As everyone knows, access to and control over oil supplies is of no real import to Western governments, and certainly does not figure as a key interest shaping foreign policy. Also common knowledge: private corporations and governments are opposing forces, and Margaret Thatcher didn't fly into Azerbaijan on a private jet fitted with a hot tub and Michael Heseltine. Alas, these and other comforting illusions are dispelled in an important new book by James Marriott and Mika Minio-Paluello. The Oil Road: Journeys from the Caspian Sea to the City of London is part travelogue, part extensively researched study of the political economy of Caspian oil, part exposé of the intimate political and economic links between BP and various unsavoury regimes, the British government among them.
I interviewed Mika, the book's co-author and a researcher and campaigner at Platform, about the politics behind Europe's most controversial oil pipeline.
'The Oil Road' is written, as a blurb on the back puts it, as a kind of 'political cartography', combining historical and political analysis with vivid descriptions of the areas in the Caucasus and Turkey through which BP's pipelines run. Can you describe the process of writing the book and what you were trying to do with it?
We didn't want to write a book that would just be for oil experts. Although we are a centre of expertise on the oil industry we also want to challenge the whole approach of rule by experts, which ultimately includes those working in campaign groups and NGOs. The aim was to really get under the skin of the way the movement and pumping of crude oil, from its extraction in the Caspian Sea to Central and Western Europe, works, and to find a way of making that process accessible and interesting to people who aren't oil geeks.
The book was the product of extensive research. James began thinking about the Caspian, the Caucasus and oil in the 1990s. Platform, the political campaigning group James helped establish in the 1980s and for which I have worked since 2005, has been engaged in related issues since 2001, particularly in challenging BP's then-proposed Baku-Tbilisi-Ceyhan pipeline, which forms the first part of the book. As a result we had a large base of knowledge to work from. We wrote a previous book before the pipeline was built called Some Common Concerns which tried to imagine what the pipeline would be like and what some of its consequences would be. Initially we saw this book as a follow-up to that, after the pipeline was built, to examine whether or not our warnings had been correct, and to challenge BP's writing of the history.
And to research the book you followed the route of the pipeline on the ground?
Yes, although we didn't do it in order. We tracked the movement of the crude westwards from the Caspian, so the book's narrative is spatial rather than chronological. That involved going to the villages, to the cities and political centres, through the valleys and mountain ranges and coastlines, and spending quite a lot of time in Georgia, in Baku, in north-eastern Turkey, and a lot of the time in places people don't normally visit: little villages and so on.
Did being there on the ground highlight stuff that you hadn't fully appreciated from reading the reports?
We'd already travelled to the region before. But yes: we had a long-term engagement with people living in the communities along the route before the pipeline was built, while it was being built, and after it was constructed. A lot of the voices of people along the pipeline don't really come out unless you actually go and speak to them. You don't hear their stories in BP's sustainability reports, unless they happen to work for BP, and even then the quoting can be very selective. They rarely appear in media coverage, or in the academic papers that have been done, most of which I've come across relating to the pipeline were written in cooperation with BP.
When you go there you find that people have varying perspectives. It's not that everyone you meet who lives near the pipeline says 'I hate the pipeline'. In fact a lot of people in Turkey, because of the way the pipeline has been represented as a national project and something the Turkish people should be proud of, will initially say 'the pipeline's great, it's wonderful, we should stand with it'. Only once you talk more, and less directly, about it do you start to hear their concerns or their unhappiness about the way their land was destroyed, or how they can't access their land, etc.
Can you describe the broad area the pipeline goes through? Where does it take the oil from, and where does it deliver it to?
We track the crude from far out in the Caspian Sea, where it's sucked from deep underground and pumped ashore in Azerbaijan just south of Baku to a BP terminal. It is then processed and pumped into a much longer pipeline, just over 1,000 miles long, that runs west from the Caspian Sea through Azerbaijan up into the Caucasus mountains, across the border into Georgia, before looping back down into Turkey, bypassing Armenia. It crosses the border into Turkey in the north-east and runs west towards Ankara, before turning south down to the Mediterranean coast. When it hits the coast, just south of Ceyhan, there's another BP terminal, where the crude is stored until tankers collect it—normally between 500,000 and 2 million barrels per tanker—and ship it away across the sea to anywhere: it can go to Chile, Japan, Israel, or to Britain (usually to Fawley, near Southampton).
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We followed one of the most common routes, where the crude is picked up from the coast of Turkey and taken west around Greece and north up the Adriatic to Trieste in north-east Italy, near the border with Slovenia. There it's unloaded again and pumped into another pipeline, built by BP 40-50 years ago, which takes the crude north over the Alps through Austria into Bavaria, where it's used to supply heavy industry.
So we follow the transportation of crude from the Caspian to Bavaria, but at the same time we also look at the movement of money and power and people relating to this whole industrial complex between London and the region.
Have the energy resources of the Caspian figured prominently in British foreign policy? How has the British government's approach to the Caucasus been shaped by the energy resources located there?
Energy resources have been pretty central to British foreign policy. Documents received through the Freedom of Information Act show Tory ministers in the '90s saying that the primary British foreign policy interest in Azerbaijan, as well as in Colombia, is the oil, and in particular BP's investments there. As the book shows, this isn't a new development.
If you look back into the late-nineteenth and early-twentieth centuries, and the period surrounding WWI, Britain clearly conceived of the area primarily in terms of its oil resources. That was the main reason why a British military force was shipped off to Azerbaijan after the end of First World War: to stop Trotsky's army gaining control of those reserves.
That interest has continued throughout, but through the years of the Soviet Union, Britain had much less chance of getting control. In the late 1980s the issue resurfaced, and in the early 1990s you had Thatcher pushing John Browne, then-head of exploration and production at BP, to go off and find oil contracts in Baku. BP then ended up bringing Thatcher, now an ex-Prime Minister, across to Azerbaijan to be there when they signed one of their initial contracts.
As the Soviet Union disintegrated there was heavy pressure and geopolitical manoeuvring both from Britain and from the U.S. to secure control of the resources, and the infrastructure to remove and transport them to the global market, by Western companies. Regardless of where the oil ends up—in Japan or Chile or wherever—if it's moved from Azerbaijan to a port, such as Ceyhan in Tukey, from where it can be shipped across the world, then the economic power of Europe and the U.S. means that they can dominate it.
That's why, ultimately, the pressure for the pipeline was largely coming from the British and American governments rather than BP. From a financial perspective, for BP it would have made more sense to pump the crude to Iran: it could have built a pipeline that was a few hundred kilometres long, routed it to the north of Iran where there isn't much crude, and in exchange received crude from the Iranian coast on the Gulf to ship elsewhere. That would have been much cheaper and much easier to construct, but obviously it wasn't acceptable for the Western powers. Neither was it acceptable to ship the crude through, or to upgrade, existing pipelines through Russia, or to build pipelines to transport it east towards China. Hence what we saw was one of the longest pipelines in the world being constructed over mountains and crazy geography, bypassing Armenia in a big loop, to take Caspian crude to the Mediterranean.
So Western governments have a lot of leverage over companies like BP in the region?
They have leverage, but it's more about cooperation and quid pro quo. For instance BP recognised that routing the pipeline to the Mediterranean made little financial sense, but it agreed to do it in exchange for public subsidies from the U.S. and UK. On the other side, in the early '90s when BP was struggling to win the contract to extract Azeri oil, it wanted the British government to establish a diplomatic presence in Azerbaijan to boost its chances. British officials were still based out of Moscow and hadn't yet established a presence there. So BP provided the government with space in its own corporate office in Baku, raised the British flag outside and said 'here is the British consulate'. So we see very close collaboration.
In the book you quote John Browne likening the process of winning the contract to extract Azeri oil to a James Bond novel. What kind of thing is he talking about?
Most of it hasn't come out. You hear a lot of allusions to, for example, negotiations where someone will just pull out a gun and start threatening other people, or crazy parties with drugs, people being paid for sex, lots of money being thrown around... Certainly a lot of money changed hands, with the oil companies offering large bonuses of between $30-$100m. Where all that money went is pretty unclear.
There were also various coups going on in Azerbaijan during that period, and there have been accusations that BP in particular supported the coup that brought Aliyev to power. BP has reacted very strongly to those accusations—a story reporting them in the Sunday Times, for instance, was quickly pulled and is no longer on their website.
What were the provisions of the 'contract of the century' that BP and other international oil firms signed with the Aliyev regime? Was it typical of such agreements?
The contract was a production sharing agreement, which is a long-term agreement: it can run for more than 40 years. It's very complex, as a lot of production sharing agreements are, which in itself makes transparency and tracking revenue flows difficult. Azerbaijan didn't get completely ripped off: it does get revenues from it. But it's not as good a contract as it could have been.
It gives vast profits to the private oil companies. What needs to be born in mind is that companies supposedly take a risk, and the more risk they take the greater the profit margin they demand. That's the logic within the capitalist context: if you're an oil company and let's say you're going to drill in the Arctic, a) you don't know if you'll find any crude, and b) it's quite risky. So you're going to want a lot of profit if you get it right. But in Azerbaijan they already knew where the crude was and how much of it was there, and much of the infrastructure had already been built. BP wasn't running the same kind of risk as in a new 'frontier' region, so you'd expect its profit margins to be much lower than they are. In that context, Azerbaijan was getting significantly ripped off, and oil companies were getting vastly more profits than they deserved.
This came about because Azerbaijan in the early '90s was in a very weak negotiating position. It was newly independent, scrambling to increase revenue, and getting trounced in a war with Armenia. The regime wanted to sign a contract that would start producing revenue quickly, and specifically to sign a contract with Western companies to underpin ties with Western powers, thinking that that would help it win the war against Armenia. Signing the contract helped Aliyev boost his position within Azerbaijan, by giving him a tangible achievement to point to, and to improve his relationships and status internationally. However as a result they had to concede quite a lot.
In the decade and a half since the contract went into effect, has the Azerbaijani economy experienced a boom?
'Boom' is a complicated thing. There has been, over the last 15 years, an influx of money to elements of the Azeri economy. That doesn't necessarily equate to people being better off, to rising income. It has equated to inflation and to a boom in certain parts of the skyline, with lots of new glass towers and skyscrapers, many of which are empty.
At the same time we've seen hundreds of thousands of internally displaced people living in shoddy housing with no water or electricity, while the Azeri agricultural sector, which used to be a significant exporter, has struggled. When you get a sudden influx of oil money to certain sectors you tend to see inflation and an increase in the exchange rate, which makes it much harder to export goods like vegetables.
You met with opposition activists in Azerbaijan. What were their views on BP's role in the country?
There's a variety. Some opposition activists have tried to ally themselves with BP. In some ways BP have even more power over civil society than the Aliyev regime, because of the way they've funded things.
Independent
opposition activists who refuse to ally themselves with corporate or state power are pretty furious. They say 'our country is run by the Aliyev family and a British company, and between the two of them they cut up the country and pick which bits of profit they want to take and which bits they're going to control'. They see it historically as yet another era in Azeri history where Azeri resources have been used for the interests of people and companies from abroad, keeping Azerbaijan in a state of dependence and unable to develop areas of its society and economy which don't rely on oil.
But the more activists speak out against BP, the more repression they face and the less funding they get. Notably our first book on BP, Some Common Concerns, was translated into Russian and Azeri, and both versions were banned.
Let's shift to Georgia, a 'transit country' rather than a source: its role is to host a pipeline going through it. Are energy politics in a transit country different from in a source state like Azerbaijan?
Oil politics doesn't dominate Georgia as intensely as in Azerbaijan: it's not as thoroughly part of the system. As a result it's also easier to overthrow the government. Aliyev's control over the oil in Azerbaijan and his relationship with BP makes it very hard to change the regime. OK, Georgia's regime has only changed once in the same time period, from Shevardnadze to Saakashvili, but that is one time more than Azerbaijan. The social and economic politics in Georgia are very different. Both Georgia and Azerbaijan have had wars since independence, but Azerbaijan was fighting its neighbour Armenia, while Georgia's conflicts have been with internal separatist movements, into which Russia has intervened.
However there are also similarities: as in Azerbaijan the two Georgian regimes tried to use the pipeline both to maintain control and to identify themselves with Western power and identity. In Georgia this took the form of a strong identification with American neoconservatives. When you drive to the airport in Georgia you travel along the 'George Bush highway', passing a big smiling picture of George Bush, waving at you. In Azerbaijan most streets like that will be called 'Heydar Aliyev', with posters of him everywhere. Georgia has managed to identify itself quite successfully with US power. It sent a lot of troops to Iraq, and there have also been a lot of American troops training the Georgian army. When I flew out of Georgia in 2005, there were only four other civilians on the plane, and everyone else was an American soldier. That was largely aimed at the regime maintaining control over the separatist movements in Abkhazia and South Ossetia. But that presence of foreign troops was because of the pipeline, and indeed the training bases are located along it.
The way it plays out in Georgia is different to how it plays out in Azerbaijan and in Turkey. But all along the route of the pipeline there is a consistent militarisation of parts of the countryside, of people's villages and land, which makes day-to-day life there difficult.
You quote one of BPs lawyers, who helped draft the Host Government Agreements which gave legal status to the pipelines, boasting: 'without having to amend local laws we went above them or around them by using treaties'. How were the host agreements formulated and what status do they confer on the pipelines and their operators?
This was a very clever move by BP. They signed Host Government Agreements in Azerbaijan, Georgia and Turkey, and managed to exempt themselves from pretty much all local regulations, except for those in the constitutions of those states, by establishing this other legal context that was framed as an international agreement. This meant that they were no longer subject to Georgian or Azeri or Turkish regulations. It also meant they weren't subject to regulatory improvements, because the legal context was fixed at the time the agreements were signed, a time when Turkey, Azerbaijan and Georgia had relatively weak regulations. So the agreements effectively removed those countries' ability to improve their regulations on human rights, the environment, wages, and so on.
What political conclusions would you want to draw from all this, for instance at the policy level?
Broadly speaking we think that the oil industry needs to have less political control, and that our societies and economies need to be less tied to corporate and colonial power. There are various policy changes that can connect to that, ranging from organisations like the Tate not taking oil money, to banks, like RBS, not funding dodgy pipelines, or even the oil industry, period. For a bank to be funding new pipelines and oil extraction nowadays just isn't acceptable. But they particularly shouldn't be funding especially dodgy and controversial pipelines.
The Foreign Office shouldn't be pushing for an expansion of BP operations in Azerbaijan or for that matter in Egypt. It shouldn't be supporting continued militarisation in Azerbaijan. And it shouldn’t be enabling the institutional credit that the Aliyev regime gets from participating in the Extractive Industries Transparency Initiative (EITI) process, which allows it to present itself as running a transparent oil and gas industry, while still clearly running a regime of mass corruption and abuse of power. The respect the Aliyev regime gets derives partly from DFID's role in championing the EITI process, and its accepting Aliyev's record as a success. That's also a policy that needs changing.
Could you mention some campaigning groups which exist around these issues?
There are lots. Liberate Tate has been working intensely on trying to get BP out of the Tate; Platform and others over the years have challenged RBS's role in funding dodgy oil and gas projects; there's a new campaign trying to redefine energy corridors; there's a lot of work being led by Jubilee Debt Campaign on Export Credit Agencies and their role in financing controversial projects; and so on.
There are many specific groups, but at Platform and in the book we think it's important to recognise that it's the structures of society and the economy which need shifting. It's not enough for us to win on one policy or one campaign, welcome though that would be, so what's particularly exciting for us is the interlinking of these different movements and organisations. We need a wider shift if we're going to move London away from being an oil city and a colonial power.
Read an excerpt from The Oil Road here.
Jamie Stern-Weiner co-edits New Left Project.
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The Oil Road
Below is an excerpt from The Oil Road: Journeys from the Caspian Sea to the City of London by James Marriott and Mika Minio-Paluello, an important new book from Platform tracing the journey of Caspian Sea oil into Northern Europe, and exploring how lives and politics along the route of the pipelines have been transformed.
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BTC 671 KM – KP 484 – კრწანისი (KRTSANISI), GEORGIA
Leaving the US military base behind, we drive through a dusty valley strewn with plastic bags. As Krtsanisi village appears in front of us, we spot the markers of the BTC and SCP pipelines on our left. For the past 20 kilometres these two pipelines have run on a path quite separate from Baku–Supsa, which swings north of Tbilisi. From now on our journey will follow BTC as it heads for the Turkish coast at Ceyhan. At Krtsanisi the marker posts show the two lines climbing up the hill, heading straight for the village. As we approach, we see marker 475 km within 25 metres of the buildings. The pipes run under the land between the houses and the local school.
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This four-street village has only about a hundred homes. Each is set in its own fenced-in plot of land, used for cattle-grazing or dotted with fruit bushes. The paths between the houses are unpaved. Today they are dry and dusty, but when it rains they must turn to mud. There are few people outside.
A man in his fifties, wearing slippers, joins us on the path outside his house. He explains that the pipelines are bad for Krtsanisi: ‘How can they not be? They run though the village.’ Petitions had been made before the construction period, demanding resettlement for the whole community. BP refused, saying the villagers would be safe, but the man questions whether this is possible when the pipelines run so close to people’s homes. Although willing to share these thoughts, he is not particularly forthcoming. His neighbours are even less open to speaking. Whether this reflects a suspicion of outsiders or a fear of the consequences of talk- ing to them is unclear.
After walking through the village, Manana brings us to the home of the Pangani family. A woman in her thirties, talkative and extrovert, invites us into her front yard. Bright quilts hang from the second-floor veranda, airing in the sunlight. Her husband, a large man in a pale tracksuit, is casting seed to a flock of grey and speck- led hens with thick feathery legs. Introducing herself as Pikria, she seats us on a bench in a strip of shade, and starts talking. Manana translates for us.
‘We have a small plot’, Pikria says, ‘but we don’t know if we are still allowed to access it because it’s close to the pipeline.’ She explains that when the contractors were digging the trenches, they ruined the irrigation channel that brings water to the fields. ‘So now everything is very dry. The land is not much use without water. BP used to send the police force instead of coming to speak to us themselves.’
We are joined by Pikria’s mother, Vardo. When she talks, Vardo’s fingers are more expressive than her words, moving in time with her argument and empha- sising her statements. ‘In the beginning we wrote letters and made petitions, asking to be resettled somewhere else. They didn’t listen to us, so the people of the village made many protests. We went to Tbilisi and demonstrated outside govern- ment offices. We also blocked the highway leading to Rustavi. But the government wasn’t listening – they sent the spetznaz. It was a very bad situation; they even beat the children. The people tried to block the pipe-laying in the trench, and so the spetznaz attacked us again. It was so bad that it was on the international TV. Relatives in Greece and other countries were phoning to check up on us.’
The sun beats down. The narrow line of shade covering our bench gets thinner and thinner. The Panganis insist that we come inside and drink something. An old episode of The Bold and the Beautiful is showing on TV, dubbed into Georgian. One wall is covered with an array of icons – images and newspaper cuttings of Jesus, St George and the Dragon, and Saint Nino.
Vardo explains that differing compensation payments to the village’s 115 fami- lies caused division, tension and ‘great tragedy in relationships in the village’. She feels this partly explains why people in the village would not speak to us. ‘Some people in the village are afraid of others – that’s why they won’t speak. But I think Saakashvili is enough to be afraid of.’
Vardo is not sure how long the village has been here, but it is a settlement made up entirely of refugees. Most of the other families are from the mountain region Svaneti, displaced by landslides, but the Panganis are from Abkhazia. ‘We came sixteen years ago, after my husband was killed during the war. First we lived in a cramped school in Tbilisi.’ Like Gusein, near Gori, they must have come to Krtsanisi when they knew that their return to their home would not be swift; they have remained here since. Perhaps Gusein, too, will still be living in his cube of a house in fifteen years’ time. ![](https://img1.daumcdn.net/relay/cafe/original/?fname=http%3A%2F%2Fwww.newleftproject.org%2Fimages%2Fuploads%2Foilroadpipeline1_thumb.jpg)
A bowl of yellow apples from the garden is already on the table, alongside a plate of fig rolls broken into pieces. While her mother makes coffee, Pikria holds forth, balancing on the end of the sofa. ‘I think the pipelines bring a great threat to our village. Our home has become a very dangerous place. We are surrounded on three sides, by the pipeline and several military sites. There is much shooting – we live in a corridor of violence.’ She explains how both Georgian and US soldiers often train in the village, running down the paths between the houses. ‘Sometimes I walk out of my gate and find men in camouflage with guns crouch- ing behind my fence – I’ve screamed several times. I don’t understand, why do they do this in our village? I think maybe it’s because the pipeline is so close. Many of us experienced the war in Abkhazia, so it’s easy to make people panic.’
It seems this is how the US Special Forces teach their Georgian students ‘ground combat skills’ and ‘urban operations’. Nearby villages simulate Iraqi or Afghan communities, and the Pangani family have become unwitting bystanders in military training exercises.
Pikria feels the village’s position is especially dangerous, given the new tension with Russia. She explains that, during the recent war of August 2008, they could hear distant bombs falling and were frightened. ‘The easiest way to impact the military base would be to bomb the pipeline; then the village would be gone.’ She says that during the pipeline construction the villagers forced BP into meetings over safety, but felt they received no answers. The issue even went to the local court: ‘I’m a lawyer, so I observed the court hearings over our disputes. But it was always delayed. In the end it came to nothing.’ We think of the craters near Alkahi Samgori, only a few kilometres to the east.
While Pikria’s speaking, her husband turns the TV volume up to watch the news. It briefly shows an opposition rally and then we spot Saakashvili outside the Ministry of Interior. Seeing him, Pikria curses. ‘Satan. The war with Russia was his fault. Always emphasising how strong the Georgian Army is and trying to provoke. All he is good for is designing pretty and pointless fountains.’
Pikria is smart: she knows who is responsible. Soon after we arrived, she had mentioned the name Ed Johnson. General Manager of BP Georgia until 2005, Johnson oversaw the company’s lobbying of Shevardnadze and the relationship- building with Saakashvili after the Rose Revolution; he was in post during the pipeline construction period, when the riot police battered the Krtsanisi villagers.6
It is rare to hear people along the pipeline name names – usually it is just ‘the company’ or ‘BP’ or ‘BTC Co.’. One of Pikria’s first lines to Manana was: ‘How do we sue Ed Johnson? Can we do this in England or America?’ Here is someone who has identified an individual who she believes is responsible for her predica- ment, and wants to hold them judicially accountable. She knows it will be impossible to hold him to account in Georgia, but hopes that the British or American judicial system might be fairer. The sad reality is that getting Johnson into court would be challenging. Persuading a UK or US court to hear cases on a company’s practices abroad is difficult – achieving a guilty verdict harder still. So, for the time being, the Texan Ed Johnson need not worry about being called before a jury, and can focus on his job expanding BP’s offshore platforms in Norwegian waters.
This large living room, with its sofas covered in drapes, reminds us of the hours we spent in the house of Mehmen in Hacalli. How different the response in Azerbaijan is to the impacts of the pipeline from that in Georgia. Mansura Ibishova in Qarabork seemed powerless even though BTC and SCP effectively passed through her home. She placed faith in the idea of writing to President Aliyev. Mehmen and his neighbours were intimidated by the Executive Power in their village, who was effectively protecting BP’s assets. Here in Krtsanisi, as at Rustavi, residents had blockaded the construction sites, and thereby succeeded in bringing the issue to the attention of national and international media. Pikria knows perfectly well that President Saakashvili will not defend her from the actions of Ed Johnson’s company. It seems to us that the determination of these Georgian citizens to defend their rights has been greatly strengthened by the work of Manana, Keti and their colleagues, whose position is so much less beleaguered than that of Mayis.
Eventually, Vardo announces that they need to tend their cattle; it is time for them to be taken to their pastures. Bidding farewell, we see the six family cows already gathered by the gate, waiting patiently to amble out to their grazing.
'The Oil Road: Journeys from the Caspian Sea to the City of London' by James Marriott and Mika Minio-Paluello is published by Verso
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