Prized by Hitler, Azerbaijan is back in oil and gas boom

Energy resources, a wealth creator for the Nobels and Rothchilds, are fuelling construction

Energy resources, a wealth creator for the Nobels and Rothchilds, are fuelling construction

SO HUNGRY was Adolf Hitler for control of the Caspian, that in 1942 his staff gave him an elaborate cake with the shape of the sea in the middle.

Archive film shows the Führer’s delight as chocolate sauce from the dark sea is spooned over the confection, a sweet reminder of the Caspian’s abundant oil, and an aide cuts him a slice.

Before Hitler can devour it, the camera zooms in on the name, in icing, of the city of his dreams: Baku.

When Hitler gobbled up the city, in cake form at least, it was producing 80 per cent of the Soviet Union’s oil and fuelling the Red Army’s resistance to the forces of the Third Reich.

Operation Barbarossa had been halted outside Moscow in late 1941, and Soviet counter-attacks and brutal cold made the German army suffer through the winter.

The spring and summer of 1942 would be crucial and Hitler had bold plans to march over the Caucasus and seize the Caspian. Then Germany would drink freely of the energy that the Soviets were now using against it.

“Unless we get the Baku oil,” Hitler said at the time, “the war is lost.” They didn’t, and it was.

In the crucial battles that changed the course of the war, at Stalingrad and Kursk in 1942- 1943, fuel shortages hamstrung the Germans while the resurgent Red Army guzzled Baku’s black gold.

The city may have been crucial to Hitler’s plan for European domination but, by the 1940s, its heyday as an oil boomtown was already fading into memory.

The Nobel brothers had realised the potential of Baku’s oil when searching the southern reaches of the Russian empire for suitable wood to make guns for the tsar.

In 1876, they established an oil firm called Branobel – from Brothers Nobel in Russian – and used their capital and engineering brilliance to revolutionise oil transportation, so that by 1900 Baku was producing half of all the world’s oil.

Baku already had a reputation for innovation when the Nobels arrived, having launched the world’s first mechanical drilling rig in 1846 and benefited from the work of the great Russian chemist and inventor Dmitri Mendeleev when he visited in the 1860s.

But the Nobels were the first to store oil in iron reservoirs and to move it by pipeline and rail-wagon and tanker ship.

They named the world’s first tanker Zoroaster and the emblem of their company was a fire-worshippers’ temple that still stands outside Baku.

It was founded in the 17th century on the Absheron peninsula, at a place where gas seeping from the earth ignited into flame.

The fire went out and the temple was abandoned in the 1880s as increasing oil extraction reduced gas pressure underground, but thousands of “nodding donkeys” continue to haul riches from the desolate Absheron, falling and rising relentlessly on the marshy flatlands.

In some places, ranks of these skeletal rigs march out towards the horizon, in others they rumble away right next to dilapidated houses that are little more than slums; children play in their shadow and washing hangs on lines strung beside them, drying in a breeze that tastes of salt and oil.

The oil industry made huge amounts of money for the Nobels and other foreign entrepreneurs like the Rothschilds and created several Russian and local Azeri magnates. Between them, they transformed parts of Baku from a dusty Asian backwater into a pastiche of Paris, while Alfred Nobel’s shares in Branobel helped found the prizes that bear the family name.

The mansion built by the Rothschilds is now Azerbaijan’s national art gallery, while the Nobels’ Villa Petrolea sits amid manicured gardens on the edge of the Black City, an area of central Baku that was, before recent redevelopment, a wasteland of oily pools and rusty machinery.

Josef Stalin, from neighbouring Georgia, found revolutionary potential among the wretched oil workers of Azerbaijan and his cohorts are believed to have kidnapped tycoons for ransom. His first wife died of typhus here in 1907, a blow that he said hardened him forever against humanity.

In recent years, new oil and gas fields and major international investment have sparked another boom in Azerbaijan; the elegant houses of the oil barons and Baku’s Soviet-era architecture are now reflected in the soaring glass facades of striking modern buildings.

Leading architects like Zaha Hadid have been hired to give Baku a series of iconic new buildings and districts, including a shimmering “White City” of shopping malls, apartment blocks and offices to stand on the site of the benighted Black City of old.

But what of the vast majority of Azerbaijan’s nine million people who are not clogging Baku’s streets with the latest Mercedes or shopping at the designer stores along the seafront Oil-workers’ Avenue?

The world’s leading rights and civil society groups agree that Azerbaijan is a hugely corrupt country where rigged elections are the norm and where the regime of President Ilham Aliyev exerts a stranglehold on the media and political opposition.

Western powers go easy on Aliyev, activists say, because Azerbaijan is crucial to their energy security and to reduce their reliance on Russian oil and gas.

Azeri officials are sensitive to criticism, especially ahead of next month’s Eurovision song contest in Baku, which they hope will show the world a modern, dynamic city at the crossroads of Europe and Asia, rather than invite scrutiny of the country’s poor rights record and vast inequality.

Socar, the State Oil Company of Azerbaijan, is for many a symbol of the country – to some a driving force for development, to others an opaque and corrupt money machine for the elite.

“There is a striking difference between Baku and the villages around, but if you had seen Baku in 1992, you would have seen a centre that was the same as the villages that development has not yet reached,” said Elshad Nassirov, Socar’s urbane vice- president for marketing and investment.

“Can you name me another oil company that is doing even half of the social programmes that Socar is doing?” he asked in his airy office beside the Caspian.

“Is BP constructing schools in the UK or Total doing something for France other that paying profit tax? Socar pays taxes and builds schools, hospitals, roads and sponsors just about everything in this country.

“The regions are also developing now. The government is working on this and Socar is supporting the government on this,” Nassirov insisted.

“But it takes time. You cannot make the whole country prosperous, shining and covered in marble just like that.”