Poor working conditions at Western oil firms in Azerbaijan

A number of international oil firms are exploring the Caspian off shore fields, but working conditions and wages for local oil workers are often poor.

By Zaur Rasulzadeh

Posted on November 8th, 2009

Hiring and working conditions at the international oil companies in Azerbaijan do not comply with national legislation, nor international norms. There are huge differences between the wages paid to international employees and those meted out to local hires. Attempts to create independent trade unions in the sector are being hampered by the oil companies, and there are examples of workers, seeking to unionize, who have been fired.

It would seem to fly in the face of economic logic that the oil companies import workers that claim wages 6 to 10 times higher than those paid to local employees. Howevere, certain qualified workers from abroad can make 5-6000 dollars a month compared with 5-600 dollars paid to local workers performing the same tasks.

One reason for this is the way deals about oil exploration are structured, where so-called production sharing agreements give the oil firms an incentive to inflate costs.

It is also unclear whether the multinationals live up to their commitment that 95 per cent of workers should be locals within five years of a contract being signed.
Moreover there are serious clouds on the horizon: Currently there are some 15.000 people employed in Azerbaijani oil projects, but sources estimate that this could fall as low as 3.000 once initial construction has been finished.

This investigation was published by the newspaper Novoye Vremya on April 18th, 2009, to read the article on line, please click here, and to download it, please click here.