SEO Header Title

By Lucy Wallwork, Open Oil

BAKU. March 29, 2013: Some time ago I wrote about my initial bewilderment at the Azerbaijani government’s touting of its EITI (Exactive Industries Transparency Initiative - ed.) record, given a personal experience of the country very much at odds with everything that the EITI stands for. Of course, the debate will always come back to the troubles of a broadly successful global mechanism overburdened with high expectations. But now, as the EITI hammers out a tighter set of rules to be finalised in Sydney in May, how far will the goal posts move? And what are the implications for access to information and broader social change in EITI ‘pioneer’ Azerbaijan?

Let’s take two palaces of culture. Both largely financed by oil revenues and both icons of booming petro-states. The first is Oslo’s $800-million Opera House, soon to the be the stage for the world’s first ‘oil opera‘. The second (set your Eurovision preconceptions aside, it’s still culture) is Baku’s Crystal Hall, costing a hotly debated $155-180 million.

BAKU. February 7, 2013: Azeri oil export declined by 15.3% in January 2013 compared with the previous month according to State Oil Company of Azerbaijan (SOCAR). The company reports that it exported 1.67 million tons in January 2013 (compared to 1.976 million tons in December). Last year’s highest export occurred in July (2.36 million tons). The Center for Economic & Social Development (CESD) is not optimistic about SOCAR’s oil output forecast for 2013, which projects an output of 44 million tons of oil in 2013, even though decline in this sector was already registered in the first months of year. CESD forecasts decline in oil output by 5% in 2013 based on its econometric models and PSA matrix.

BAKU. December 3, 2012: The State Oil Company of Azerbaijan (SOCAR) issued corporate bonds for the domestic market. The bonds will reach the market in early 2013. SOCAR'S president Rovnag Abdullayev said the company's decision was aimed at strengthening the domestic stock market of Azerbaijan.

"This year, we have issued bonds for the international market, and we got very good results. Why not do the same for the local market and revive the domestic capital market?" questioned the SOCAR president.

BAKU. November 29, 2012. Relations between the government of Azerbaijan and the British oil company BP, the operator of a number of key energy projects in the country, seem to have reached a new level of tension. A pro-government news agency news.az released an article that is sharply critical of BP and the United Kingdom. It cites Azerbaijani authorities discussing the possibility of replacing BP as the operator of the international consortium in charge of the Azeri-Chirag-Guneshli fields that provide most of Azerbaijan's current oil output.

Written in a typical neo-Soviet propaganda style of the Aliyev regime, the long and anonymous article by news.az goes to great lengths tying BP to the recent criticism of high-level corruption and repressions in Azerbaijan. As all media, except a couple of remaining opposition sources, is under the tight control of the Aliyev dictatorship, such articles mostly come at the government's orders.

BAKU. November 21, 2012. Azerbaijan, the largest oil producer in the former Soviet Union after Russia and Kazakhstan, cut crude exports in the first nine months as production declined.

The Caspian Sea nation saw oil exports fall 8 percent in January through September to 28 million metric tons, the State Statistics Committee based in the capital, Baku, said by e-mail.

BAKU. November 8, 2012. SOCAR President Rovnag Abdullayev said that the proposals were received from the partners of the project "Shah-Deniz" who would like to participate in the construction and operation of the Transanatolian gas pipeline (TANAP). SOCAR owns  in the project  80%, and 20% is owned by Turkey’s state company BOTAS.

TBILISI. November 1, 2012: Azerbaijan’s state oil company, SOCAR, became sole distributor of natural gas in Georgia, except of the capital city Tbilisi, after acquiring Itera-Georgia.

SOCAR President Rovnag Abdullayev told reporters in Baku that the cost of the acquisition was confidential but not large, Reuters reported.

Itera-Georgia, a subsidiary of Itera International Group of Companies, has confirmed that talks on sale of the company, ongoing for more than a year, were finalized this month. According to Itera-Georgia it is supplying natural gas to 170,000 customers in Georgia’s provinces.

BAKU. October 15, 2012: Azerbaijan's Energy Minister Natiq Aliev has said there should be tighter control over the work of an international consortium led by British Petroleum.

Aliev said production at the Azeri-Chirag-Gunsehli site was "abnormal."

The Energy Minister's comments come after President Ilham Aliev said on October 12 that "numerous mistakes" by the BP-led consortium might have cost his country some $8 billion in lost revenue.

ALEXANDRIA, VIRGINIA. October 14, 2012. A US-based watchdog group Crude Accountability published a report this month titled “After the BTC Pipeline and EITI Validation: Where are Prosperity and Transparency in Azerbaijan?” As the title suggests, the report is critical of the Azerbaijani government’s lack of full transparency and its failure to transfer the nation’s oil wealth into better living conditions for the general population. Wide-spread government corruption, suppression of freedoms and rights, persecution of civil activists and environmental concerns were also cited in the report.

“Azerbaijan remains politically repressive”, says the report, further stressing that “freedom of speech and assembly are not protected, and civil society faces constant threats to its advocacy and even to its existence.”

By Matthew Hulbert

These are worrying times for BP. Still dogged by the 2010 Macondo spill in the Gulf of Mexico, and trying to secure its long term position in Russia, Azerbaijan has launched a scathing attack on the British company for letting output drop on its key Azeri-Chirag-Gunashli (ACG) field. What’s worrying for BP, is not just that the attack comes directly from President Aliyev, but that it’s a very deliberate ‘smoking gun’ against the London major when you consider that everyone has long known that ACG figures were unrealistic. In effect, Aliyev is setting BP up for a fall. But the question he hasn’t asked, is whether he’ll end up doing himself far more damage in the process?