2000 – no longer available on website, but referenced at network54.com.

  50 J. Hemming, The Implications of the Revival of the Oil Industry in Azerbaijan, Centre for Middle Eastern and Islamic Studies, University of Durham, 1998.

  51 BP had been encouraging the Foreign Office to invite Aliyev since Chairman David Simon had met Foreign Secretary Douglas Hurd three months earlier.

  52 N. Sagheb and M. Javadi, ‘Azerbaijan’s “Contract of the Century” Finally Signed with Western Oil Consortium’, Azerbaijan International 2: 4 (1994).

  53 de Waal, Black Garden, p. 237.

  54 King, Ghost of Freedom, p. 219.

  55 This is backed up by other analysts, who point out that Heydar Aliyev prioritised securing strong international allies and a ready source of hard currency, intertwining foreign commercial and state interests with Azerbaijan’s fate. See, for example, Hoffman, ‘Azerbaijan: The Politicization of Oil’.

  1 Kleveman, The New Great Game, p. 65.

  2 Data from Thomson’s – December 2008. In the UK: 1. Legal and General Invest Management, Ltd, 2. M&G Invest Management, Ltd, 3. Capital World Investors, 4. Barclays Global Investors (UK), 5. Scottish Widows Investment Partnership, Ltd, 6. Insight Investment Management (Global), Ltd, 7. Standard Life Investments, Ltd, 8. Capital Research Global Investors, 9. AXA Investment Managers UK, Ltd, 10. Threadneedle Asset Management, Ltd, 11. Aviva Investors Global Services, Ltd; and in the US: 12. State Street Global Advisors (US).

  3 ‘BP Sinking Cash into Azerbaijan’, upi.com, 2 September 2010.

  4 J. Herron, ‘BP: Azeri Oil Field Partially Restarted’, Dow Jones Newswires, 24 December 2008.

  5 T. Bergin, Spills and Spin: The Inside Story of BP, Random House, 2011, p. 131.

  6 H. Campbell, ‘Scale of the Century’, Horizon 1 (2009), p. 39.

  7 Kleveman, The New Great Game, p. 65.

  8 A year after our meeting, we discovered through the Wikileaks release of US cables that BP’s partners were actually extremely critical and upset about how the company ‘sought to limit information flow about this event’. US Embassy, ‘Azerbaijan Income Takes a Hit as Now Short-Term Fix’, 26 September 2008, released by Wikileaks and guardian.co.uk on 15 December 2010.

  9 U. Sadigzade, ‘Our Eyes Full of Tears: Our Hearts Broken’, Azerbaijan International 14: 1 (2006), pp. 46–7.

  10 S. Sebag Montefiore, Young Stalin, Weidenfeld & Nicolson, 2007, p. 214.

  11 For similar instances, see azerireport.com.

  12 Campbell, ‘Scale of the Century’, p. 39.

  13 T. Bagiyev, T. Heydarov and J. Novruzov, Azerbaijan: 100 Questions Answered, Azerbaijan Boyuk Britaniya Ganjlari Jamiyyati, 2008, p. 11.

  14 ‘General Training of Military Parade Held on the Occasion of 90th anniversary of Azerbaijani Armed Forces To Be Held on June 16’, at en.apa.az, 25 June 2008.

  15 S. Freizer, ‘Nagorno-Karabakh: A Frozen Conflict that Could Boil Over’, European Voice, 31 January 2008.

  16 I. Aliyev, Opening Speech at the Meeting of Cabinet of Ministers, at president.az, 20 October 2010.

  17 ‘NATO to Supply Azerbaijan and Georgia with New Technical Equipment’, at today.az, 27 April 2007.

  18 D. Stokes and S. Raphael, Global Energy Security and American Hegemony, Johns Hopkins University Press, 2010, pp. 137–8.

  19 This is the official history of the Azeri nation, as told by government departments and most pro-government and opposition newspapers. Examples quoted in this section include Heydar Aliyev Foundation, ‘Azerbaijan from Ancient Times to the Acceptance of Islam’, at azerbaijan.az; Azeri Embassy in UK, ‘History of Azerbaijan’, at azembassy.org.uk; ‘Roots Deeper than Oil’, at divainternational.ch.

  20 Azeri Embassy in Sweden, ‘Emergence of Early States’, at azembassy.se.

  21 Azeri Embassy in UK, ‘History of Azerbaijan’.

  22 ‘Azerbaijani MP: Day of National Salvation Is of Great Importance for Azerbaijani People’, at today.az, 15 June 2010.

  23 Suny, Revenge of the Past, p. 42.

  24 ‘Umma consciousness’ describes the identification of an individual with the Islamic community over and above some other grouping, such as that of nationality.

  25 T. Swietochowski, Russian Azerbaijan, 1905–1920: The Shaping of National Identity in a Muslim Community, CUP, 1985, p. 193.

  26 de Waal, Black Garden, pp. 88–9.

  27 Ibid., pp. 90–1.

  28 T. Goltz, ‘How the Other Half Lives in Oil-Rich Azerbaijan’, Los Angeles Times, 23 November 1997.

  29 J. Barroso, ‘Speech: The EU and Azerbaijan: A Shared Vision for a Strong Partnership’, at europa.eu, 14 January 2011.

  30 Oil Revenue Transparency: A Strategic Component of US Energy Security, Global Witness, March 2007. The Global Witness report goes on to explain: ‘Statistics bear out Aliyev’s comments in large degree. GDP growth per capita increased from 10.4% in 1999–2000 to 25% in 2004–2005’, and that, ‘furthermore, foreign direct investment in Azerbaijan increased by 160% from 2002 to 2005’. Constructing and operating seven offshore oil rigs and an export pipeline will no doubt lead to soaring FDI and GDP per capita, especially in a poor and small country. But the translation of FDI and GDP growth into ‘development and poverty reduction’ cannot be taken for granted. Unless ‘development’ can include an unsustainable construction boom of hotels, the odds and historical evidence are, sadly, weighted against Azerbaijan’s poor. A useful perspective on FDI is given by Bayulgen, ‘Foreign Investment’, which argues that oil-rich states in the developing world with authoritarian regimes tend to fare better in attracting FDI than states with democratising or hybrid regimes, and that the FDI inflow perpetuates such regimes by external legitimisation. Bayulgen probably did not expect ‘external legitimisation’ to include praise from anti-corruption campaign groups.

  31 C. Eads and A. Tunold, Progress Report 2007–2009: Establishing Resource Transparency, EITI Secretariat, 2009.

  32 Despite OSI’s an
nual budget in Azerbaijan consisting of only around $3 million, its impact is significant because it focuses on supporting oppositional groups that receive no government funding.

  33 ‘Resource Links’, at soros.org.

  1 Said, Ali and Nino, p. 94.

  2 M. Polo, transl. William Marsden, The Travels of Marco Polo, Wordsworth Classics of World Literature, 1997, pp. 16–17.

  3 M. Javadi and N. Sagheb, ‘Caspian Caviar in Peril’, Azerbaijan International 2: 3 (1994), pp. 50–2.

  4 Said, Ali and Nino, p. 17.

  5 Heydar Aliyev Baku–Tbilisi–Ceyhan pipeline 2005.

  6 Abdullayeva et al., Report on Monitoring.

  7 Authors’ interview with Irene Gerlach.

  8 The second – during the 1930s and early 1940s – is also often omitted by Western commentators.

  9 ‘BP in Azerbaijan: Sustainability Report 2007’, BP, 2008, p. 6.

  1 See C. Marvin, The Region of the Eternal Fire, W. H. Allen & Co., 1884.

  2 N. Ferguson, The World’s Banker: A History of the House of Rothschild, Weidenfeld & Nicholson, 1998, p. 880.

  3 Marvin, Region of the Eternal Fire, p. 332.

  4 J. Joseph, Pipeline Diplomacy: The Clinton Administration’s Fight for Baku–Ceyhan, Woodrow Wilson School of Public and International Affairs, 1999.

  5 S. Cornell, The Guns of August 2008: Russia’s War in Georgia, M. E. Sharpe, 2009, p. 38.

  6 Joseph, Pipeline Diplomacy, 1999.

  7 S. Smith, In Allah’s Mountains, I. B.Tauris, 1998, p. 73.

  8 D. Morgan and D. Ottaway, ‘Azerbaijan’s Riches Alter the Chessboard’, Washington Post, 4 October 1998, p. 3.

  9 R. Morningstar, ‘Testimony: Commercial Viability of a Caspian Sea Main Export Energy Pipeline’, Senate Subcommittee on East Asian and Pacific Affairs, 3 March 1999.

  10 ‘Resettlement Action Plan: Azerbaijan’, BTC Co., November 2002.

  11 At times Amnesty International and WWF were also drawn in. Other groups that were involved included Urgewald in Berlin, Friends of the Earth Netherlands (Milieudefensie), Friends of the Earth USA, Friends of the Earth France (Amis de la Terre), Friends of the Earth International, and the Bank Information Center in Washington, DC.

  12 Browne, Beyond Business, p. 170.

  13 BTC Co. was the company formed to construct and operate the pipeline. As BP was the lead partner in BTC Co., however, their names were often interchangeable when discussing the project.

  14 J. Bowden, ‘Azerbaijan: From Gas Importer to Gas Exporter’, in S Pirani, ed., Russian and CIS Gas Markets and Their Impact on Europe, OUP, 2009.

  15 T. de Waal, The Caucasus: An Introduction, OUP, 2010, p. 185.

  16 R. ten Hoedt and K. Beckman, ‘For Nabucco It Is Now or Never’, European Energy Review, 4 November 2010.

  17 Ibid.

  18 J. Vinois, Security of Gas Supply in the EU, European Energy Forum, 6 October 2008; M. Alvera, Security of Supply: Does the Future Lay on Gas Pipelines / Infrastructure?, European Energy Forum, 6 October 2008.

  19 The recent rapid expansion in the US of shale gas extraction – known as ‘fracking’ – has led to a drop in demand for imports.

  20 ‘EU Offers $21 Billion for Trans-Saharan Pipeline’, afrol.com, 18 September 2008.

  21 J. Vinois, Security of Gas Supply in the EU.

  1 Republic of Azerbaijan Special State Protection Service, ‘Another World-Scale Confidence’, at dmx.gov.az.

  2 BP denied the existence of this document in a phone call with Platform in June 2009. However, a Bilateral Security Protocol for BP facilities was signed in 2007, covering the use of force and cooperation between BP and Azerbaijan. More detailed procedures for the Azeri Export Pipelines Protection Department were agreed with BP in 2009. BP in Azerbaijan: Sustainability Report 2010, BP, 2011, p. 19.

  1 R. Suny, The Soviet Experiment: Russia, The USSR, and the Successor States, OUP, 1998, p. 249.

  2 H. R. Knickerbocker, ‘The Soviet Five-Year Plan’, International Affairs 10: 4 (July 1931).

  3 A. Nove, Economic History of the USSR, Penguin, 1991, p. 192.

  4 Suny, Soviet Experiment, p. 250.

  5 Orjonikidze was registered as dying from a heart attack, but Khrushchev made the suicide claim in his famous Secret Speech in 1956.

  6 L. Gray, ‘Climate Change ‘Kills 300,000 Every Year’, Daily Telegraph, 29 May 2009.

  7 ‘Georgians also had several modern airplanes that were of much better quality than those in possession of the Red Army. However, due to the absence of proper oil and spare parts that the government refused to purchase, Georgian pilots were incapable of taking full advantage of their technical superiority.’ A. Andersen and G. Partskhaladze, ‘Soviet–Georgian War and Sovietization of Georgia 1921’, Revue historique des Armées 254 (2009).

  8 Fifty-seven per cent of Soviet prisoners of war died after capture, while only 3.5 per cent of British and US prisoners met the same fate. Suny, Soviet Experiment.

  9 The town was named after Sergo Orjonikidze, and remained so despite his suicide and fall from favour four years previously.

  10 ‘British Investor Wants Rustavi Plant Back’, Georgian Times, 26 October 2009, at geotimes.ge.

  11 M. Vacheishvili and E. Digmelashvili, ‘Complaint to the IFC Compliance Advisor/Ombudsman’, 16 March 2004, at bankwatch.org.

  12 The agreements upon which BTC and SCP were built delineated a forty-four-metre-wide construction corridor in which both pipelines would be buried – as we witnessed at Qarabork and Hacalli; but this corridor sat within a 500-metre-wide corridor in which no buildings were to be constructed. However, the pipeline could pass within 250 metres of existing buildings. Resettlement Action Plan: Georgia, BP, December 2002.

  13 Vacheishvili and Digmelashvili, ‘Complaint’.

  14 Ibid.

  15 ‘BTC Section – Pipeline Construction Begins’, Azerbaijan International 11: 1 (Spring 2003), pp. 74–9.

  1 Montefiore, Young Stalin, p. 154 – picture plate.

  2 Other non-EU members of the Council of Europe include Russia, Turkey, Norway, Azerbaijan, Switzerland and Armenia.

  3 Suny, Revenge of the Past, p. 121.

  4 Montefiore, Young Stalin, p. 187n.

  5 P. Jawad, Europe’s New Neighborhood on the Verge of War: What Role for the EU in Georgia?, Peace Research Institute (Frankfurt), 2006.

  6 Quoted in S. Blank, ‘From Neglect to Duress’, in S. Cornell, The Guns of August 2008: Russia’s War in Georgia, M. E. Sharpe, 2009.

  7 T. Babali, ‘Implications of the Baku–Tbilisi–Ceyhan Main Oil Pipeline Project’, Perceptions, Winter 2005.

  8 Much of the research for this section was conducted by Greg Muttitt of Platform and Nick Hildyard at the Corner House in producing their paper, ‘Turbo-Charging Investor Sovereignty: Investor Agreements and Corporate Colonialism’, Platform/Corner House, 2006.

  9 For the history of Peter Gray, Baker Botts and slavery, see the online summaries of documents held by the University of Texas Library: ‘Guide to the Judge Peter W. Gray Papers 1841–1870, at www.lib.utexas.edu.

  10 D. Eviatar, ‘Wildcat Lawyering’, American Lawyer, November 2002.

  11 Ibid.

  12 A. S. Reyes, ‘Protecting the ‘Freedom of Transit of Petroleum: Transnational Lawyers Making (Up) International Law in the Caspian’, Berkeley Journal of International Law 24: 3 (2006).

  13 Muttitt and Hildyard, ‘Turbo-Charging Investor Sovereignty’. See also Center for International Environmental Law, ‘The Baku–Tbilisi–Ceyhan Pipeline Project Compromises the Rule of Law’, 2003.

  14 Amnesty International, Human Rights on the Line: The Baku–Tbilisi–Ceyhan (BTC) Pipeline Project, May 2003, p. 5.

  15 Eviatar, ‘Wildcat Lawyering’.

  1 M. Kochladze, ‘Pipe Dreams Shattered in Georgia’, 26 September 2008, at brettonwoodsproject.org.

  2 N. Mustafayez, ‘BP-Azerbaijan Refutes Reports that Russian Planes Bombed BTC’, 12 August 2008, at en.apa.az.

  3 ‘The Baku–Tbilisi
–Ceyhan Pipeline Project – DSU Update’, BTC, October 2008, p. 36 (released under FOIA by ECGD on 26 March 2010).

  4 G. Muttitt and J. Marriott, Some Common Concerns: Imagining BP’s Azerbaijan–Georgia–Turkey Pipelines System, CRBM/CEE Bankwatch Network/Corner House/FoEI/Kurdish Human Rights Project/Platform, 2002.

 

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