Six Years Following the Completion of the Baku-Tbilisi-Ceyhan Pipeline, Prosperity and Transparency Limited in Azerbaijan
Crude Accountability has published a new report, “After the BTC Pipeline and EITI Validation: Where are Prosperity and Transparency in Azerbaijan?” examining the state of Western oil and gas company operations in Azerbaijan, particularly as pertains to environment, civil society and transparency.
The report assesses the current state of the oil and gas sector in Azerbaijan, reflects on concerns from Azerbaijani civil society regarding the operations of the sector, and offers recommendations to improve transparency and the state of human rights in Azerbaijan, the state of the environment, and to provide civil society with a stronger platform from which to work. According to the report, civil society has many concerns regarding transparency, participation, the beneficial use of resources and even its own safety.
Sarah Bedy, the report’s author, states, “Despite Europe’s strong desire for an alternative to Russian oil and gas, Western companies and international financial institutions operating in-country must encourage the Azerbaijani government to increase sector transparency and move away from corruption and repression. Important steps have been taken, but more must be done to ensure the safety of civil society and to enhance government accountability in order to meet European standards.”
Oil and gas industry accounts for 47 percent of Azerbaijan’s annual GDP and ninety percent of Azerbaijan’s exports, but only 1.8 percent of the country’s population is employed in the oil and gas industry. Those employed in the oil and gas sector earn salaries, on average, three times higher than those employed in other sectors.
With regard to foreign investment, BP’s investment in Azerbaijan totals over $30 billion and the company extracts one third of its global liquids production (oil and gas) in the country. Norway’s Statoil is the second largest Western investor in Azerbaijan’s oil and gas sector, operating the South Caucasus Pipeline and holding shares in BTC and in the Shah Deniz and Alov-Araz-Sharg fields. Other Western companies such as Exxon, Chevron and Total also have significant holdings in Azerbaijan.
Although Azerbaijan is a member of the Extractive Industries Transparency Initiative (EITI), according to civil society activists in the country, they have limited access to oil and gas related information. Among their recommendations is that Western governments, including the US and the UK, sign on to EITI, which would increase the pressure on their own government to disclose more oil and gas related information.
The report is the result of numerous interviews with civil society, oil company and Azerbaijani government officials. According to the research, civil society activists in Azerbaijan are concerned about the lack of transparency in the oil industry, the failure of the prosperity within the sector to translate into better lives for average citizens, corruption and the downward spiral of the government into corruption and authoritarian tendencies. Civil society organizations and journalists are under constant pressure from the authorities; they are regularly detained, beaten and even murdered.
For more information about Crude Accountability’s work and to read the full report, please go to www.crudeaccountability.org