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Oil money divides a village

Marketplace Staff Oct 19, 2006

KAI RYSSDAL: Alaska’s Prudhoe Bay is back up to capacity. BP says it’s pumping 400,000 barrels of crude a day through its infamously corroded pipeline. The same one that cut production from America’s biggest oilfield in half a couple of months ago.

The U.S. has a new oil option. Nowhere near Alaska. BP recently opened the spigots on a pipeline that starts in the former Soviet republic of Azerbaijan. The U.S.-backed project completely bypasses both Russia and the Middle East to deliver oil to ports on the Mediterranean Sea. The pipeline and the oil are a windfall for the people of Azerbajian. Or, as Kelly McEvers reports, they could be.

KELLY MCEVERS: Tthe pipeline is as big around as a large man’s waist. It originates here, at a sprawling energy terminal run by British oil giant BP.

MANAGER: This is where the pipeline goes underground, on its way.

MCEVERS: Really warm.

Hundreds of miles later the pipeline dissects a field in the tiny farming village of Boyuk Kasik.

VILLAGER 1 [translator]: This is the first sign. This the line which shows where this pipeline goes. This is the first line you see.

More than a hundred families here were displaced from their land when the pipeline was built. In return, BP paid them $640,000 in compensation.

That’s a lot of money anywhere. Here it seemed like a miracle. We asked a group of men gathered in the center of town to tell us who got what.

VILLAGER 2 [translator]: He says that some people got 10,000, some people got 20,000, some people even 30,000.

MCEVERS: U.S. dollars?

VILLAGER 2: Dollar.

TRANSLATOR: Yeah, these U.S. dollars.

MCEVERS: Has the town changed? Have people changed since this money came?

VILLAGER 2 [translator]: In some way I can say that classes are created here. I mean, some people live very well, but some people live very poorly. I mean, they are poor.

VILLAGER 2 [translator]: And he says that before the life in this village was not complicated. I mean, it was easy because everyone had the same problems, financial difficulties. But right now people in some way are divided. They live rich, but I look at this person and I say that I am still poor but he is rich.”

People who didn’t get the money say they feel more poor than before. People who did get the money say they might not be that much better off either.

This family of six lived in a one-room shack at the edge of their field of livestock grain and straw they sold for broom bristles. Part of the field was destroyed by the pipeline. Compensation followed.

First the family threw a traditional party to thank Allah for the money. Then, says wife and mother Jabahir Mehmehdova, they built a new two-story brick house.

JABAHIR MEHMEHDOVA [translator]: She says that we got 14,000 U.S. dollars. And we spent all this money for the house.

MCEVERS: So the whole compensation they spent on the house.


MEHMEHDOVA [translator]: The house was the most necessary thing for us. And now we don’t think that we regret that we built the house. We of course worked a lot to complete this house. But you see that we can’t do this because how much income we got, it’s not possible for us to complete this house. And we wish to get another compensation to complete it.

Jabahir shows us what still needs to be done in the house: Unfinished floors, open doorways.

“If only we could get more compensation,” she keeps repeating, “then things would be OK.”

In all, BP paid more than $135 million to tens of thousands of landowners across three countries. A group of filmmakers based in Azerbaijan’s capitol, Baku, grew concerned with how villagers were squandering their money.

They made this documentary using Boyuk Kasik as an example for the entire country.

Director Beyukaga Mammedov says he worries that Azerbaijan’s notoriously corrupt government will do the same as the village, but on a much larger scale. In the next 20 years Azerbaijan stands to earn nearly $200 billion in oil revenue.

BEYUKAGA MAMMEDOV [translator]: We want people to understand that this money belongs to them. If the government squanders it, the people are the losers. Here people don’t understand that this is actually their money. They think, “Oh, it doesn’t belong to me. It has nothing to do with me.”

Mammedov says people should be involved in monitoring how the government spends this money.

In Baku, Azerbaijan, I’m Kelly McEvers for Marketplace.

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