YEN Azerbaijan

This weekend I had the chance to leave Baku for the first time and visit the Absheron Peninsula – a large piece of land jutting out into the Caspian Sea. The vast majority of oil development takes place in a 100km radius from Baku, meaning that the city and adjoining peninsula is heavy developed with both onshore and offshore oil wells.

Oil revenues have been key in the development of the Azeri economy during the 1920s and again today. That said, the development has come with a high price. Oil wells dot the landscape in and around Baku and pollution and environmental mismanagement are evident. Small, underdeveloped villages sit next to massive oil fields, with open gas flaring and open pit extraction.




As a result of the large-scale offshore oil development, it is very common to find oil washed onto local beaches. With no clean-up system, most of the oil simply collects and poisons local plants and animals.

With such positive news coverage regarding oil development and economic investment (and the accompanying spin-offs, including increased employment and job training) it is easy to forget that development has a cost – and in this case it will environmental. Without proper asset management and reinvestment, revenue from oil development will be relatively small in comparison to the costs of rehabilitation.