BP-Georgia General Director – Mr. Neil Dunn
The oil industry is a disruptive enterprise; no one argues this, socially and environmentally but also economically. The real concern is how companies involved in such activities minimize the negative impacts of the former while maximizing the latter. One of the great benefits we are afforded at the American Times is first hand encounters with those directly involved with the remediation of those impacts. Our conversations with Mr. Neil Dunn, General Director and Mr. Gia Gvaladze, Communications & External Affairs Manager of BP-Georgia led us to one conclusive notion; these guys actually do care about what they do and how it affects the local atmosphere, the very reason they have earned a spot in our report.
It’s always a prudent decision to offer some context around a company’s operations in a country. BP-Georgia is involved in the transit of oil and gas reserves, from resource rich Azerbaijan who derives those resources from the Caspian Sea to the East, and not the exploration itself. Their operations exemplify our macro findings; Georgia is indeed a hub for business activities. With a Black Sea coast as well as strong relations with their large Turkish neighbor to the south, Georgia is an ideal transit corridor for goods within the region with an ease of access to ports that is second to none.
Without access to these ports BP would not be able to facilitate the operation of its 3 lines:
- BTC, Baku (Azeri port)-Tbilisi-Ceyhan (Turkish Mediterranean port) Oil Pipeline at 1,768 km which acts as the primary sales route from the landlocked Caspian Sea reserves to the European market via the Ceyan, Turkey Mediterranean port ;
- Baku-Supsa Oil Pipeline (Georgian Black Sea port) at 833 km and;
- SCP, South Caucasus Gas Pipeline via Baku-Tbilisi-Erzurum (Turkey) at 693 km.
“The SCP gas line represents a significant benefit to the Georgian people. There is a new $2 billion USD expansion effort in collaboration with SOCAR (Azeri energy) and the Turkish government to triple capacity and extend the current gas line to port with European markets as the intended destination. This project will employ approximately 2,000 temporary locally sourced workers and up to 125 longer term positions”, said Mr. Dunn. He goes on to further state that, “in addition to employment the expansion will contribute economically, over $400 million USD, to local Georgian suppliers, including the transportation of 350,000 metric tons of gas through Georgian ports and railways. All of which amounts to the single largest FDI influx in Georgian history.”
An American expat hailing from Detroit and University of Chicago educated, Mr. Dunn has filled the role of General Director for the past 4 years. The underlying theme of our discussion focused on the human capital availability in the country. As any investor can attest to, access to a highly educated and trainable workforce is of critical importance upon making an entry decision into an emerging market; which is why it was comforting to see Mr. Dunn and his team cementing their commitment too and taking full advantage of, the local talent pool.
Frankly speaking, we were shocked to see the level of dedication to human development exemplified by the long lead time built into developing the necessary proficiencies required of technicians for the expansion project of the SCP gas line. Currently 5 years before production capacities are reached, BP has already begun hiring for key positions starting with a 6 month English language training program and developing the safety culture that permeates all activities at the oil company.
Expounding further on human capital, Mr. Gia Gvaladze, a Georgian himself, proudly boasts that, “97 percent of the 400+ full-time staff employed by BP-Georgia are Georgian citizens and growing!” In addition to directly assisting in suppressing unemployment, naturally a key objective of the new government, Mr. Gvaladze also recognizes that assisting and promoting the development of the rural peoples located near the company’s activities is of great importance, stating, “We have developed a Community Development Initiative (CDI) for the 7,200 landowners, those within a 2 km radius of laid pipeline, where we help them develop business plans directed at sustainable activities, largely in the agriculture sphere”
The key impression revealed by British Petroleum’s CDI isn’t that it’s a payoff to rural sustenance farmers, rather a ‘teach them to fish and feed them for life’ approach. The beauty of the Initiative isn’t the financial resources allocated to the work but rather the long-term and cooperative approach. When a company their size enters an emerging market where there lacks clear governance or legislation for critical activities needed to carry out ones work they have to ability, if not the responsibility, to set the highest standards and trends that become the barometer for like future endeavors in the market for years to come.
One notable example, aside from corporate social agendas like the CDI, was during the placement of the very first pipeline in the 1990’s that required land procurement. As recalled by the General Director, “There was unclear land ownership documentation and cadastral maps. It took considerable effort to work with all parties, including Government to develop a proper process which resulted in accurate public registrations allowing us to deal fairly with the rightful land owners”
As far as one can see the company does not lack dedication to their host countries development. With past and future long-term engagement initiatives in Georgia, BP acts not only as a catalyst for growth which contributes directly to economic stability but they also act as a hi-tech knowledge depot. This transfer of western management, training and corporate responsibility knowledge is truly priceless. The local employees and suppliers that engage with the company come out with more than a few bucks in their pocket. They leave with the mentality and skill set required to compete on a global level well beyond their homeland of Georgia.
For more information on BP- Georgia’s work and Community Development Initiatives please visit: www.bpgeorgia.ge under “Reports and Publications” or view the 2012 CDI report at www.the-american-times.com/resources.