The Oil Road

by James Marriott

  We chat with two men from the village committee, but realise quickly that they do not want to talk. ‘What about the pipeline fire?’ we ask. ‘We had no problem with this.’ ‘Can we walk through the village up onto the mountain?’ ‘No, there are wild bears there, and wolves; they are very wild and will harm you.’ ‘Can we just walk through the village?’ ‘No, and we’re busy now.’ So basically: ‘go away!’ Fair enough – after all, how would we respond to a group of Turkish investigators in an English village asking questions? Nevertheless, their unfriendliness is in striking contrast with the openness of Azeri, Georgian and Kurdish villagers.

  Having spotted a petrol station further east, we walk towards it along the side of the E80. We pass the pipeline repair works by the ruptured valve again, the orange-jumpsuited workers now eating packed lunches in the shade of a crane. The stares of a private security guard on the access slope warn us against trying to engage the site workers in conversation.

  The attendants at the petrol station are more talkative: ‘The first night, I heard an explosion, like a tyre blowing out, and then the fire started. The fire was so strong that it was too hot to be here, one kilometre from the flames. It felt like everything would melt. The smoke would drift over here and everybody would start to cough. They closed part of the road because it burned for a week.’

  In the car back to Refahiye, the same taxi driver tells us more: ‘They evacuated everybody from Alacaatlı for seven nights. They came to Refahiye. The firemen were afraid that the forest would catch fire. Fire engines came from Erzurum, Erzincan, Sivas, Ankara. Maybe it was sabotage, maybe not. If somebody wanted to blow it up, why not do it in the mountains far away from the road, where they won’t get caught?’

  We get back to the motel and try to piece together what happened. Whatever the details, there was a major international incident here: a massive fire that burned for a week, a column of smoke rising up from the valley floor, ash falling onto crops, villagers evacuated. Fire engines, helicopters, the minister of energy and natural resources, soldiers swarming over everything. Even now, nine months later, the engineers are still at work.

  The reticence of villagers in relation to the incident shows how the pipeline is seen by many as a state institution that is not to be questioned. In the national debate, BTC features as a government project of strategic significance and a source of pride. Consequently, concerns about the pipeline voiced by social movements, affected communities and the media have to struggle against the dominant force of nationalism.

  The pipeline’s identity as the property of a foreign company is obscured. In this way it suits BP to have BOTAŞ construct and operate the Turkish section of the pipeline under the Turnkey Agreement. We had failed to appreciate this sleight of hand when lobbying the UK parliament about the poor standard of BOTAŞ’s work. We wonder how planned this was. Did the BP team articulate this benefit in its strategic plans of 2000 or 2001, or was it an unforeseen but happy consequence?

  It seems we will leave Refahiye without a definitive answer on the cause of the explosion that August night. But we now appreciate how Turkish nationalism provides BP with a first line of defence against criticism and investigation, just as it does in Azerbaijan. And we understand a little better what happens if the pipeline explodes and burns. It makes us think about all the places we have visited where BTC passes close to houses. Block Valve 30 was, thankfully, far from habitation. We reflect on how close the two oil and gas pipes run to Mansura Ibishova’s kitchen in Qarabork, just forty kilometres from an unfinished war – and how Jeff Jeter at the EBRD had reassured us that the pipeline was safe, since the construction had conformed to British standards.

  ANKARA, TURKEY

  The E80 takes us west to Sivas, once the capital of the Seljuk Turks, and a halt for merchants on their journeys from Central Asia to Europe.

  We leave the coach and reboard the train for Ankara, which carries us 500 kilometres away from the pipeline, to the capital of modern Turkey. In 1892, the railway from İstanbul reached what was then still a small town in the wildness of Anatolia, famous mostly for its Angora wool. Built by German engineers, the line was part of the industrialisation of the Ottoman Empire, emulating the Baku–Batumi Railway, which was built by French engineers across the Caucasus.

  After a slow passage through a hot day, we eventually pull into Ankara. This is not the original nineteenth-century station, but a Bauhaus-style celebration of the Modern – again built by Germans, this time in the 1930s for Atatürk’s Republic of Turkey. Mehmet Ali is delighted to be back in his home city, and hurries us towards the district of Kızılay to meet up with friends. After the great spaces of eastern Turkey, it is a shock to be shoved into the press of people in the subway. Everywhere vendors are selling fresh orange juice, pretzel-shaped simit snacks and a kaleidoscope of newspapers.

  After the completion of the Baku–Batumi Railway in 1884, oil from the shores of the Caspian was carried to Western Europe and beyond by ship from Georgia’s Black Sea port. Tankers from Batumi steamed down the narrow Bosphorus, through the centre of İstanbul, and out into the Mediterranean. In the 1990s, as the new Oil Road was being planned, this pattern could have been repeated. Crude from the Azeri–Chirag–Gunashli oilfield could be piped to Supsa and Novorossisk on the Black Sea, and there loaded on to tankers bound for the oceans and the world market. However, the speed and scale at which the companies wanted to extract the resource from the ACG field meant that tanker traffic through the Bosphorus would have grown radically. The Turkish government in Ankara was understandably opposed to increasing the risk of an oil disaster in the heart of İstanbul.

  With restrictions on the volume of oil that could pass through the Bosphorus, and the US government determined that crude should not flow westwards through Russia, hammering out a deal for a pipeline across Turkey was considered an important US priority. Oil had been pumped from the Chirag offshore field down the pipeline from Baku to Supsa for almost a year when President Clinton ordered that a ‘Caspian Finance Center’ be established in Ankara in October 1998. This formed part of his administration’s political and financial drive to make BTC a reality. By the following January, the office was up and running at the US embassy in the Turkish capital. Led by Director Peter Ballinger, the Center was staffed by officials seconded from three American trade and export credit agencies. It aimed to spearhead financing for regional energy projects.34 According to the US Center for Strategic and International Studies, Ballinger’s Center gave the United States more leverage to influence pipeline decisions in its favour ‘by providing a beachhead through which American economic power can be projected into the region’.35

  Just a few months before, Clinton had appointed a special advisor for Caspian Basin energy diplomacy, Richard Morningstar, who now shuttled between the US embassies in Ankara, Tbilisi and Baku. Morningstar, who had previously been ambassador to the New Independent States of the Former Soviet Union, took up where his predecessor Sandy Berger had left off, bringing a renewed enthusiasm in Washington for westbound pipelines from the Caspian. Reviving the Coordination Group on Caspian Energy, Morningstar insisted that department representatives from State, Energy, Commerce, USAID and CIA met every three weeks to conduct the short-term strategic planning that was needed to push both the oil companies and the governments of Azerbaijan, Georgia and Turkey to build the pipeline that the US demanded.

  It soon became apparent that the BTC pipeline was liable to be prohibitively expensive – and significantly less commercially viable than the alternative proposals of pumping the oil to Iran, or transporting it through Russia. Washington was explicitly opposed to these options, but the administration needed to find a way to make BTC attractive to the private oil companies. Hence Ballinger’s Caspian Finance Center argued strongly that US export credit agencies should provide American taxpayers money to support BTC. To do this, both Ballinger and Morningstar had to persuade legislators to sidestep US sanctions against Azerbaijan, which remained from th
e war with Armenia.36 Ballinger achieved his goal: eventually the US government provided hundreds of millions of dollars in subsidies for the construction of BTC.

  Meanwhile, Morningstar’s diplomacy was directed at pushing the governments of Azerbaijan, Georgia and Turkey to offer tax concessions for construction, and to agree to charge the lowest fees for the transit of oil across their countries. As he asserted, ‘Turkey clearly shoulders a major responsibility for providing incentives required to make Baku–Ceyhan as commercially attractive as possible.’37 And US government officials conveyed ‘their desire that Ankara impose a cost cap on pipeline construction in order to shield the oil companies from run-away costs’.38 It was this political pressure that lay behind BP cutting the Turnkey Agreement with BOTAŞ, thereby ensuring that two-thirds of BTC could be built $600 million cheaper than expected. Furthermore, US diplomacy ensured that the cost overruns on the pipeline were carried not by the private oil companies, but by Turkish taxpayers. Morningstar insisted:

  The United States views its proper role with respect to Caspian pipelines as that of a facilitator. Enhancing commercial opportunities for US and other companies is one of our strategic objectives in the Caspian region. As a creature of the private sector for all but the past five and a half years, I clearly understand that pipelines will not be built if they don’t make commercial sense.39

  Ballinger stayed in Ankara as director of the Caspian Finance Center for six years, until January 2006, when the Center had ‘completed its work with the commissioning of BTC’.40 Between them, Morningstar and Ballinger helped establish the political and economic framework that enabled BTC to ‘make commercial sense’. They played key roles in guaranteeing both profits for the oil companies and continued US energy dominance.

  Morningstar became US ambassador to the European Union between 1999 and 2001. For the following eight years he was out of the limelight, but upon President Obama’s election he was made special envoy of the secretary of state for Eurasian energy. This meant he was back on the Caucasus and Central Asian energy beat, pushing hard for the entry of Western companies into Turkmenistan’s gas reserves and for the construction of the Nabucco pipeline to feed into the European grid. His labours combined with those of Jean-Arnold Vinois, at the European Commission’s Energy Directorate General, to build the ‘Southern Energy Corridor’. Like Sabit Bagirov in Baku – once head of SOCAR – and Byron Grote in London – BP’s chief financial officer, Morningstar could be called ‘an invisible father of the BTC pipeline’.

  In one of the cafés of Kızılay we meet with a group of Mehmet Ali’s friends. He is the joker of the pack, with his little round glasses and cheeky grin – obviously adored by his friends. They all attended Ankara’s elite Middle Eastern Technical University (METU) together. In a leafy campus on the edge of this cement-grey city, METU classes are conducted entirely in English, while students discuss Žižek, Habermas and Agamben on the lawns.

  Several of Mehmet Ali’s friends were employed to work on BTC as engineers, or on the accompanying Community Investment Programmes. The money was comparatively good, and employment on an international project was beneficial for their CVs. Chatting about how they were initially hired, it emerges that the oil companies decided to focus their recruitment here. Not just individuals, but whole departments were drawn into the project. The university’s Black Sea and Central Asia Centre was contracted by ERM in London to conduct the ‘Socio-economic Baseline Study’ for the Turkish section of BTC. This was one of the set of assessments of the pipeline route that we had seen were flawed at Hacıbayram. Through this process of hiring graduates and contracting departments, academic institutions like METU became part of BTC’s Carbon Web.

  A handful of METU recruits remain at BP today, based in the company’s Turkish head office in the Armada Tower – a blue-glass-and-granite skyscraper in the middle of Ankara to which we head for our next meeting. We bypass the first four floors of cinemas and a shopping mall – which recently won an award as ‘Europe’s Best Mall’ – and take the elevator to the offices above.

  We wait in the lobby beside TV monitors announcing that the oil tankers Thorm Valborg and Thorm Marina are currently docked at Ceyhan and loading up with oil from BTC. Hoping that this will be a more informative meeting than those in Baku and Tbilisi, we while away the time reading BP’s Horizon magazines. The pages are filled with a sense of corporate optimism that strangely echoes the strident positivism of Soviet literature, and is apparent in some of Hikmet’s poems. The features on the pipeline convey an engineering world where ‘progress’ is always good, every problem can be solved, and advance comes through technology. In all the words and photographs there is never a sense of loss, nor any expression of doubt.

  Our host arrives. Şükran Çağlayan is corporate social responsibility manager at BP Turkey. Charming – even flirtatious – she guides us up the spiral staircase to a suite of conference rooms on the mezzanine. Taking up a mere two floors, these are the smallest BP offices we have visited, reflecting BP’s overseer role in Turkey. While the pipeline operator BIL has around 1,200 employees, BP’s staff in the whole country numbers only 100 people.

  Şükran explains that she has worked for BP for ten years. She joined in 1999, ‘before the Host Government Agreements were even signed. In a way, we were lobbying for these at first. I was involved from the design phase to implementation, through construction to operation. From the Environmental and Social Impact Assessments to the Community Investment Programmes.’ Now, she explains, her job is to manage the socio-economic impacts of the pipeline.

  Born in the village of Posof in Ardahan Province – near where we had seen the pump station in the snow – Şükran’s family were Meshketi Turks from across the Georgian border. These are the peoples who were forcibly transported to Central Asia in 1944 by Stalin’s NKVD, and who struggled to return to newly independent post-Soviet Georgia in 1991 against opposition from President Gamsakhurdia. But Şükran was fortunate, growing up across the border in eastern Turkey. She tells us that the villagers along the pipeline from the border to Sivas call her ‘their local girl’, something about which she is clearly proud.

  Asked about managing expectations, Şükran is quick to say that this was always very difficult, and sometimes near-impossible. ‘These people have nothing – you can imagine why they have these expectations. These are remote villages that nobody visits, and suddenly there’s an influx of people promising change and development. And to the villagers, everybody was BOTAŞ – no distinction was drawn for BP.’

  She agrees with our understanding that there was a widespread perception of BTC as a state project, rather than one created by a private company. It is clear this made her job much easier. ‘We were always perceived as VIP guests wherever we went. Even when we explained that we were private sector, locals saw us as government representatives. The pipeline was perceived as a matter of honour for the country. This meant that communities thought of it as “their” pipeline. Thank god that they had this attitude all the time.’

  This is a very different kind of meeting from those with Aydin Gasimov in Villa Petrolea and Matthew Taylor in Tbilisi. Şükran is plainly sincere in her dedication to improving the lives of those along the BTC route, and about using the pipeline to promote rural development. ‘After our work, an oil corporation is seen as an agricultural development expert’, she declares.

  Şükran believes that corporate social responsibility should be focused on development, not on public relations. While this might appear an obvious point, the line between the two is often fuzzy. CSR officers are frequently trained in public relations and media management, in order to communicate brand and corporate values more effectively.41 Şükran’s take on this is forthright: ‘The first thing the world should do is get rid of all these PR people in communications and external affairs. They are the ones really creating the bad image.’ We wonder whether she is referring directly to Matthew Taylor and Tamam Bayatly in Baku.

  BP�
�s Community Investment Programmes in Azerbaijan and Georgia were run by large international NGOs like CARE International and Mercy Corps, as Irina and Aydin had described to us in Baku’s Villa Petrolea. Şükran, who is well read on development practice, takes pride in the fact that things were different in Turkey, where BP prioritised working with local companies and organisations. ‘It was a big risk in the beginning. We have spent so much money on capacity building. But it was needed. When we selected Erzurum University as a Community Investment Partner, they had no experience. Now they are trusted by the EU and donors’. We realise that Şükran must have had a part in hiring Mavi Hilal in Ardahan, and perhaps in the tie-up between British consultancy ERM and METU university.

  But not everybody was happy about this policy. ‘Did you know that Mercy Corps tried to sue us?’ She explains that Mercy Corps, based in Washington, wanted to run the Community Investment Programme in Turkey. The NGO claimed that BP was discriminating against them by insisting that they partner with a local organisation. Şükran continues: ‘I said, “Sorry, we have a policy on local partners, there’s nothing I can do about it.” Then they tried to take us to court’.

  She spells out her view that working with the right local bodies is crucial. ‘In big multinationals, people have the attitude that “I know the best for everybody”. We need to avoid this ethnocentric approach. The local people know best.’ Şükran is also strongly critical of what she calls ‘the oil men’ in BP. She blames them for decisions like allowing BOTAŞ to build the SCP gas pipeline from the Georgian border to Erzurum, and avoiding responsibility for the way it was constructed. ‘It’s a shame, isn’t it? It’s awful’, she says, describing the long mound of rocks and earth, like that which we had clambered over in Hacı Ali.