A new 'neighborhood watch': Azeri horsemen guard BP pipeline

Six days a week, Seymur Alizadeh and his chestnut-brown mare patrol the Azerbaijani countryside. Buried a few feet below is the prized Baku-Tbilisi-Ceyhan (BTC) oil pipeline, which delivers nearly 1 million barrels of Caspian Sea crude to Western markets each day.

Mr. Alizadeh, one of many local villagers guarding the oil route, says, "I feel like a very important part in protecting this pipeline." Hiring local horsemen is part of a larger effort by pipeline builder BP to create a massive neighborhood watch.

BP and other energy companies are under scrutiny for their relations with local communities worldwide for the cost, disruption, and even bloodshed their lucrative pipelines are responsible for. So in recent years they've honed a new formula: invest heavily in the affected communities and try to foster goodwill, neutralize controversy, and hopefully safeguard their multibillion-dollar investments.

"They have the spotlight on them to do something good in the societies in which they operate, and with the Internet communication revolution, you can very easily publicize something about them from any corner of the globe if they do not behave appropriately," says Lars Gulbrandsen, a Norwegian researcher who has studied corporate social responsibility (CSR) in Azerbaijan and elsewhere.

Shell in Nigeria boasts its student scholarships and HIV/AIDS awareness programs. ExxonMobil describes its vocational training for women in Indonesia, drug-prevention programs in Chile, and prenatal healthcare programs in Kazakhstan. Chevron says it provides food relief and agricultural development in Angola and "learning centers" in Venezuela and South Africa.

In Azerbaijan, what remains to be seen is whether BP's efforts are enough to overcome simmering resentment at corrupt government officials who siphon off oil money.

BP says that the 1,100-mile BTC pipeline – which links the Caspian with the Mediterranean and is the second-longest oil pipeline in the world – includes the greatest community impact of any BP project to date.

By the end of 2008, BP says it will have spent close to $100 million in Azerbaijan, Georgia, and Turkey to build water-purification systems, medical clinics, primary schools, parks, and roads in the 450 communities identified as directly affected by the pipeline.

This expense, however, may be a drop in the barrel compared with the billions of dollars of revenue from Caspian crude. (Although BP won't reveal its profits in Azerbaijan, the government's share of its revenue last year was $4.7 billion.)

Still, some of the 125 Azeri communities, mostly impoverished and often neglected by their own governments, say that BP's efforts are the best they've seen. The company and several smaller oil partners work with nongovernmental organizations on community-development efforts that the government has yet to begin.

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