Monday, July 16, 2012

Is BP writing Europe's energy policies?

This month marks the twelfth anniversary of what was perhaps the most deceptive rebranding exercise of all time: BP christening itself Beyond Petroleum. Though it might have fooled a few, the exercise eventually collapsed. The disaster in the Gulf of Mexico illustrated that you can’t conceal ecological devastation with a pretty logo.

One thing that remains concealed, though, is the full extent of the relationship between BP and the European Commission.

At the end of June a consortium led by BP and Statoil announced it had chosen the Nabucco West pipeline – running from the Turkish-Bulgarian border to Vienna - as one of two possible routes for bringing gas from Azerbaijan to Central Europe. Günther Oettinger, the EU’s energy commissioner, swiftly welcomed the decision, hailing it as a “success for our security of supply”.

Oettinger’s statement made no mention of the fact that BP is leading the Shah Deniz consortium (as the group behind this project is called). Instead, he referred to how Nabucco West had been chosen over a rival project, which was owned by BP. A layperson could be forgiven, then, for thinking that BP had lost out.

As Oettinger works for an institution which claims to be transparent, the least we should expect is that details of all contacts between his office and BP should be published. Yet when I searched his website, I could find no information on any contacts he had with BP this year.

Only by trawling through some newsletters written with policy wonks in mind did I learn that Oettinger’s chief of staff, Michael Köhler, attended a conference organised by BP in Berlin during May. Köhler was praised as “eloquent” by the European Centre for Energy and Resource Security (EUCERS), which published a short report of the event proving that he took part in a discussion about the Nabucco West pipeline. Comments by BP representative Iain Conn indicated that the message delivered by the corporation chimed with those of the European Commission. Conn stressed the “strategic importance of Azerbaijan for a diverse and competitive European energy supply.”

Envelopes of cash

Vultures’ Picnic the latest book by the investigative reporter Greg Palast, hints that BP has thought deeply about the “strategic importance” of Azerbaijan.

In the early 1990s – not long after it had obtained independence from the Soviet Union – the Azeris elected a new president Abdülfez Elchibey. Within a year of awarding a lucrative oil contract to Amoco, then a competitor of BP, Elchibey was deposed in a coup supported by Britain. His successor Heydar Aliyev did not make the same mistake: four months after the coup he gave BP the “contract of the century” (Aliyev’s words) without subjecting it to any tedious bidding process.

Palast interviewed Leslie Abrahams, a BP agent who admitted that he handed over “envelopes of cash” – about “two or three million pounds” in total - to Azeri officials to clinch the deal. (This was in addition to a £30 million cheque for Aliyev). When Margaret Thatcher visited Baku, the Azeri capital, in 1992, Abrahams was her drinking buddy.

Azerbaijan has a deplorable human rights record. Mehman Huseynov was arrested last month on spurious hooliganism charges. He campaigned for democratic reforms when the country hosted the Eurovision Song Contest. The treatment of this young activist is part of a more general pattern. A series of protests in Baku last year were repressed.

Have you heard BP, a key investor in the country, denouncing the Azeri regime for crushing dissent?

Or have you heard BP executives register their disquiet with the incarceration and sadistic treatment of Bradley Manning by the US authorities?


Among the documents that Manning is said to have released was a diplomatic cable stating that BP had covered up a gas leak in Azerbaijan in 2008. Another cable published by WikiLeaks observed that BP blamed the incident – which involved the largest evacuation of workers in the firm’s history – on a “bad cement job”. This explanation was eerily similar to the one given by Tony Hayward, BP’s chief executive at the time, for the cause of the Deepwater Horizon catastrophe.

Allegations of bribery in Azerbaijan continue to dog BP. Earlier this month The Daily Telegraph reported that BP has been under investigation from the British Serious Fraud Office over claims of improper payments relating to engineering projects being undertaken by one of its contractors in Azerbaijan.

The probe is not yet conclusive. But is it right for the European Commission to deepen its cooperation with BP at a time the firm’s activities are being investigated for fraud?

The subtext of Oettinger’s enthusiasm for importing Azeri oil is that the EU needs to reduce its dependence on Russia as a source of energy.

His diagnosis of the underlying problem is correct: Russia’s unreliability was demonstrated during its gas dispute with Ukraine in early 2009, which disrupted energy supplies to some EU countries. But Oettinger’s prescription for dealing with the problem is flawed.

The EU has great potential to be self-sufficient in energy. Two years ago Oettinger launched a study by the European Renewable Energy Council, which contained a blueprint for how the Union could generate 92% of its energy needs from renewable sources by 2050.

The study underlined that reaching that target requires action to be taken now. BP has a vested interested in distracting the EU from this urgent task. Letting it write Europe’s energy policies is a recipe for yet another disaster.

●First published by New Europe, 15-21 July 2012.

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