Although my understanding is that in the last few years, the quantity and to a greater degree the quality of those reserves have been downgraded from the more optimistic projections of the mid 1990s.
48–119 CC
1998
U.S. INTERESTS IN THE CENTRAL ASIAN REPUBLICS
HEARING
BEFORE THE
SUBCOMMITTEE ON
ASIA AND THE PACIFIC
OF THE
COMMITTEE ON
INTERNATIONAL RELATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTH CONGRESS
SECOND SESSION
FEBRUARY 12, 1998SNIP
STATEMENT OF JOHN J. MARESCA, VICE PRESIDENT OF INTERNATIONAL RELATIONS, Unocal CORPORATION Mr. MARESCA. Thank you, Mr. Chairman. It's nice to see you again. I am John Maresca, vice president for international relations of the Unocal Corporation. Unocal, as you know, is one of the world's leading energy resource and project development companies. I appreciate your invitation to speak here today. I believe these hearings are important and timely. I congratulate you for focusing on Central Asia oil and gas reserves and the role they play in shaping U.S. policy.
I would like to focus today on three issues. First, the need for multiple pipeline routes for Central Asian oil and gas resources. Second, the need for U.S. support for international and regional efforts to achieve balanced and lasting political settlements to the conflicts in the region, including Afghanistan. Third, the need for structured assistance to encourage economic reforms and the development of appropriate investment climates in the region. In this regard, we specifically support repeal or removal of section 907 of the Freedom Support Act.
Mr. Chairman, the Caspian region contains tremendous untapped hydrocarbon reserves. Just to give an idea of the scale, proven natural gas reserves equal more than 236 trillion cubic feet. The region's total oil reserves may well reach more than 60 billion barrels of oil. Some estimates are as high as 200 billion barrels. In 1995, the region was producing only 870,000 barrels per day. By 2010, western companies could increase production to about 4.5 million barrels a day, an increase of more than 500 percent in only 15 years. If this occurs, the region would represent about 5 percent of the world's total oil production.
One major problem has yet to be resolved: how to get the region's vast energy resources to the markets where they are needed. Central Asia is isolated. Their natural resources are landlocked, both geographically and politically. Each of the countries in the Caucasus and Central Asia faces difficult political challenges. Some have unsettled wars or latent conflicts. Others have evolving systems where the laws and even the courts are dynamic and changing. In addition, a chief technical obstacle which we in the industry face in transporting oil is the region's existing pipeline infrastructure.
Because the region's pipelines were constructed during the Moscow-centered Soviet period, they tend to head north and west toward Russia. There are no connections to the south and east. But Russia is currently unlikely to absorb large new quantities of foreign oil. It's unlikely to be a significant market for new energy in the next decade. It lacks the capacity to deliver it to other markets.
SNIP
The key question then is how the energy resources of Central Asia can be made available to nearby Asian markets. There are two possible solutions, with several variations. One option is to go east across China, but this would mean constructing a pipeline of more than 3,000 kilometers just to reach Central China. In addition, there would have to be a 2,000-kilometer connection to reach the main population centers along the coast. The question then is what will be the cost of transporting oil through this pipeline, and what would be the netback which the producers would receive.
For those who are not familiar with the terminology, the netback is the price which the producer receives for his oil or gas at the wellhead after all the transportation costs have been deducted. So it's the price he receives for the oil he produces at the wellhead.
The second option is to build a pipeline south from Central Asia to the Indian Ocean. One obvious route south would cross Iran, but this is foreclosed for American companies because of U.S. sanctions legislation. The only other possible route is across Afghanistan, which has of course its own unique challenges. The country has been involved in bitter warfare for almost two decades, and is still divided by civil war. From the outset,
we have made it clear that construction of the pipeline we have proposed across Afghanistan could not begin until a recognized government is in place that has the confidence of governments, lenders, and our company. (emphasis added/JC)
http://commdocs.house.gov/committees/intlrel/hfa48119.0... Pipeline Politics Taint US WarSalim Muwakkil | Chicago Tribune | March 18, 2002
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Outside this country, there is a widespread belief that U.S. military deployments in Central Asia mostly are about oil.
An article in the Guardian of London headlined, "A pro-western regime in Kabul should give the U.S. an Afghan route for Caspian oil," foreshadowed the kind of skeptical coverage the U.S. war now receives in many countries.
"The invasion of Afghanistan is certainly a campaign against terrorism," wrote author George Monbiot in the Oct. 22, 2001, piece, "but it may also be a late colonial adventure."
He wrote that the U.S. oil company Unocal Corp. had been negotiating with the Taliban since 1995 to build "oil and gas pipelines from Turkmenistan, through Afghanistan and into Pakistani ports on the Arabian sea." He cited Ahmed Rashid's authoritative book "Taliban, Militant Islam, Oil and Fundamentalism in Central Asia" as a source for this information.
Rashid, who has reported on Afghan wars for more than 20 years as a correspondent for the Eastern Economic Review and the Daily Telegraph, carefully documents in his book how the U.S. and Pakistan helped install the Taliban in hopes of bringing stability to the war-ravaged region and making it safer for the pipeline project. Unocal pulled out of the deal after the 1998 terrorist attacks on U.S. embassies in Kenya and Tanzania were linked to terrorists based in Afghanistan.
"The war against terrorism is a fraud," exclaimed John Pilger in an Oct. 29 commentary in the British-based Mirror. Pilger, the publication's former chief foreign correspondent, wrote, "Bush's concealed agenda is to exploit the oil and gas reserves in the Caspian basin, the greatest source of untapped fossil fuel on earth."
These harsh assessments are not just those of embittered ideologues. They are common fare. "Just as the Gulf War in 1991 was about oil, the new conflict in South and Central Asia is no less about access to the region's abundant petroleum resources," writes Ranjit Devraj in the Hong Kong-based Asia Times, a business-oriented publication.
http://www.why-war.com/news/2002/03/18/pipeline.html TALIBAN DEFEAT REVIVES DEBATE ON TRANS-AFGHAN PIPELINEIgor Torbakov 12/12/01
The defeat of the Taliban appears to be reviving a debate about pipeline construction in Afghanistan that would widen international access to Central Asia’s vast energy resources. A few observers argue that pipelines might speed Afghanistan’s reconstruction. However, others say that an attempt to establish Afghanistan as a transit hub for energy exports could provoke a collision of interests among key power brokers in the region.
Natural gas-rich Turkmenistan in 1997 forged a consortium with oil companies, led by Unocal, to build a trans-Afghan pipeline. The $1.9-billion project hit snags almost from the time of its announcement. The main obstacle was the Taliban’s control of most of Afghanistan’s territory, and the on-going civil war. By 1998, construction plans collapsed after Unocal withdrew from the consortium.
With the Taliban no longer a factor in Afghanistan, some experts say the pipeline idea merits a second look. "The large-scale projects aimed at building gas and oil pipelines linking the Caspian region with the attractive international market of the Arabian Sea may become the principal, if not the only, means to breathe a
life into Afghanistan", said Carnegie Endowment’s Central Asia scholar Martha Brill Olcott in the interview with the Moscow daily Izvestia.
SNIP
A number of Russian observers tend to interpret the current US troop deployment and basing agreements with the Central Asian nations within the context of energy geopolitics. "The United States does not conceal the plans to establish its bases in the region to secure the safety of energy transit routes," writes the Kommersant daily.
Another detail adds to the Kremlin’s worries. Zalmay Khalilzad, an Afghan-American academic, recently was appointed in June as special assistant to President George W. Bush and senior director at the National Security Council for the Persian Gulf and southwest Asia and other issues. According to Philip Smith, director of the Center for Public Policy Analysis, "Zalmay is immensely influential in driving US policy toward Afghanistan." Four years ago, Khalilzad served as a liaison for Unocal in the trans-Afghan pipeline project.
http://www.eurasianet.org/departments/business/articles...