BP projects have helped fund Azerbaijan military aggression, say campaigners

BP’s fossil fuel projects in Azerbaijan have helped fund the military aggression against Karabakh Armenians though the transfer to billions of dollars to the Azerbaijan government since 2020, a campaign group has claimed.

Global Witness said Azerbaijan’s share of two large oil and gas projects operated by the British oil company had earned its government more than four times its military spending since 2020, the year that war broke out in the disputed territory of Nagorno-Karabakh.

Analysis by the NGO suggested that Azerbaijan’s economic reliance on BP, its largest foreign investor, had indirectly helped to fund Azerbaijan’s military aggression against ethnic Armenians in the contested region, which has forced more than 100,000 people to flee the territory since early September.

In the same month senior figures representing BP, including its chair, Helge Lund, and former chief executive John Browne, visited Baku to attend the 100th birthday celebrations of Azerbaijan’s late former president Heydar Aliyev and reiterate its commitment “to long-term partnership with Azerbaijan”, according to a company statement.

BP has supplied Baku with oil and gas worth almost $35bn (£28.6bn) since 2020 under a “production-sharing agreement”.

Aliyev’s son, Ilham Aliyev, became president after his father’s death in 2003 after an election that observers from the Organisation for Security and Cooperation in Europe claim fell short of international standards.

Dominic Eagleton, senior campaigner at Global Witness, said: “BP’s longstanding partnership with the Aliyev ‘dictatorship’ has funded Azerbaijan’s militarisation and aggression against Armenia. BP has been happy to keep drilling, having learned nothing from the historic mistake it made in Russia.”

BP abandoned a stake of almost 20% in the Russian oil company Rosneft, at a cost of $24bn to the company, following the Kremlin’s invasion of Ukraine after the UK government expressed concerns over BP’s links to the company given its role in providing fuel for Russia’s military effort.

“Funding violent dictators is always a bad strategy,” Eagleton said.

BP last week posted weaker than expected profits of $3.3bn for the third quarter, compared with $8.2bn in the same months last year, prompting speculation that its sluggish share price and boardroom upheaval could make it a takeover target.

A spokesperson for BP said the company has “been present in Azerbaijan for three decades and we remain committed to operating a safe, reliable, and resilient energy business in the region”.

Under an agreement struck between BP and the Azerbaijan government in the 1990s, the oil company is required to hand a share of the fossil fuels it produces from these projects to the state.

This type of arrangement is commonplace in the oil and gas industry as a way to share the risk and reward of developing fossil fuel projects between foreign companies and the host state.

BP holds the largest share of Azerbaijan’s oil and gas projects alongside other foreign oil companies, including the US firm Exxon Mobil, Norway’s Equinor and the Russian company Lukoil, which hold small minority stakes in the projects.

BP’s financial disclosures show it has supplied Baku with oil and gas worth almost $35bn on the global market since 2020. This sum is more than four times the government’s military spending over the same period, which reached $7.9bn, according to the Stockholm International Peace Research Institute.

“We support a peaceful settlement to the conflict and hope that a final resolution will soon be found,” the BP spokesperson added. Browne did not respond to requests for comment.

Armenia’s prime minister, Nikol Pashinyan, has alleged the ethnic Armenian exodus amounted to “a direct act of an ethnic cleansing and depriving people of their motherland”. The claim was strongly rejected by Azerbaijan’s foreign ministry, which said that the mass migration by the region’s residents was a “personal and individual decision and has nothing to do with forced relocation”.

https://www.theguardian.com/business/2023/nov/08/bp-projects-have-helped-fund-azerbaijan-military-aggession-say-campaigners