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November 2001

The Oil Great Game

By Karen Nakamura

A sense of inevitability punctuated comments by a Pakistani talking-head in yet another discussion about Afghanistan. The gist of what he said was, "We get rid of the Taliban, install a new government and run a pipe line through Afghanistan. Everybody will get rich and be happy."

It was more than a glib remark. It's a nasty truth about American foreign policy. One most Americans refuse to acknowledge in their often misguided but heartfelt, patriotism. We all want to protect America the Beautiful but from whom? Just like John F. Kennedy's assassination, we sense something else is going on here besides "getting the bad guys." To make informed decisions, we need a wide range of data. A look at "other factors not often touched upon" might be apropos. Of interest to many is "What part does oil play in the equation?"

All over the world, for thousands of years, civilians have been suffering because two factions of power-lusting madmen, often not locals, were/are taking out their aggressions in the corn fields. These destructive wars have less to do with the welfare of the citizenry than with momentous multi-national power conglomerates shifting and colliding against each other in a manner similar to the earth's tectonic plates.

This is what Ahmed Rashid, author of the best selling "Taliban; Militant Islam, Oil and Fundamentalism in Central Asia" calls the Great Game of Expansion, the eternal game of global domination, of dividing the world up between the competition. Much of the following information is from that book.

In the Great Game, at this juncture, oil is the dominant factor, the big money-maker. Does oil fit into the Afghan picture? Like a glove. Known throughout the world as oil men, President Bush and the real man in charge, Vice President Dick Cheney, could be involved up to their eyeballs. What's good for oil is good for America.

The powers-that-be are vying for control of turf estimated to be the largest undeveloped oil field in the world and the biggest find in 30 years. These fields are found under the Caspian Sea and surrounding Central Asian countries such as Turkmenistan and Kazakhstan.

Afghanistan fits into the configuration because pipelines to South Asian markets would most easily traverse through Afghanistan, Pakistan and then on to India . Iranian routes west would be the least expensive and easiest for Europe but the USA doesn't like Iran. Turkey is in an excellent position as a receiving port but there's that Kurdish problem along the pipeline route. Cheney and company certainly don't want to be beholden to Russia. And China is too far to provide a feasible port at this time. That leaves the South Asian route as the safest back-up plan if it weren't for those pesky Taliban.

Around 1984, a consortium of corporations invested $8 billion into producing oil from the Guneshii, Chirag and Azeri oil fields in the Caspian sea region. While it will probably take 30 years to develop these sites, extractions are estimated to be approximately 4 billion barrels from the three wells alone.

By 1992, British Petroleum, (BP Amoco), gained exclusive rights to develop the Chrag field. BP also assumed a leading role in the Azerbaijan International Oil Consortium to develop lucrative fields in that country. Members of this consortium included the American companies of ExxonMobil, McDermott International, Pennzoil and Unocal besides companies from Saudi Arabia, Norway, Turkey and Russia. Other fields, such as the Tengiz field in Kazakhstan, are reported to have 6 to 9 billion barrels. The Kazakj field, Kashagan, alone could contain 10 billion gallons of recoverable oil.

As early as 1994, a transportation dilemma became evident. How to get the vast reserve of oil from the land-locked Caspian Sea and surrounding territories to seaports for shipping? Build a pipeline. Russia wanted the pipelines to pass through Russian territory so it could gain vast profits and control. To achieve this end, it opened a northern pipeline earlier this year which runs to the Black Sea. China plans to construct an extensive 5000 mile pipeline to China for its markets.

The northern Tengiz-Novorossisk pipeline, running from Kazakhstan to the Russian port of Novorossisk, is owned by the Caspian Pipeline Consortium. While there are interests from Russia, Kazakhstan, Oman, etc., Chevron and ExxonMobil own approximately 50%. However, profits are great enough that Azerbaijan, Turkmenistan, Kazakhstan and Georgia, all countries surrounding the fields, are seeing their future in oil. Estimated profits run as high as $4 trillion.

In an attempt to solve the approach to the South Asia, the Argentinean oil company, Bridas, which already held concessions in Turkmenistan, suggested laying a pipeline south across Afghanistan to Pakistan and India. However, in 1995, with support from Washington, the Texas-based Unocal proposed the same venue. The race was on for the Southern route.

Despite the jockeying for position, all was not perfect on capitalism's path. Unocal pursued rights to cross Afghanistan and was about to sign contracts when the Taliban's treatment of women began getting negative press. Unocal withdrew from the Central Asia Gas (CentGas) pipeline project stating it had nothing to do with the Taliban. That withdrawal put the whole pipeline deal on the back burner. Removal of the Taliban and introducing a government that looks favorably on big oil interests could put Unocal and its consortium back in business.

In the meantime, the Western route, the Baku-Ceyhan pipeline, became the primary route for Europe and the US. When the Afghan/Unocal pipeline was squashed, the United States put its backing on this Baku (Azerbaijan)-Ceyhan (Turkey) line and made it the main plank of US policy in the area. The US tried to convince Kazakhstan and Turkmenistan to build their pipe lines under the Caspian Sea and feed into the Baku-Ceyhan line to make the more expensive route through Azerbaijan, Georgia and Turkey financially viable.

In the meantime, Turkmenistan signed contracts with Iran and Turkey to bring oil to the same Ceyhan seaport on the Mediterranean Sea. Iran, Turkey and Pakistan are also building relations to control the east-west flow of oil from the region.

The Unocal pullout from Afghanistan was in December 1998. In February 1999, Turkhmenistan signed a deal with a US consortium with strong Chevron influence to build a line to Turkey to go under the Caspian Sea to Azerbaijan and thereby avoiding Iran. This is the Baku-Ceylan line.

According to an article by Marjorie Cohn in the August 10, 2000, Chicago Tribune, as late as June of 2000, Dick Cheney was lobbying "long and hard" for the lifting of US sanctions against Iran so the line could go through. In a 1997 in an article in The Oil and Gas Journal, Cheney stated his opinion that American oil and gas companies must do business with countries with policies "unpalatable" to the US Cheney also looked to lift restrictions against Azerbaijan, there because of its ethnic cleaning of Armenians. Cohn feels this lack of concern for human rights by Cheney is tied to the fact that Azerbaijan is the key to reaching the Caspian oil deposit. In fact, Ms. Cohn observed that a Republican administration is likely "to increase US intervention in regions when it suits Dick Cheney's oil and other corporate concerns."

 

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