From Bloomberg:

Iran Influence in Azerbaijan May Unsettle BP's Oil Investments

Hajiaga Nuri, an elder in an impoverished village north of Azerbaijan’s capital of Baku, is part of the region’s first Islamic push against a pro-Western leader after similar regimes were ousted in the Middle East.

Nuri, 59, plans to join a march against the government next month led by a banned Islamic party that Azeri authorities say has Iranian links. The party’s stated goal: to fight against the regime of President Ilham Aliyev, a U.S. ally they accuse of suppressing Muslims. In Tunisia and Egypt, by contrast, demonstrators mostly called for secular democracy.

“I want to live only under Islamic law,” Nuri said as women wearing black headscarves and bearded men walked by walls in Nardaran bearing religious inscriptions. The Shiite theocracy of neighboring Iran is “friendly and brotherly,” he added.

Azerbaijan’s energy transit routes to Europe bypass Russia, making the former Soviet satellite a crucial partner for the West and oil companies such as the U.K.’s BP Plc. (BP/) Azeri officials accuse Iran of trying to stir up Islamic protests to weaken Aliyev, 49.

That in turn would make the country less safe for U.S. and European investment, said Theodore Karasik, director of research at the Dubai-based Institute for Near East and Gulf Analysis.

“Iran isn’t seeking to overthrow Aliyev but to destabilize the situation in the country so that it scares away Western investors,” Karasik said.

Iranian Television

Azeri-language programs of Iran’s Sahar 1 television channel, beamed into Azerbaijan over official protests, criticize the government’s domestic and foreign policies and say that Western companies are plundering the country’s oil riches. Iran’s Shiite religion is shared by two-thirds of the 9-million population in Azerbaijan; almost a quarter of Iran’s 75 million people are ethnic Azeri.

“The efforts to instigate unrest here are contrary to the agreement that Azerbaijan and Iran signed not to act against each other’s interests,” Ali Hasanov, an aide to the Azeri president, said in a March 28 phone interview.

Iranian Ambassador Mohammad Baqer Bahrami attended the March 18 funeral in Nardaran of the former leader of the Islamic Party of Azerbaijan, Haji Alikram Aliyev, who isn’t related to the president.

‘General Instability’

“While Iran ultimately might be interested in the overthrow of the government in Baku, as it is with certain Middle Eastern regimes, it is more realistically aiming for general instability in Azerbaijan,” Austin, Texas-based intelligence-consulting group Stratfor said in a research note earlier this month.

Companies led by London-based BP have invested more than $31 billion in Azerbaijan’s oil and gas fields since the 1991 Soviet collapse. Azerbaijan can pump as much as 1.2 million barrels of oil a day to Turkey through the Baku-Tbilisi-Ceyhan pipeline, a project funded in part by Western governments to allow Caspian energy supplies to circumvent Russia.

The country may also be a major source of natural gas for the European Union-backed 7.9 billion-euro ($11-billion) Nabucco pipeline to be built across Turkey. Tamam Bayatli, a BP spokeswoman in Azerbaijan, said the company doesn’t comment on political issues.

Street Protests

The concern in Azerbaijan comes after street protests helped overthrow Tunisian leader Zine El Abidine Ben Ali in January. Egyptian President Hosni Mubarak stepped down after 30 years about a month later following a popular uprising.

In Bahrain, which is ruled by a Sunni royal family and has a Shiite majority, neighboring Gulf allies have sent troops to shore up the government on the grounds that Iran was influencing the opposition.

King Hamad bin Isa Al Khalifa on March 21 said Bahrain had foiled “an external plot” to subvert security and stability. The former head of the U.A.E. air force, Major General Khaled Bu-Ainnain, a day later described the unrest as a “Shiite plot supported by Iran.”

Aliyev, who took over from his father in 2003, is already facing separate protests led by secular pro-democracy opponents, who staged several demonstrations in early March demanding the president’s resignation. Youth activists who have launched a campaign on the Facebook Inc. social-networking website plan to hold nationwide protests on April 2 along with supporters of secular opposition parties.

Nothing to Lose?

State media in Iran has blamed “anti-religious” policies by Aliyev, such as banning Islamic headscarves at schools, for causing the Islamic unrest.

“The people want to rise up. The devout have nothing to lose,” said the Islamic Party’s acting head, Elchin Manafov. “We are ready to be martyred for God, for our country and people, and for the protection of our values.”

At least 10,000 people will take part in an April 8 demonstration in Azadliq (Freedom) Square if government permission for the rally is granted, he said.

Azeri Interior Minister Ramil Usubov vowed to crack down on unsanctioned protests as the secular opposition plans a major demonstration in the capital on April 2, in defiance of a police ban, to demand President Aliyev’s resignation.

“No one should have any doubt that moves to undermine stability and peace in the country will be resolutely thwarted,” Usubov said in comments broadcast on state television today.

Iranian Financing

The Iranian government appears to be financing the Islamic Party, Nasib Nasibli, a former Azeri ambassador to Iran, said in a March 24 interview. “Iran doesn’t want to see a democratic, pro-Western system in Azerbaijan, it wants to see pro-Iranian Islamists in charge here,” he said.

The leader of the party, Movsum Samadov, was arrested in January after calling for the overthrow of the government and harshly criticizing the headscarf ban. The rule provoked demonstrations after it was introduced by the Education Ministry in December.

Manafov, a soft-spoken, bearded man in his thirties, dismissed allegations that his party has close ties with Iran, saying that Iranians provide it only with “moral” support.

Aliyev turned down an invitation from Iranian counterpart Mahmoud Ahmadinejad to visit Tehran on March 27 to join Nowruz holiday celebrations, Iran’s state-run Fars news service reported March 23. Aliyev’s office declined comment.

Iranian Foreign Ministry spokesman Ramin Mehmanparast wasn’t available to comment when called at his office and cell phone.

In Nardaran, the scene of regular protests over the past decade in which demonstrators have burned U.S., British and Israeli flags, residents call every day into Iran’s Sahar 1 TV.

Since the 1979 Islamic Revolution, “international imperialism has been unable to turn Iran from its path,” said Nuri, the village elder.