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BTC Pipeline: Azerbaijan


Once the oil reaches the Sangachal terminal south of Baku, it will begin its journey over land through the BTC pipeline to Ceyhan, Turkey. Baku, the capital of Azerbaijan, is also the headquarters of the State Oil Company of the Azerbaijan Republic (SOCAR). SOCAR is the largest employer in Azerbaijan, and it is also a 19 percent stakeholder in the BTC pipeline project. SOCAR is also perceived by many to be the largest corrupt organization in a country notorious for crooked dealings. SOCAR's most strident opponents view the company as a tool for lining the pockets of President Ilham Aliyev, his family, and his closest advisors with oil profits. Less severe critics have called for more financial transparency in SOCAR's apportioning of Azerbaijan's oil wealth.

Photo of oil derrick
This derrick reflects Azeri expansion of its oil ventures.
Though many feel that the wealth generated by tapping Azerbaijan's oil for Western markets will directly benefit the people of Azerbaijan, some economists are concerned that the nation may suffer from a syndrome known as "Dutch disease." Dutch disease occurs when a large influx of wealth, especially from natural resource exploitation, negatively impacts other aspects of a nation's economy. In this scenario, a sudden rise in the value of the Azeri manat spurred by new oil revenue would undercut non-oil export products and serve to increase the nation's dependence on oil profits. Socially, such trends could actually undermine the livelihoods of the majority of Azeris who are employed in agriculture and encourage the state to institute stricter controls to maintain civil society and retain a firm grip on its oil industry.

Go to Azerbaijan: Politics
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