BP in Azerbaijan
As Keir Starmer prepares to address COP29 in Baku, we take a look at the fascinating and troubling history of Azerbaijan’s biggest foreign investor: BP.
Azerbaijan’s president Ilham Aliyev and then BP CEO Bob Dudley at Davos, in 2019.
Keir Starmer is in Baku, Azerbaijan today for the 29th UN Climate Change Conference - better known to most of us as COP.
It’s fair to say that the choice of Azerbaijan as COP29 host is controversial. It’s a petrostate with a grim human rights record that includes the recent imprisonment of climate activists.
But British lobbyists have been happy to greenwash Azerbaijan’s reputation. As this newsletter recently revealed, Boris Johnson’s former business chief is among a clutch of consultants being paid a fortune to spin for the Baku government during the summit.
Many world leaders have decided to skip COP this year. But Starmer will be there, unveiling what has been reported as “an ambitious new UK climate goal” this afternoon.
Among the prime minister’s audience in Baku will be thousands of fossil fuel lobbyists and a major contingent from Azerbaijan’s biggest foreign investor - BP.
I’ve written a piece in the current issue of the London Review of Books about the fascinating and troubling history of BP in Azerbaijan. It’s also partly about how British political leaders helped protect BP’s interests in Azerbaijan while London has washed the money and reputation of Baku’s elites.
The full essay is here but I thought it was worth highlighting some of its key points.
British politicians have long helped BP in Azerbaijan
Today, BP is one of the biggest fossil fuel firms in the world and one of the largest companies listed in London. But back in the late 1980s, BP was in trouble, cash-strapped and vulnerable to takeover post-privatisation.
Prime minister Margaret Thatcher, sensitive to the danger of an iconic British brand disappearing, told BP’s then managing director of exploration and production John Browne to look to the disintegrating Soviet Union to “start some investment rolling”. Browne eventually struck a deal in Baku - Thatcher, by then out of office, jetted in from Hong Kong to seal it.
In 1992, Margaret Thatcher became the first Western leader to visit the newly independent Azerbaijan when she was flown in at BP’s behest to secure a lucrative oil deal. Browne recalled in his autobiography that Thatcher ‘was delighted to be asked’. The government in Baku was broke, isolated and at war with Armenia. After promising to establish scholarships in Britain for Azerbaijani students and to support efforts to reclaim national treasures from Moscow, Thatcher handed over cheques worth $30 million to Azerbaijan’s then president, Abulfaz Elchibey. That sealed the deal: BP signed a contract with the state oil company, Socar, giving it certain exclusive rights; it would soon be running operations in the Chirag oilfield and the vast gas field at Shah Deniz.
In the intervening decades Azerbaijan has become so important for BP that when the Deepwater Horizon spilled more than three million barrels of oil into the Gulf of Mexico in 2010, Baku was one of the first places Tony Hayward, the then CEO, visited to garner support.
BP is steadfast in its support for Azerbaijan’s authoritarian regime
Azerbaijan has been a hereditary autocracy since Heydar Ailyev seized power in 1993. In the last few years, relations between the Aliyev regime and the West have become more fractious.
The invasion of Nagorno-Karabakh last year was criticised by the US, France and other former allies; the UK called on Azerbaijan to “cease its unacceptable use of force and return to dialogue”. But one player has remained steadfast in its support for Aliyev: BP.
In September 2023, senior BP executives travelled to Baku for the centenary of the birth of Heydar Aliyev, a former KGB officer who bequeathed the presidency to his son, Ilham, when he died in 2003. The celebrations were held at Gulustan Palace, a Soviet-era complex overlooking Baku Bay. BP’s chairman, Helge Lund, and its former CEO Lord Browne had come, as a corporate press release put it, to ‘pay tribute’ to Heydar’s ‘exceptional contributions to the development of Azerbaijan and the entire region’. The previous day, Ilham Aliyev had seized the breakaway region of Nagorno-Karabakh in a lightning assault, expelling more than 100,000 Armenians from their homes. Azerbaijani forces have been accused of extrajudicial killings in the region.
BP, and Britain, smoothed Aliyev’s ascent to power
BP has long been rumoured to have been involved in the coup that brought Aliyev to power. (The company has always denied this.)
In 2007, Leslie Abrahams, a former BP employee, told the Mail on Sunday that BP had worked with MI6 in the early 1990s to help bring about a more pro-Western, pro-business regime in Baku.
Abrahams claimed that in the course of just four months the company had spent more than £5 million plying local figures with caviar, champagne and call girls, most of whom were also in the employ of the KGB. (The story is no longer on the Mail website, for some reason, but you can read it here.)
BP has certainly played a major role in post-Soviet Azerbaijan. In the early days, the British embassy was even run out of BP’s Baku office. But, as James Marriott of the campaign organisation Platform, co-author with Mika Minio-Paluello of The Oil Road, told me, the most important thing is “how BP helped form a state that would assist in meeting the company’s needs.”
By 1993, BP had already spent millions of pounds in Azerbaijan. But it was still a long way from being ready to produce oil in the Caspian and there was a risk that, in the turmoil of the early post-independence years, a new regime might come to power and seize its assets. BP threw its weight behind Aliyev as the best guarantee of a return on its investment. The British government followed suit. In February 1994, Aliyev made an official visit to the UK. He met the prime minister, John Major, and the foreign secretary, Douglas Hurd, signing a ‘declaration on friendship and co-operation’ between Britain and Azerbaijan. The UK made representations on Azerbaijan’s behalf at the UN, while British special forces and attachés provided support to the Azerbaijani military. When Aliyev returned to the UK in 1998, he had an official meeting with the queen and posed for photographs with Tony Blair at Number 10. Blair later became an advisor to a BP-led consortium in Azerbaijan.
4. BP has stood by as Azerbaijan abuses human rights
Aliyev has used COP as a pretext to crackdown on dissent. In the run-up to the summit, the number of political prisoners in Azerbaijan’s jails has grown, tripling since the start of last year to more than 300. Some have close ties to the UK.
In July 2023, Gubad Ibadoghlu, a research fellow at the LSE and a vocal critic of the Aliyev regime, was arrested while visiting family in Azerbaijan. Ibadoghlu, who suffers from a serious heart condition, had previously conducted in-country research for BP and worked alongside it on an anti-corruption initiative.
Ibadoghlu’s son, Ibad, told me that he had appealed to BP for help. ‘Even though my father worked for them for so many years, they have no interest in his case. BP is acting as if he never existed.’
Journalists, too, have increasingly come under attack. Almost the entire Azerbaijani media is under state control. Independent news sites that operate from abroad are blocked. In August, six journalists at Abzas Media, which has reported on the business dealings of Baku’s elite, were arrested and charged with crimes including money laundering and forging documents.
Azerbaijan’s London Laundromat
The British government routinely expresses ‘concerns’ about human rights in Azerbaijan, but has done little to prevent the country’s oil money washing up in London. Meanwhile, London law firms have helped Azerbaijani politicians sue investigative journalists who have exposed the scale of the ’Azerbaijani laundromat’.
The Pandora Papers leak of offshore documents in 2021 revealed that Aliyev’s children, father-in-law and associates controlled a London property empire worth nearly $700 million through a network of shell companies. Among the holdings were three Knightsbridge apartments and four commercial buildings in Mayfair owned by Aliyev’s son, Heydar Jr, who is expected eventually to succeed his father as president. Between 2012 and 2014, the Azerbaijani regime allegedly funnelled £2.2 billion through UK-registered companies to launder money and pay bribes. Beneficiaries included members of the Council of Europe’s parliamentary assembly. The now defunct European Azerbaijan Society was the second highest-spending foreign lobby group in the House of Commons between 2010 and 2017, taking dozens of MPs on all-expenses-paid trips to Baku.
Beyond Petroleum? Not for BP.
COP is supposed to be about tackling climate change but thanks to undercover reporters from Global Witness we know that Elnur Soltanov, Azerbaijan’s deputy energy minister and chief executive of Cop29, is keen to use the summit as an opportunity to strike new oil and gas deals.
BP’s climate commitments look similarly questionable. The ‘beyond petroleum’ rebrand was ditched a few years ago and BP is planning on spending £8.5 billion over the next 26 years in oil and gas drilling in Azerbaijan, according to recent reports.
Among the newly commissioned projects is the Shafag solar plant in the Jabrayil region, which was retaken by Azerbaijan in the Nagorno-Karabakh war of 2020. Aliyev’s government has announced plans to establish ‘green energy zones’ across the territory it seized – territory which the UK’s current foreign secretary, David Lammy, has referred to as having been ‘liberated’. Gary Jones, BP’s regional president for Azerbaijan, Georgia and Turkey, has used similar language, telling an audience at Energy Week 2022 that Karabakh is the ‘perfect opportunity for a fully net-zero system’ that ‘can be built fresh from a new start’. ‘If there is a contested land, one way to legitimate it is to have an international company build on it,’ says Louis Wilson, head of fossil fuel investigations at the NGO Global Witness. He points out that the solar energy produced at Shafag will be used to power the fossil fuel industry.
With 2024 ‘virtually certain’ to be the world’s warmest year on record, there is something particularly jarring about a London-listed company building solar farms in Azerbaijan to help keep pumping fossil fuels.
Oh, and by the way, BP reported profits of £10.7billion last year.
I also wanted to flag the latest from friends of Democracy for Sale, the Disorder Podcast.
The Disorderer-in-Chief is now President-Elect. We at the Disorder Podcast can’t say we didn’t see it coming. In fact, we predicted on the pod and on our Ordering the Disorder substack that he was favourite to win. But as the post-mortems are bouncing around the internet, we must ask (and we do in today’s episode of Disorder) what one factor most led to this outcome: was it the economy, was it woke gone overboard, was it misinformation, was it the anti-incumbency mood? Which factors predominated in making Harris unelectable? And how did the Democratic party allow itself to be fooled again and fight the election on losing issues? And were Americans fooled by false promises? And duped by misinformation about the issues? And given Trump’s resounding victory what is next – will he deport millions of Americans, launch a trade war that drives inflation skywards, and give Musk the keys to the regulatory castle to endlessly enrich himself – and will the American electorate care in 4 years’ time?
In today's episode (listen here), Alex Hall Hall and Jason Pack discuss the major reasons underpinning Trump’s win. Including: the cultural shifts in the United States, the fact that Trump’s criminality and venality may actually be seen by many of his voters as a positive (i.e. they voted for him not despite the fact that he is a convicted felon but BECAUSE OF IT), and how the Republicans were brutally effective in their advertising and narrative crafting. Plus: listener questions tackle topics like the future of Europe and NATO, could Trump change the constitution, could Trump actually deliver what people want, what about Bitcoin, and whether America could become yet another Russia-style oligarchy.
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