Pictures: At Five Years Old, BTC Pipeline Moves Oil, Culture

The Start of the Line

Photograph by Amanda Rivkin

Workers check equipment at the Sangachal Terminal on the Caspian Sea, where offshore oil is processed and pumped for the beginning of its journey through the BTC pipeline.

It took a full year until the first oil pumped from the terminal near Azerbaijan’s capital of Baku reached the Turkish port of Ceyhan on May 26, 2006. The pipeline, buried along its entire length, ranges from 34 inches (.86 meter) to 46 inches (1.16 meters) in width. It takes 10 million barrels of oil to fill the entire line, according to BP, leader of the consortium that built and operates the project.

BP calls the pipeline “one of the great engineering endeavors of the new millennium.” But it is a feat seen by many as unique to the brief post-Cold War era. The world’s changed geopolitical and economic landscape and the altered picture of world oil demand mean that such a costly, complex project will not be repeated, say some observers and even project participants.

“A pipeline with a magnitude like this one can never be built again,” says former New Mexico governor Bill Richardson, who as energy secretary in the Clinton administration served as chief U.S. negotiator for the BTC deal. “It involved so many sovereign nations, so much construction, and so much political tension.”

Edward Chow, senior fellow in the energy and national security program at the Center for Strategic and International Studies (CSIS), says that certainly U.S. diplomacy, as well as the political vision of then-presidents Heydar Aliyev of Azerbaijan, Eduard Shevardnadze of Georgia, and Suleyman Demirel of Turkey, were key to the project.

But Chow notes that it was economics, not politics, that propelled the project. The plan remained stuck for years until BP’s purchase of Amoco in 1998 gave it a large economic stake (slightly over 30 percent) and broke the gridlock among the many players, Chow said. (In addition to the state oil company of Azerbaijan, the other partners are Chevron (due to its purchase of Unocal), Statoil of Norway, TPAO (the national oil company of Turkey), and a half-dozen other oil and energy companies.)

“My view is that you need a commercial champion that is both capable of pushing a project of this complexity forward, as well as having a sufficient economic stake in order to want to make it work,” says Chow. “Having six champions is not as good as having one capable and willing champion.”

Published June 8, 2011

The View From a Distance

Amanda Rivkin

Well-manicured lawns of villas sculpt the surface of the Absheron Peninsula on the Caspian Sea near Baku.

Azerbaijan was among the poorer of the Soviet states when it gained its independence in 1991. But the International Monetary Fund notes that Azerbaijan saw “spectacular growth rates” averaging 20 percent annually between 2003 and 2008, due to the expansion in oil production and the increase in government spending as a result of the new revenue.

Clearly, however, the new wealth has not reached everyone, as photographer Amanda Rivkin learned in her travels along the BTC pipeline route on a National Geographic Young Explorer grant.

Rivkin, a native of Chicago and daughter of a Latvian immigrant, remembers being told when she was young that her father was from a country that no longer existed. But Latvia, which was subsumed into the Soviet Union briefly before and then during the Cold War period after World War II, gained its independence along with its Baltic neighbors in 1991. Rivkin was fascinated by the post-Cold War geopolitical developments—especially with the story of the BTC pipeline.

“History must not be observed from too great a distance, my sole reason for being a photographer,” Rivkin wrote about her experience as a Young Explorer. She will be returning to Azerbaijan this fall on a U.S. Department of State Fulbright grant.

Richardson recalls his role in the moment of history that gave birth to the BTC pipeline idea. “The former Soviet countries wanted to disengage from the mother country; they wanted more financial and political independence. So they were anxious to cooperate with the [United States]. But Russia put enormous pressure on them to stay within the [former] Soviet sphere,” he recalls. “My job as secretary was to help these countries gain the financial independence from Russia they wanted and to secure those pipeline routes to benefit Western countries, not just Russia.”

Published June 8, 2011

Setting the Table for Change

Photograph by Amanda Rivkin

Both the local and expatriate elite mingle on the outdoor patio lounge of the popular Chinar restaurant in Baku.

Azerbaijan’s economy grew at the stunning rate of 25 percent in the first year after the pipeline began delivering oil. And the nation continued double-digit growth even during the global economic slowdown that began in 2008, thanks to the petroleum revenue.

It’s a rate of development that could only have been imagined in the immediate aftermath of the Soviet Union’s fall. Even though Azerbaijan by then knew it was home to giant offshore oil fields—Azeri-Chirag-Guneshli—it had no way to get the estimated 5 billion barrels of reserves outside the former Soviet space. All of the region’s infrastructure was directed toward Russia, and Azerbaijan in fact relied on Russia for its own energy needs. “The Soviet Union was also a union of oil and gas,” wrote Chow, of CSIS, in a report last fall.

The BTC provided freedom from the old Soviet sphere of influence. But the restraint that now binds Azerbaijan’s economy, observers agree, is its dependence on oil. Growth slowed when global oil prices fell below their mid-2008 highs. Although there has been some development in sectors like construction, banking, and real estate, the efforts to truly diversify the economy beyond oil and enact market-based reforms that would spread the benefits of petroleum wealth have lagged.

“Pervasive public and private sector corruption and structural economic inefficiencies remain a drag on long-term growth, particularly in non-energy sectors,” says the U.S. Central Intelligence Agency’s World Factbook analysis of Azerbaijan.

Published June 8, 2011

Oil’s Legacy on the Landscape

Photograph by Amanda Rivkin

Oil collects in pools beneath the derricks and tangle of overhead transmission lines at the Balakhany oil fields outside of Baku—among the earliest oil discoveries in Azerbaijan.

Although production from onshore fields today is modest in Azerbaijan, the veritable fountains of oil that gushed from this landscape in the latter part of the 1880s has tied the region to petroleum ever since.

The oil seeping from the ground in Azerbaijan was known for hundreds of years; Marco Polo had written about it in the 13th century. But in 1873—14 years after the first commercial oil well in the United States—drillers produced a notorious gusher here that raged out of control for four months, spilling what is now estimated to be millions of barrels of oil back into the sand.

Getting early Azerbaijan oil to markets, where it was then used for lighting, was a problem even then. In his Pulitzer Prize-winning history of the oil industry, The Prize, Daniel Yergin writes how in the 1870s, oil was shipped in wooden barrels by boat 600 miles north on the Caspian Sea to be transferred onto barges for a long journey up the Volga River to rail stations for further transit. He wrote that by the 1880s, 200 refineries were at work in the industrial suburb of Baku known as “Black Town.”

Published June 8, 2011

Leisure on a Littered Beach

Photograph by Amanda Rivkin

Men enjoy a picnic, with vodka and cigarettes, on the hood of a car on the Caspian Sea beach in Sixov, Azerbaijan.

Because the offshore oil installations are so close, and trash mars the sands, the Sixov beach is frequented by the downtrodden from regions beyond Baku.

Although the Azerbaijan government gains the revenue of its oil sales via the BTC pipeline, large oil infrastructure projects in general do not generally provide many working-class jobs to communities, said Chow of CSIS.

Although he couldn’t comment specifically on the BTC and its impact, he spoke in general about the construction of large pipelines. “From these projects in general you get a one-off benefit,” he explained in an interview. “The labor is employed during the phase of construction, and then there are a small number of jobs in maintaining the pipeline. There may be community development projects, but from the oil project itself there is generally not a long-term sustained benefit to the community.”

BP and its business partners in Azerbaijan spent $3.4 million on community programs in 2009, such as youth employment, business training, water improvement and other measures aimed at providing wider economic opportunity, according to the company's most recent sustainability report.

Published June 8, 2011

A Clampdown on Dissent

Photograph by Amanda Rivkin

Azerbaijani youth activist Emin Milli sat with his wife, Leyla Karimli, during a one-week respite from prison he was granted last summer to attend the funeral of his father.

Milli and a colleague, Adnan Hajizade, were jailed in 2009 after they produced an online video satirizing President Ilham Aliyev and his government; the film featured a man dressed in a donkey suit holding a news conference. The duo became known as the “donkey bloggers,” and human rights groups from around the world took up their cause and pressed for their release.

U.S. Secretary of State Hillary Clinton raised the issue publicly when she was in Baku during the summer of 2010. In November, after a year and a half in prison, Milli and Hajizade were freed.

But other government critics and journalists in Azerbaijan have not been as fortunate.

Eynulla Fatullayev, a newspaper editor and government critic, spent four years in prison before his release May 26 as part of a presidential amnesty marking the anniversary of the first independent Republic of Azerbaijan. The release also came just days after Amnesty International launched an international Twitter campaign to draw attention to his case.

In an interview with Voice of America shortly before Fatullayev's release, U.S. Ambassador to Azerbaijan, Matthew Bryza, said there have been "steps forward and backward" for civil liberties here. "There have been detentions in some cases of journalists, bloggers, and there have been releases as well," he said. "We want to do all we can to help Azerbaijan come to a place where the rule of law is what determines the fate of people... To achieve these goals,  there needs to be constant continuous effort and meaningful reform every day."

The New York-based press advocacy group, Freedom House, said six journalists were in custody at the end of 2010, and conditions for the media were poor. “Media freedom in Azerbaijan continued to deteriorate as President Ilham Aliyev clamped down on the opposition, independent journalists, and civil society,” Freedom House said in its annual report. “Azerbaijan remained a leading jailer of journalists, and the authorities used the threat of arrest and imprisonment to censor the media. . . . The government aggressively uses legislation to stifle media freedom.”

Published June 8, 2011

Celebrating a New Start

Photograph by Amanda Rivkin

Bride Inji Mamedova arrives at wedding hall in Baku, Azerbaijan. She’ll be marrying Fuad Gasimov, an engineer in the gas export department of the Sangachal Terminal. They are part of the urban professional class created by the BTC pipeline business.

Oil revenues are credited with the fall in Azerbaijan’s official poverty rate from 45 percent in 2003 to 11 percent in 2009, according to International Monetary Fund figures. BP's Azerbaijan operation employed a professional staff of about 2,200 by the end of 2009, 84 percent of them Azerbaijani citizens, according to the company's most recent sustainability report on its operations in the country.

But the IMF warns that overreliance on the oil sector is a threat to Azerbaijan’s economy. “While the oil boom has created extraordinary opportunities for economic and social development, it is highly temporary in nature,” said the IMF’s report on Azerbaijan last year. “Oil production is expected to peak in 2014, and oil reserves are expected to be exhausted in 20–25 years unless new discoveries are made.”

The IMF says that Azerbaijan’s greatest medium-term challenge is to develop its non-oil economy, and that reform in taxes, customs, and the financial sector would be needed.

Published June 8, 2011

Preparing for the World Stage

Photograph by Amanda Rivkin

After performing at the opening ceremony of the International Wrestling Final Golden Grand Prix in Baku last summer, Safura Alizade—Azerbaijan’s 2010 contestant in the Eurovision Song Contest—relaxes in the dressing room with her mother, Naila.

The 55-year-old Eurovision competition is one of the longest running television programs in the world, and also among the most-watched, with viewership estimated as high as 600 million. It is considered a forerunner of American Idol.

Although Alizade did not win last year’s Eurovision, her participation marked an achievement for Azerbaijan; the country took home the top prize this year and the opportunity to play host to the international competition in Baku next May. The nation was permitted to participate in the contest beginning in 2008, when Azerbaijani Public Television (ITV) became an active member of the European Broadcasting Union (EBU). The previous year, another broadcaster, AzTV, sought to participate but was denied membership in EBU because it was considered too tied to the Azerbaijani government.

On May 14, Azerbaijan’s Eurovision dreams reached fruition, when Baku’s Eldar “Ell” Gasimov and Nigar “Nikki” Jamal won the the 2011 edition of the pop contest with their duet, “Running Scared.” Government officials said the win reflected government policies aimed at developing youth and culture. And the victory gave Azerbaijan the prized opportunity to host the competition in 2012—an event that will surely put the international spotlight on Baku next spring.

Published June 8, 2011

Total Immersion in Oil

Photograph by Amanda Rivkin

Quliyev Jeyyub relaxes in a crude oil bath at the renowned Naftalan Health Clinic, 224 miles (360 kilometers) west of Baku.

The petroleum spa, established in 1926, is one of several such centers here that have long boasted the therapeutic qualities of oil. Bathers hope to relieve joints, revitalize skin, and improve metabolism by soaking in the warm, thick, black liquid. But they are only permitted a 10-minute soak amid the strong fumes before nurse attendants scrape them off and send them to the showers.

Published June 8, 2011

Holding on to Holy Tradition

Photograph by Amanda Rivkin

A Georgian woman looks on while a priest, seated against the tree, blesses a supplicant outside the Metekhi Church in Tbilisi, Georgia. The ceremony is said to bring both good fortune and healing powers.

Among the three nations traversed by the BTC pipeline, Georgia—in the center—is the only predominantly Christian country, and communities strive to maintain old religious traditions.

Published June 8, 2011

Poverty in the Shadow of Plenty

Photograph by Amanda Rivkin

With a bowl beside her, a child beggar sleeps on the street at midday on the main thoroughfare of  Rustaveli Avenue in Tbilisi, Georgia. Although the government of Georgia receives about $65 million in annual transit fees due to the BTC oil pipeline route across its territory, the nation has no mineral wealth of its own to exploit.

Thirty percent of Georgians live in poverty and the unemployment rate is 16 percent.

Published June 8, 2011

Shaken by Change

Photograph by Amanda Rivkin

Givi Gogoladze shows cracks he says appeared in the attic of his home in the village of Tadzrisi, Georgia, during the building of the BTC pipeline,  just 150 feet (50 meters) away.

The new underground neighbor in the Samtskhe-Javakheti region has not been a welcome one for Gogaladze, who also laments that a construction mishap killed a plum tree in his yard. But an engineering consultant hired by BP disputed his allegations of damage from the vibration of construction equipment. Gogaladze sought compensation for damages from the company, but was denied.

Published June 8, 2011

Close by the Wellspring

Photograph by Amanda Rivkin

People gather water from a natural spring source in Borjomi, Georgia.

The BTC pipeline runs nearby, through the mountains of Bakuriani that overlook the Borjomi valley in the Samtskhe-Javakheti region. Some locals and environmentalists worry that a mishap along the pipeline could threaten Borjomi mineral water, which is vital to the local economy.

The mountain ranges of the Caucasus were formed by the collision of African, Indian, and Arabian tectonic plates with the Eurasian plate, notes a BP geohazard report on the pipeline, which crosses through several areas of great seismic risk.

In a 2008 engineering lecture at Oxford University, former BP chief executive officer Lord John Browne of Madingly described how the BTC pipeline was laid in a trapezoidal trench filled with granular material to allow it to move if an earthquake occurred. “Contingency was made for the most serious seismic event envisioned over a 10,000-year period,” he said according to the speech as excerpted in Ingenia, the magazine of Great Britain’s Royal Academy of Engineering

Browne noted that the pipeline route allowed the oil to reach market without increasing tanker traffic through two narrow straits, the Bosporus and the Dardanelles, “reducing the risk of pollution on the banks of Istanbul, one of the world’s great cultural treasures.” He added that because the pipeline was buried, “it was possible in most cases to reinstate the land to its original condition.”

“Despite the inherent risks, an overarching aim of the project was to have a positive net environmental impact,” Browne said.

Published June 8, 2011

Clothed in Custom

Photograph by Amanda Rivkin

With fashion billboards in the background, women in full-length Muslim garments walk with a child from a city street in Erzurum, the first major Turkish city that the BTC pipeline traverses on its route west.

Erzurum, in the far northeast and just 4 miles (6 kilometers) from the pipeline is one of Turkey’s more conservative cities.

Published June 8, 2011

Nurturing A New Life

Photograph by Amanda Rivkin

Mariam Aptsiauri, kneeling, holds a three-day-old baby chick in her hands, while her neighbor, Gia Obgaidze, watches in Alakhi Sangori, Georgia.

Obgaidze says he received upwards of 100,000 Georgian lari (approximately $55,000) in compensation from the Georgia government for allowing the pipeline to traverse his once-fertile farmland. He says he used the money to start a new chicken farm and remodel his home. But the local attorneys’ association says  he likely is one of the largest recipients of compensation funds in the country. His neighbor, Aptsiauri, has so far received nothing; her court case has been open for six years.

Published June 8, 2011

Field of Broken Dreams

Photograph by Amanda Rivkin

Sixty-eight-year-old Rifat Yildiz, stands beside a marker for the BTC pipeline in the Kurdish village of Dagci, Turkey.

The land where he is standing actually belongs to a neighbor, Muaffer Akturk, who claims his farm income has been cut in half since the pipeline’s construction. Akturk’s case has been the subject of a long-running court battle.

Published June 8, 2011

Skirting Ancient Ruins

Photograph by Amanda Rivkin

The abandoned ruins of the city of Ani, Turkey, near Kars is a site of controversy that the builders of the BTC pipeline sought to avoid.

This city was once inhabited by Armenians. But they were driven out during World War I in an ethnic massacre. Afterward, the former Soviet Union ceded a portion of the historic Armenian homeland to Turkey. To this day, the history is subject of a deep rift, and the border between Turkey and neighboring Armenia is closed.

During the construction of the pipeline, pains were taken to skirt areas such as these historic Armenian ruins. And it was known that the United States did not want to see the pipeline traverse Iran.

But separatist strife is a feature of life in all three of the nations on the BTC pipeline route. In 2008, the BTC pipeline was shut down for three weeks after an explosion in eastern Turkey; Kurdish separatists claimed responsibility, although authorities never confirmed that sabotage was the cause.

Published June 8, 2011

Sorting the Catch

Photograph by Amanda Rivkin

Forty-year-old fisherman Mehmet Erzin bends over so one foot and one gloved hand are visible as he separates the biggest fish from his catch near Yumurtalik, Turkey.

One of the environmental concerns raised when the BTC pipeline was constructed was the risk to the fishing communities here. Because the tanker terminal is a security area, some of the fishing grounds have been lost. There have been press reports of complaints by fisherman about the restrictions, as well as concern that pollution—including supertanker traffic, discharge of water from the terminal, and other industrial activity—has depleted their stocks.

Published June 8, 2011

Bound for Foreign Ports

Photograph by Amanda Rivkin

Workers load Azeri crude oil from the BTC pipeline into an oil tanker, the Aegean Myth, at Ceyhan Marine Terminal in Turkey. It is a project that brings together the people and industries of many nations beyond Azerbaijan, Georgia, and Turkey: The ship workers are Filipino, the tanker is Greek, and it is setting sail full of oil to Rotterdam, the Netherlands.

“Long-haul pipeline projects crossing multiple international borders are rare—they can be counted on one hand,” wrote Chow of CSIS in his report on the pipelines of West and Central Asia. “The more national borders such projects cross, the more difficult and complex they are to complete.” In that context, he says, the BTC pipeline has to be looked upon as a major achievement.

But the geopolitics of the region today is so different from the immediate post-Cold War period that Chow said it is questionable whether such a project could be built again today. For one thing, currently there is a much closer relationship between Turkey and Russia, including on energy.

And an important new factor, he says, is China. The Kazakhstan-China oil pipeline, the most recent segment of which was completed in 2009, is longer than the BTC at 1,384 miles (2,230 kilometers) although it transports less oil. But Chow says China is willing to pre-invest in pipeline links with its Asian neighbors before economic volumes of oil are available. This speaks to China’s strategic concern in securing a diversity of oil supplies, and underscores that the world’s center of future oil demand growth lies to the east of the Caucasus, not west.

The more recent energy focus in Azerbaijan has been on natural gas, not oil, and whether another ambitious pipeline project will be developed to transport the fuel to the West--especially from the huge Shah Deniz gas field, also operated by BP. The field is offshore in the Caspian Sea, in close proximity to the oil fields that feed the BTC pipeline, and both rely on the Sangachal Terminal as delivery hub. Europe has sought a so-called Southern Corridor gas pipeline network from here through Turkey to help reduce its dependence on natural gas from Russia. Again, U.S. policy strongly supports the pipeline to the West. But costs and politics have been stumbling blocks.

Meanwhile, at the port of Ceyhan in Turkey, 1,447 tankers have been loaded with oil from the BTC pipeline since June 2006, says BP. That’s 1.1 billion barrels of crude oil pumped from the Caspian Sea and transported to the world across the centuries-old divides of culture, religion, geography, and politics.

Published June 8, 2011