The US War in Afghanistan and the Grab for Central Asian Oil

Leandro Natividad

The war in Afghanistan led by the United State is more than just a war against ‘terrorism’. Beneath the rhetorics of US President George W. Bush to smash the so-called Al Quida network led by Osama bin Laden in the name of ‘freedom and civilization’ lies a deeper and far-reaching reason: Central Asia’s oil and gas reserves and other natural resources. Bush, Vice President Dick Cheney and some of his Cabinet men – who themselves have corporate ties with giant power corporations – are not just fighting ‘terrorism’. They’re fighting for something else.

Oil politics

The region of Central Asia – encompassing the ‘newly-independent’ states of Azerbaijan, Turkmenistan, Uzbekistan, Tajikistan, Kyrgizstan and Kazakhstan – holds about 10 per cent of the world’s known reserves of oil and gas, which today is worth $5 trillion. According to the Union Oil Company of California (‘Unocal 76’), a giant US petroleum company that has shown interest in exploiting the reserves: ‘The Caspian region contains tremendous untapped hydrocarbon reserves, much of them located in the Caspian Sea basin itself. Proven natural gas reserves within Azerbaijan, Uzbekistan, Turkmenistan and Kazakhstan equal more than 236 trillion cubic feet. The region’s total oil reserves may reach more than 60 billion barrels of oil – enough to service Europe’s oil needs for 11 years. Some estimates are as high as 200 billion barrel’.

Turkmenistan alone, which shares a common border with Afghanistan’s north, has a natural gas resource base as high as 535 trillion cubic feet, the world’s third largest (or fifth, according to the Central Intelligence Agency’s 2000 ‘The World Factbook’). While it already markets this gas to Ukraine and other countries in the former Soviet Union using a Russian pipeline, non-payment of arrears by these cash-strapped republics and the constraints imposed by the Moscow government for the use of the conduit has forced the Niyazov regime in Turkmenistan to look for alternative markets outside the Russian grid, most notably in East Asia.

One obstacle to exploiting these vast resources is transit. Most of Central Asia is landlocked. Turkmenistan, for instance, has a coast in the Caspian Sea – the locus of the region’s fossil fuel deposits – but this body of water is actually a huge lake, providing no access to the sea. Only three options are open, all of them involving the laying of transnational multiple pipelines, to any entity wishing to tap and market this oil and gas bonanza (in particular Turkmenistan’s) : a line to the Black Sea, in which case it will have to pass through Iran (whose Islamic state is regarded by the US government as ‘rogue’); an underwater line across the Caspian Sea and thence to the Black Sea (which will require huge infrastructural outlays – very expensive); or one through Afghanistan and Pakistan, and thence to the Arabian Sea and by tanker to waiting lucrative markets in East Asia.

In the eyes of oil interests, the third option is by far the most practical in terms of infrastructural and transportation cost and access to markets. Said Unocal, citing a World Bank study: ‘The proposed pipeline from Central Asia across Afghanistan and from Central Asia across Afghanistan and Pakistan to the Arabian Sea would provide more favourable netbacks to oil producers through access to higher value markets than those currently being accessed though the traditional Baltic and Black Sea export routes.’

Afghan oil reserves

While there seems to be a well-established view among petroleum players (notably the US government’s Energy Information Administration or EIA) that Afghanistan’s significance from an energy standpoint lies in its potential to provide transit, its own oil and gas reserves are nothing to sneeze at. Its proven and probable natural gas reserves are estimated at up to 5 trillion cubic feet (Tcf) in the 1970s, while its oil and condensate reserves have been estimated at 95 million barrels. These resources are largely untapped.

In the era of Soviet social-imperialism from Khrushchev to Gorbachev, Russian state-capitalists were of the same opinion as the World Bank. Hoping to use the potential revenues from oil and gas exports to the Far East to revive their collapsing economy, Kremlin launched the disastrous 1979 invasion of Afghanistan. After 10 years of trying to suppress the CIA-backed Afghan resistance, the Soviet forces withdrew in defeat.

After the full restoration of capitalism in Russia and the secession of Central Asian nations from the defunct USSR, it was the turn of imperialism to ponder the complexities of turning that potential petroleum bonanza into actual megabucks, and make it serve as a pawn to advance its geo-political agenda. Since the US controls most major sources of petroleum and sells them at high prices to the European Union and Japan, the latter saw Central Asia as a possible way out of this bind. But the US-led war of aggression in Kosovo scuttled initial European efforts towards this end.

‘Russian and German companies had been trying to establish a pipeline from the Caspian Sea through Eastern Europe, but U.S. bombing of Yugoslavia blocked this plan... The U.S. has its own oil reserves, and does not need to rely on oil from abroad. However, Europe, Japan and Asia are dependent on oil from the Middle East (oil that is controlled by U.S. and British companies) and they are eager for alternative and cheaper sources,’ opined the Philadelphia International Action Center (IACenter), an independent US think-tank.

Having temporarily stumped its rivals, the US government then sought an American oil giant that would help it achieve its two-fold objective of exploiting Central Asia’s black gold while maintaining a tactical oil blockade against its economic rivals. It found one in Unocal.

Unocal and the Taliban

Based in EI Segundo, California, Unocal was founded in 1890 and is one of the oldest and largest oil companies in the United States. Today, it is engaged in the exploration and production of crude oil and natural gas and project development in 14 countries around the world. Its oil and gas productions are split half-and-half between operations in North America as well as in Thailand, Indonesia, Bangladesh, Myanmar, Canada, the Netherlands, Azerbaijan, Congo and Brazil. In 2000, the company produced 175,000 barrels of petroleum liquids and 2,008 million cubic feet of gas per day – mainly from United States’ Gulf of Mexico region, Thailand, and Indonesia.

Unocal is constantly at the centre of public criticism and litigation for its unscrupulous business practices, such as expanding its operations in countries ruled by repressive regimes (Suharto in Indonesia and the SLORC in Myanmar), violating indigenous people’s rights (the Kareni in Myanmar and the Salish and Kootenai tribes in Pablo, Montana) and engendering environmental destruction (clearing rainforests in Myanmar and pouring poisonous wastewater into the San Francisco Bay).

Encouraged by the Clinton administration to grab the opportunity being offered by the government in Turkmenistan, which since 1995 had been shopping around for a partner to build an envisioned oil and gas pipeline to the Arabian Sea, Unocal signed an agreement with the Turkmen regime in 1997 to lay the line that would span the gap between the country’s old Dauletabad gas field (containing 708 billion cubic metes in reserves) to Pakistan through Afghanistan. It formed a consortium of all interested parties in October 1997, the Central Asia Gas Pipeline Consortium (CentGas). This included: Unocal (U.S., with 46.5%); Delta Oil Company Limited (Saudi Arabia, 15%); Turkmenistan government 7%); Indonesia Petroleum, Ltd. or Inpex (Japan, 6.5%); ITOCHU Oil Exploration Co., Ltd or CIECO (Japan, 6.5%); Hyundai Engineering & Construction Co., Ltd. (Korea, 5%); and The Crescent Group (Pakistan, 3.5%).

Unocal intended to use CentGas as a vehicle ‘to evaluate and, if appropriate, to participate in the future construction of a gas pipeline from Turkmenistan through Afghanistan to natural gas markets in Pakistan and, potentially, India.’ Aside from this, Unocal by itself clinched another deal with the Turkmen regime for an even more ambitious project, the Central Asian Oil Pipeline Project (CAOPP).

Regional pipeline

‘The pipeline,’ according to Unocal Vice President John J. Maresca, ‘would become an integral part of a regional oil pipeline system that will utilize and gather oil from existing pipeline infrastructure in Turkmenistan, Uzbekistan, Kazakhstan and Russia. The 1,040-mile-long oil pipeline would begin near the town of Chardzhou, in northern Turkmenistan, and extend southeasterly through Afghanistan to an export terminal that would be constructed on the Pakistan coast on the Arabian Sea. Only about 440 miles of the pipeline would be in Afghanistan. This 42-inch-diameter pipeline will have a shipping capacity of one million barrels of oil per day. Estimated cost of the project – which is similar in scope to the Trans Alaska Pipeline – is about $2.5 billion.’

The fact that Afghanistan was then already ruled by the Islamic fundamentalist Taliban, which the US government and the United Nations (UN) did not recognize as the legitimate regime in the war-torn country, was perceived merely as a slight inconvenience that could be overcome. With the all-out backdoor support of the Clinton administration, and being the moving-spirit behind CentGas, Unocal proceeded in earnest to court the new Afghan government’s cooperation in the venture.

Said Pakistani journalist-academic Ishtiaq Ahmad: ‘The Clinton administration ignored the rise of the Taliban from October 1994 onwards, with the active backing of its allies Pakistan and Saudi Arabia. For political reasons as well, Washington did not object to the emergence of an inherently anti-Iran Sunni force in Afghanistan... For the next three years, between 1995 and 1998, especially after the fall of Kabul in September 1996, Clinton administration officials openly lobbied for the Unocal before Taliban authorities.’

Taliban leaders already favoured the project even before they came to power in 1996. Their only precondition to Unocal was that it also assist in the reconstruction of Afghanistan’s war-damaged infrastructure, and that the pipeline should be open for local consumption at some point within Afghanistan.

‘The Taliban were not just interested in receiving rent for the pipeline route, which could be $100 million a year, but also to involve the oil companies in building roads, water supplies, telephone lines, and electricity power lines,’ added Ahmad.

Although Unocal had already inked the deal with the Taliban, Turkmenistan and Pakistan in May 1997, it failed to meet these two demands. (Ironically, Argentine oil company Bridas – Unocal’s losing rival in the bid for the project – had proposed to build an ‘open’ line, which could also meet the local needs for natural gas; whereas Unocal had proposed to build a ‘closed’ pipeline pumping gas for export only.) From then on, the Taliban increasingly cast a jaundiced eye on the leadership of Unocal in the project.

Biggest obstacle

For its part, Unocal began to regard the Taliban as the biggest stumbling-block in the whole plan. Speaking before a committee of US Congress on February 12, 1998 Maresca declared: ‘The territory across which the pipeline would extend is controlled by the Taliban, an Islamic movement that is not recognised as a government by most other nations..... From the outset, we have made it clear that construction of our proposed pipeline cannot begin until a recognised government is in place that has the confidence of governments, lenders and our company.’

In the same breath, however, Maresca reiterated the indispensability of an Afghan transit: ‘in spite of this, a route through Afghanistan appears to be the best option with the fewest technical obstacles. It is the shortest route to the sea and has relatively favourable terrain for a pipeline. The route through Afghanistan is the one that would bring Central Asian oil closest to Asian markets and thus would be the cheapest in terms of transporting the oil.’

The trillion-dollar deal eventually crashed in 1998 due to additional political pressures. In August 1998 Afghan-transients Osama Bin Laden and his Al-Qaida militants were implicated in the bombing of US embassies in Kenya and Tanzania, as well as American warship USS Cole in Yemen, giving the US an excuse to bomb selected areas within Afghanistan. Coupled with a snowballing protest movement of feminists who decried the Taliban’s anti-women policies and the oil company’s implied support of such discrimination, Unocal finally withdrew from CentGas in December 1998. Since it held the largest percentage of shares, this led to the de facto collapse of the Consortium and the grounding of the pipelines projects.

For everyone interested in exploiting the Central Asian bonanza, most especially the US, the policy direction is clear: remove the Taliban and subjugate Afghanistan.

War of conquest

To say that the Bush administration welcomed the chance presented by the WTC/Pentagon bombings might even turn out to be an understatement. Given the high stakes involved in Central Asia, some quarters are wont to explore the ‘remote’ possibility – remote because of its grossness, not because of lack of precedence – that Washington (or at least a cynical inner circle such as the CIA) knew of the impending bombing but still let it happen.

Whatever the case, Bush and his associates in the military-industrial complex lost no time in declaring war against Afghanistan triggering widespread scepticism that it is really all about stamping out ‘terrorism’.

‘If Bush has the ‘evidence’ he claims, why not bring Bin Laden before the World Court? Are they really just interested in bringing down the Taliban and Osama Bin Laden?’ asked IA Center.

The war’s scale and avowed tactical objective themselves cast further doubt on Washington’s ‘anti-terrorism’ hype. Precipitately scotching the option of astute diplomacy to subject Bin Laden and other September 11 suspects to proper trial, the US government opted to bring to bear its entire conventional war machinery against the backward and impoverished Afghan nation. Furthermore, the often-stressed objective of the war was not to bring the ‘terrorists’ to justice, but to dislodge the Taliban government (packaged in the fallacious syllogism that crushing the Taliban would result in the capture of Bin Laden and the ending of Pan-Islamist attacks against the US).

As an alternative to the Taliban Washington envisions a ‘broad-based’ government of all opposition groups that are friendly to US interests. Once a ‘stable’ Afghanistan is created under the stewardship of the US, NATO or the UN, the aborted pipeline project may then the revived.

Courtesy: ‘Northstar Compass’, January 2002.

Karzai and Musharraf on the Central Asian Gasline Project

Mr Karzai, who arrived in Islamabad earlier yesterday for a one-day visit, said he and Gen Musharraf discussed the proposed Central Asian gas pipeline project ‘and agreed that it was in the interest of both countries’. Pakistan and several multinational companies, including the California-based Unocal Corp and Bridas S.A. of Argentina, have been toying with the idea of constructing a 1,600-km pipeline from Turkmenistan through Afghanistan to growing natural gas markets in Pakistan and, potentially, India. But the project has failed to materialise because of the civil war in Afghanistan and the reluctance of the financial institutions to finance it.

The Irish Times,

February 9, 2002.

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