Georgian Villagers Haggle with Oil Giant

Around 100 people, mostly men, gathered early one morning last month in the sports hall of the local school in the village of Nazarlo near the border with Azerbaijan.

They heard out the representatives from the oil company BP in almost total silence then noisily vented their complaints and concerns.

The meeting was one of many taking place during a two-week social and environmental assessment project carried out by the petroleum giant in the Gardabani region, south of Tbilisi. The consultation process is one of the preconditions for work to begin on two ambitious international pipelines linking the Caspian and Black Seas.

The Baku-Tbilisi-Ceyhan pipeline, which will cost more than two billion dollars to build, is intended as the main export route for Caspian Sea oil to western markets. Construction is due to begin early next year and the first oil will flow through it at the end of 2004 or the beginning of 2005. A gas pipeline from Baku to the Turkish city of Erzerum, running parallel to the oil carrier, should be completed in 2005.

As the construction start-date nears, BP, the biggest investor in the project, has been canvassing the views of people living close to the pipelines in Azerbaijan, Georgia and Turkey. It is not an easy process and the company is finding that the villagers are canny negotiators.

The Georgian government has acclaimed the Baku-Ceyhan project as the “project of the century” which will strengthen the country’s independence and help its integration into the West.

But many ordinary Georgians, giving their views to BP and in opinion polls, are cynical, expressing the view that the main aim of the project is to raise the political stock of the Tbilisi authorities both at home and abroad.

Zurab Shurga, the official in charge of monitoring the project with the Georgian International Oil Corporation, GIOC, begs to differ. “Of course there is a serious political factor in the projects, but the economic component is still the main one,” he said.

Shurgaya pointed out that every year up to 50 million tons of crude oil (equivalent to one million barrels a day) and 7.3 billion cubic metres of gas will be shipped down the pipelines, giving Georgia substantial new revenues.

However, the main topic in the dialogue between BP and the inhabitants of some of the 72 villages on the route was their own social problems.

“For ten years the government has had no time for us, they remember us only when they themselves find it essential,” said one villager Merab Jangirashvili. “Maybe these projects are important for the country, but if we don’t receive anything from the companies who are building these pipelines, then we can’t expect anything from the government.”

Valery Avaliani, a local official from the village of Lemshveniera went further. At a meeting with the BP representatives, he said that his villagers would not allow construction to go ahead, if they did not receive anything in return. “Until BP – or whoever it is – repairs the kindergarten or puts in a pumping plant or fixes the roads, we won’t let them do anything, “ he said.

Rusudan Medzmariashvili of the oil company’s public affairs office responded to this by saying that it was already beginning to work on social projects and so the villagers’ problems would be solved.

The villagers have a long list of points they are haggling over. For instance, they are interested in getting a share of the energy passing down the pipelines. They were told, however, that the oil is for export only, while some gas could be diverted to them.

They also take a keen interest in what compensation they will receive for land taken up by the pipelines and how many construction jobs they will create in a region of high unemployment.

“Most locals, including people with higher education, don’t have jobs,” complained one man named Ashot Azimov. “Young people go to Tbilisi, graduate from institutes and then sit at home without any work.”

BP official Libby Hirshon said 2,500 people would be employed in constructing the pipeline. Some of them would be overseas professionals, but most would be Georgians, with many coming from villages near the pipelines.

Zurab Shurga of GIOC said that a number of firms had started compiling lists of locals wishing to take part in the construction work but that the last word lay with the contractor, BP.

As for compensation for land use, the oil giant said that any owners of the 44-metre-wide corridor through which the pipelines will pass are to be given reimbursement contracts to sign.

But that is not yet enough for some locals. “Who will be responsible if an accident happens, who will compensate us for the damage?” asked Naira Jangirashvili, an official in the village of Lelaashkha. “They may simply forget about the local residents if that happens.”

The villagers are therefore asking for the land compensation document to contain a clause about compensation in case of an accident.

Neither the Georgian government nor BP have yet outlined publicly how they plan to guarantee the safety of this important project, although a military training exercise is currently simulating how to protect the pipeline and the territory around it and to supply humanitarian aid to the population.

It is the third such operation along the pipeline route. “If there are unforeseen situations in Georgia, there will be at least 60 officers, capable of acting in these circumstances,” said Irakli Batkuashvili, who runs NATO’s Partnership for Peace programme for the Georgian general staff.

BP will finish drafting its final social and environmental assessment this month and give it to the Georgian government at the end of August. It will then be handed to villagers along the pipeline route.

Giorgy Kupatadze is a correspondent with Black Sea Press in Tbilisi