StatoilHydro entered Azerbaijan in 1992, since when the country has been one of our largest foreign commitments. We are now the country's second largest foreign investor after BP, our main international partner in the country.

We are involved in three major projects: Shah Deniz, Azeri-Chirag-Guneshli and Alov-Araz-Sharg. In addition, we are a partner in the two most important pipelines exporting oil and natural gas from Azerbaijan - the Baku-Tbilisi-Ceyhan (BTC) and South Caucasus pipelines (SCP). These pipelines run in parallel throughout the region, from Baku in Azerbaijan through Tbilisi in Georgia to Turkey, where the BTC pipeline ends in Ceyhan on the Mediterranean coast.

A precondition for long-term success in the country and the broader region is a consistent commitment to share value creation and benefits with the whole region in a balanced and inclusive manner, an approach which is fully compatible with StatoilHydro's value system and corporate policy for social responsibility.

Together with our partners, we have therefore adopted a long-term perspective in support of our operations and a stable operating environment. The core of this support is the Regional Sustainable Development (RSD) programme, operated by BP on behalf of the partners. The RSD primarily includes the Regional Development Initiative (RDI) and the Community Investment Programme (CIP).

We also take a long-term view in our own social investments in society, by focusing on improving the overall business environment, promoting transparency, working on human rights issues and seeking to strengthen environmental awareness and capacity. 

The Regional Development Initiative (RDI) and Community Investment Programme (CIP)

The partnership's annual commitment of USD 11,314,000 in 2008 was channeled through the Regional Development Initiative (RDI) programme and the Community Investment Programme (CIP).

The RDI is a long-term commitment by the partners to increase the development impact of our core business and ensure that the proceeds from these activities are fairly distributed in the region. The RDI continues to address basic development challenges such as enterprise development, effective governance and access to energy. The initiative also has an underlying focus on education, capacity building and vocational training. 

To increase RDI benefits, the partners have established close collaboration with development agencies as well as with the governments and communities involved, including the International Finance Corporation (IFC), European Bank for Reconstruction and Development (EBRD), Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) and the UN Development Programme (UNDP). 

In 2008, particular attention was devoted to supporting the efforts of the Azerbaijani government to improve the business environment for entrepreneurs and ensure sustainable and diversified economic growth through the Business Enabling Environment project. Support also continued for the Enterprise Development and Training Programme to increase the share of local content in the partnership's oil and gas project; a business and economic centre for the parliament of Georgia, and a corporate governance project in Georgia.

Community Investment Programme (CIP)

The aim of the CIP is to manage impacts and stakeholder involvement in the communities along the BTC/SCP pipeline routes in Azerbaijan, Georgia and Turkey, to generate economic benefits and opportunities for an enhanced quality of life for those most directly affected by our business.

In cooperation with local and international non-governmental organisations (NGOs), investments have focused on income generation, strengthening rural and agricultural systems, enhancing community institutional capacity, improving access to education and training, health and sanitation and rehabilitating social and economic infrastructure.

In 2008, the partnership:

• supported enterprise development and economic skills-enhancement by providing access to high-quality training classes and vocational training in the Baku area
• in cooperation with Finca Azerbaijan, provided capital for loan and micro-credit packages and services tailored to meet the differing needs of urban, peri-urban and rural consumers in the Baku corridor, and, with Save the Children on the CIP West III programme, helped to equip targeted communities
• supported Basic Computer Literacy (BCL) courses for about 4700 teachers, students and community members in 12 communities in rural Azerbaijan
• contributed to a New Farmers to Markets project, implemented by CARE International in Georgia
• financed potable water systems repairs and upgrades in 18 communities in Georgia, which benefited more than 14,000 people

Additional investments

In addition to the projects pursued in Azerbaijan with our partners, we continue to demonstrate social responsibility through our investments in environmental awareness and capacity building, improving the overall business environment, promoting transparency and by working on human rights issues. In 2008, important elements of this strategy include:

Environment

• As Azerbaijan's national oil company, Socar, established a new Environment Department, we shared our experience and expertise with them through a series of seminars for Socar and other Azerbaijani specialists in the environment field, focusing on environmental monitoring systems, waste management, environmental technology and programme implementation.
• We also support a river monitoring programme led by the OSCE to detect and mitigate water pollution.

Transparency:

• To further transparency, we continue to comply with and support Azerbaijan's ambition to become the first EITI candidate country to be successfully validated in 2009. Azerbaijan was the first country in the world to adopt the principles of the Extractive Industries Transparency Initiative (EITI).
• In cooperation with the Eurasia Foundation, we helped ensure targeted training to improve transparency in the delivery of municipal services in Azerbaijan
• We are supporting a two-year programme to introduce, promote and raise awareness of the UN Global Compact principles in Azerbaijan. The programme also aims to contribute to building partnerships between various stakeholders, foster dialogue with the private sector and improve the business environment in the country.

Human rights.

• Both Azerbaijan and Georgia have significant communities of internally displaced persons (IDPs), refugees and returnees following disputes in Nagorno-Karabakh, Abkhazia and South Ossetia. We are supporting programmes that not only give social protection to new refugees, but also assist refugees of long standing in finding new avenues of income. In cooperation with the Norwegian Refugee Council (NRC), the Danish Refugee Council (DRC) and UNHCR in Georgia and Azerbaijan we continue to support these populations through housing assistance and small and medium enterprise (SME) development support in rural areas.
• The direct benefits from oil and gas projects tend to disproportionately benefit men in many cultures. We are therefore supporting a women's economic empowerment programme throughout Azerbaijan, initiated by PRAXIS, aimed at increasing women's entrepreneurship, competitiveness and income generation potential. Through this project, women are trained in areas including access to finance, technology and career development.
• We are also supporting an Azerbaijani government initiative - "Successful Transitions to Adulthood" - which is managed by Save the Children. The project aims to create a support programme for young people making the transition from living in institutional care to stable adulthood and independent living.