Former Soviet Union
Since the early 1990s, BP and Shell have made significant inroads into oil and gas production in the Former Soviet Union (FSU). With many fields already located by Russian companies, the region's vast reserves offer a bonanza for oil majors desperate to replace their declining reserves. The primary targets are the oil beneath the Caspian Sea and at the edges of the Russian Arctic.
Cash-strapped and almost bankrupt, the newly independent FSU republics were forced to offer the oil companies extremely lucrative contracts. Yet while the oil companies profits are guaranteed for decades, local populations and the environment suffer.
State revenues are diverted to militarisation and propping up repressive regimes. Additional employment from oil development tends to be short-term and oriented towards imported labour, causing social disruption without increasing economic security. Failures to meet environmental standards risk pollution and oil spills - threatening vital natural resources including water and fish stocks.
Oil producing regions of the Former Soviet Union have seen economic growth. However, this 'growth' is a red herring disguising growing inequality and a failure to improve the standard of living for most citizens. With the enormous inflows of investment confined to the oil sector and average prices rising rapidly, non-oil sectors of the economy are undermined and lose their viability.
PLATFORM's work on the Former Soviet Union focuses on investigating and challenging the impacts of two oil projects. BP's Baku-Tbilisi-Ceyhan pipeline flows through Azerbaijan, Georgia and Turkey, pumping oil from the Caspian to the Mediterranean, from where it is shipped on to Europe. Shell's Sakhalin II integrated liquefied natural gas (LNG) and oil project is off the far eastern coast of Russia, at the edge of the Arctic. Sakhalin LNG will be shipped to the US, Japan and probably China.