'Even God Forgot This Place': Welcome to the Oilfields of Azerbaijan

In the late 13th century, the explorer Marco Polo travelled to the region that comprises modern-day Azerbaijan and reported seeing gushing oil geysers, some of which ignited and lit up the night sky. These days, the sky above the capital Baku is more likely to be illuminated by spotlights from stadiums or skyscrapers paid for by the country's black gold.

The city just hosted the inaugural European Games, an Olympics-style multi-sport tournament for athletes from 50 countries, and Azerbaijan's government has spent billions on glittery decorations and lavish ceremonies. Yet rumors of a further devaluation of the country's currency, dipping oil prices, and discontent over the Games' ballooning costs are exposing the vulnerability of a nation whose economy is one of the most oil-dependent in the world.

A few kilometers north of Baku's $640 million Olympic Stadium — which recently hosted a lavish opening ceremony that featured fireworks, Vladimir Putin, magic carpets, and Lady Gaga — a shepherd named Ibrahim gazed at his flock next to a clump of reeds growing improbably in the wastelands of the Balakhani oilfields.

"I'm so proud," he told VICE News. "Before these games, nobody knew where, or even what, is Azerbaijan, but now everybody will go back to their countries and tell their families about us."

Related: Azerbaijan Hosts Extravagant European Games Ceremony Amid Allegations of Censorship and Despotism

It's unlikely that any European Games spectators will make it to Balakhani, yet the coveted crude that fuels what was the world's first oil industry was originally dredged from this exact spot. In 2013, while Europe was still bleakly trudging through recession, Azerbaijan sold an average of 880,000 barrels of oil per day, and was one of the world's fastest-growing economies for several years.

But the precipitous decline in the price of oil from $110 to a low of $50 has caused some panic in the Azerbaijani government, including a recent 30 percent devaluation of the Manat currency. It is abundantly clear, however, that nation's vast wealth from hydrocarbons has never truly touched the neighborhoods around the oilfields.

A few houses in Balakhani stand clean, bright and proud behind metal gates fringed with vines, while others are clustered in areas with an appearance that verges on post-apocalyptic. The wind whips up putrid fumes of burning plastic next to an oil-slicked lake entirely ringed with a crest of blackened bottles, tires, ossified birds, and children's clothes. Some shacks sit in the shadow of the hypnotic Soviet-era "nodding donkey" pumps, which oscillate metronomically, squeaking as they suck the ground dry. Villagers are not accustomed to seeing foreigners, yet welcoming hand signals, offers of tea, and requests for selfies are numerous.

"What are you doing here? Even God forgot this place!" a young man told VICE News.

A local named Samira stood in the doorway of her 100-year-old house in the middle of a desert filled with metal and crisscrossing pipes. The area is practically uninhabited, but Samira has lived here all her life. After both her grandparents and parents died from illnesses, she now looks after her two younger brothers.

"I suppose I'm quite proud to live where Azerbaijan's oil was first found, but sometimes I wish that they would improve things here, most people in Azerbaijan don't have a job," she said. "Right now I'm not working because they closed down the factory for the European Games. I guess they will open it after it's over."

Reports have swirled around the city that company heads and state employees have been forced to buy tickets to the Games, with the money taken directly from their salaries. A teacher in Azerbaijan makes on average $150 per month. A recent wave of arrests also saw oligarchs with debts to the state shaken down to fill the European Games-size hole in the budget.

Related: Dying Behind Bars': Human Rights Activists Jailed and Deported Before Azerbaijan's European Games

Such jitters might be surprising in a land where petrol flows so freely that in the nearby Naftalan spa, people literally bathe in oil for its so-called therapeutic properties. From the late 1800s, oil barons such as the Nobel dynasty spilled into the city, building opulent villas on Baku's seafront "Oilman Avenue." By 1900, Azerbaijan became the provider of half the world's oil. So coveted was the region in World War II that in one video, Nazi generals can be seen presenting Hitler with a cake of the Caspian Sea, with the smiling Führer cutting a slice labeled "Baku."

The oilfields are home to a large number of refugees and internally displaced people (IDPs) from Nagorno-Karabakh, a disputed region over which Azerbaijan and neighboring Armenia have fought a ruinous conflict that has claimed more than 30,000 lives since the late 80s.

At a rowdy café, Emil, sipping a beer next to wall daubed with posters of war veterans, delivered an extensive patriotic speech, welcoming foreigners to the country. Asked if anyone living in the oilfields works for the oil industry, and whether the government subsidizes people that live here, Emil hesitates and turns to the translator.

"Look, don't translate this to him because I am too ashamed," he said. "Everybody knows where the money really goes." Emil pointed to the sky, a common gesture in Azerbaijan to refer to the government without audibly saying so.

Large Jeeps with tinted windows rolled past, and people turned their heads. Oil has transformed Baku into a gleaming Oz-like metropolis, though the authorities, playing the role of the wizard, would prefer tourists not to peek under the curtain at places such as Balakhani. Much of the land belongs to SOCAR, the state oil company, which has been hostile to the media in the past. In 2012, journalist Idrak Abbasov was beaten into a coma by security guards for the company while he filmed illegal evictions and demolitions near his house. Nobody was ever prosecuted for the crime.

Related: 'Europe Is Closing Its Eyes to Human Rights' — Daughter of Jailed Azerbaijan Activist Leyla Yunus Pleads for Help

"Foreigners came, drilled our land, and gave us money which we spend," political scientist Hikmet Hadjizadeh told VICE News. "Is that development? No. This is a petrocracy. We have been hearing for over 20 years that our economy would diversify, but so far nothing happened, and true development will only occur when we have political and property rights."

SOCAR's website features a quote from Azerbaijan's former President Heydar Aliyev, who signed the "contract of the century" in 1994 that opened Azerbaijan's oil and gas fields to a consortium of multinationals led by BP.

"Azerbaijan's possession of large reserves of oil and gas is our nation`s good fortune and is the most important factor for the welfare of its people and the country's development, now and in the future," Aliyev said.

With Europe keen to reduce dependence on Russian energy, new pipelines connecting Azerbaijan's gas fields with the Mediterranean are eagerly awaited. Meanwhile, back in Balakhani, Samira smiled and squinted into the amber glow of the evening sun as it slowly sank into the horizon. The squeak of a nearby pump perforated the silence.

"I would gladly invite you in for a tea, but right now I can't buy any," she said. "Inshallah, next time you visit, I will have some."

Follow Andrew Connelly on Twitter: @connellyandrew