The Trans-Afghan Pipeline

Chapter 6

Washington's Silk Road Strategy consists in not only excluding Russia from the westbound oil and gas pipeline routes out of the Caspian Sea basin, but also in securing Anglo-American control over strategic southbound and eastbound routes.

This strategy consists in isolating and eventually "encircling" the former Soviet republics by simultaneously taking control of both westbound and east/southbound corridors. In this regard, Washington's strategy in support of the oil giants is also to prevent the former republics from entering into pipeline ventures (or military cooperation agreements) with Iran and China.

According to the Washington-based Heritage Foundation, a conservative public policy organization, the American diplomatic dance with the Taliban was partly an attempt to prevent the construction of a pipeline through Iran and to reduce Russian leverage over Turkmenistan and Kazakhstan.(1)

Backed by the Clinton administration, Unocal, the California-based oil giant, developed a plan in 1995 to build an oil and gas pipeline route from Turkmenistan, through Afghanistan and Pakistan, to the Arabian Sea. Unocal is also involved in the westbound Baku-Ceyan pipeline project out of Azerbaijan across Turkey and Georgia, together with BP, which has a majority stake in the consortium.

The CentGas Consortium

By transiting through Afghanistan, Unocal's CentGas pipeline project was meant to bypass the more direct southbound route across Iran. Unocal's design was to develop a dual pipeline system that would also transport Kazakhstan's huge oil reserves in the Tenghiz Northern Caspian region to the Arabian Sea.

Although the Russian oil giant Gazprom was part of the CentGas consortium, its participation was insignificant.(2) The hidden agenda was also to weaken Gazprom, which controls the Northbound gas pipeline routes out of Turkmenistan, and undermine the agreement between Russia and Turkmenistan, which handled the export of Turkmen gas through the network of Russian pipelines.

After Unocal had completed a first round of negotiations with Turkmenistan's President Niyazov, it opened talks with the Taliban.(3) In turn, the Clinton administration decided to back the installation of a Taliban government in Kabul in 1996, as opposed to the Northern Alliance, which was backed by Moscow:

Impressed by the ruthlessness and willingness of the then-emerging Taliban to cut a pipeline deal, the State Department and Pakistan's ISI agreed to funnel arms and funding to the Taliban in their war against the ethnically Tajik Northern Alliance. As recently as 1999, US taxpayers paid the entire annual salary of every single Taliban government official.(4)

Meanwhile, the Russians were providing logistical support and military supplies to General Massoud's Northern Alliance out of military bases in Tajikistan. When Kabul finally fell to the Taliban with the military backing of America's ally Pakistan, in September 1996, State Department spokesman Glyn Davies said the US found "nothing objectionable" in the steps taken by the Taliban to impose Islamic law. Senator Hank Brown, a supporter of the Unocal project, said "the good part of what has happened is that one of the factions at least seems capable of developing a government in Kabul." Unocal's Vice-President, Martin Miller, called the Taliban's success a "positive development".(5)

When the Taliban took Kabul in 1996, Washington said nothing. Why? Because Taliban leaders were soon on their way to Houston, Texas, to be entertained by executives of the oil company, Unocal....A US diplomat said, "The Taliban will probably develop like the Saudis did." He explained that Afghanistan would become an American oil colony, there would be huge profits for the West, no democracy and the legal persecution of women. "We can live with that", he said.(6)

Washington's endorsement of the Taliban regime instead of the Northern Alliance was part of the "Big Game" and the added rivalry between Russian and US conglomerates for control over oil and gas reserves, as well as pipeline routes out of Kazakhstan and Turkmenistan. In early 1997, Taliban officials met at Unocal's Texas office:

[Unocal's Barry] Lane says he wasn't involved in the Texas meetings and doesn't know whether then-Governor George W. Bush, an ex-oil man, ever had any involvement. Unocal's Texas spokesperson for Central Asia operations, Teresa Covington, said the consortium delivered three basic messages to the Afghan groups. "We gave them the details on the proposed pipelines. We also talked to them about the projects'benefits, such as the transit fees that would be paid," she says. "And we reinforced our position the project could not move forward until they stabilized their country and obtained political recognition from the US and the international community."

Covington says the Taliban were not surprised by that demand.... In December 1997, Unocal arranged a high-level meeting in Washington, DC, for the Taliban with Clinton's undersecretary of state for South Asia, Karl Inderforth. The Taliban delegation included Acting Minister for Mines and Industry Ahmad Jan, Acting Minister for Culture and Information, Amir Muttaqi, Acting Minister for Planning, Din Muhammad and Abdul Hakeem Mujahid, their permanent UN delegate.(7)

Two months following these negotiations, in February 1998, Unocal Vice President for International Relations, John Maresca, in a statement to the House Committee on International Relations, called for "the need for multiple pipeline routes for Central Asian oil and gas resources". (See Chapter 5.) Implied in his statement, US foreign policy in the region was to be geared towards destabilizing the north, west and southbound pipeline routes controlled by Russia, as well as competing pipelines through Iran:

[A] chief technical obstacle [or more likely political 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-centred Soviet period, they tend to head north and west toward Russia. There are no connections to the south and east....

The key question then, is how the energy resources of Central Asia can be made available to nearby Asian markets.... One obvious route south would cross Iran, but this is foreclosed for American companies because of US 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.

Unocal foresees a pipeline which would become part of a regional system that would gather oil from existing pipeline infrastructure in Turkmenistan, Uzbekistan, Kazakhstan and Russia. The 1,040-mile long oil pipeline would extend south through Afghanistan to an export terminal that would be constructed on the Pakistan coast. This 42-inch diameter pipeline would have a shipping capacity of one million barrels of oil per day. The estimated cost of the project, which is similar in scope to the trans-Alaska pipeline, is about $2.5 billion.

Without peaceful settlement of the conflicts in the region, cross-border oil and gas pipelines are not likely to be built. We urge the Administration and the Congress to give strong support to the UN-led peace process in Afghanistan. The US Government should use its influence to help find solutions to all of the region's conflicts.(8)

The Unocal-Bridas Feud

There was something else behind the Unocal pipeline project, which mainstream reports failed to mention. The Taliban had also been negotiating with an Argentinean oil group, Bridas Energy Corporation, and were "playing one company against the other".(9) Bridas belonged to the wealthy and powerful Bhulgeroni family. Carlos Bhulgeroni is a close friend of former Argentine President Carlos Menem, whose government was instrumental in implementing in 1990-under advice from the World Bank-a comprehensive deregulation of Argentina's oil and gas industry. This deregulation contributed to the enrichment of the Bhulgeroni family.

In 1992-several years prior to Unocal's involvement-Bridas Energy Corporation had obtained gas exploration rights in Eastern Turkmenistan, and the following year it was awarded the Keimir oil and gas block in Western Turkmenistan. Washington considered this an encroachment. It responded to Bridas'inroads into Central Asia by sending former Secretary of State Alexander Haig to lobby for "increased US investments" in Turkmenistan.(10) A few months later, Bridas was prevented from exporting oil from the Keimir block.

Unocal and Bridas were clashing in their attempts to gain political control. While Bridas had a head start in its negotiations with Turkmen officials, Unocal had the direct support of the US Government, which was acting both overtly (through diplomatic channels) as well as covertly to undermine Bridas Energy Corp.

In August 1995, at the height of the Afghan civil war, Bridas representatives met up with Taliban officials to discuss the pipeline project. Meanwhile, Turkmen President Saparmurat Niyasov had been invited to New York (October 1995) to sign an agreement with Unocal and its CentGas consortium partner, Delta Oil Corporation of Saudi Arabia. The agreement was signed by President Niyazov of Turkmenistan and John F. Imle, Jr., President of Unocal, and witnessed by Badr M. Al-Aiban, CEO of Delta Oil Corporation.

Bridas and the Taliban

In February 1996, Bridas Energy Corporation of Argentina and the Taliban provisional government signed a preliminary agreement. Washington responded through its embassy in Islamabad, urging Pakistan's Prime Minister Benazir Bhutto to dump Bridas and grant exclusive rights to Unocal.(11) Meanwhile, the Clinton administration had funnelled, through Pakistan's ISI, military aid to advancing Taliban forces. This support was a crucial factor in the Taliban's takeover of Kabul in September 1996. Following the installation of a hard-line Islamic government, Unocal confirmed that "it will give aid to Afghan warlords once they agree to form a council to supervise the project".(12)

Back in Texas, Bridas Energy Corporation filed a $15 billion lawsuit against Unocal, accusing it of dirty tricks and interference in:

...secretly contacting the Turkmen deputy prime minister for oil and gas [in 1996] about its own pipeline plan. According to a Bridas source, the Turkmen government then made an overnight decision to cut off the export of oil from Bridas'Keimir field on the Caspian Sea. The company also alleges that the deputy prime minister demanded that Bridas, with its cash flow strangled, renegotiate its concession."We found written evidence that Unocal was behind the curtains," the Bridas source said.(13)

BP-Amoco Enter the Pipeline Saga

Facing pending financial difficulties, 60 per cent of Bridas shares were sold in August 1997 to the American Oil Company (Amoco), leading to the formation of the Pan American Energy Corporation. The bidders in the Bridas merger were Amoco and Union Texas Petroleum of the United States, France's Total, Royal Dutch Shell, Spain's Endesa and a consortium including Spain's Repsol and US Mobil.

For Amoco, which later merged with BP in 1998, Bridas was a prize acquisition, which was facilitated by Chase Manhattan and Morgan Stanley. Former National Security adviser, Zbigniew Brzezinski, was a consultant to Amoco. Arthur Andersen-the accounting firm implicated in the 2002 Enron scandal-was put in charge of "post-merger integration".(14)

BP-Amoco is the main player in the Westbound pipeline routes out of the Caspian Sea basin including the controversial Baku-Ceyan pipeline project through Georgia and Turkey. By acquiring Bridas, the BP-led consortium gained a direct stake in the east and southbound pipeline negotiations.

Unocal is both a "rival" as well as a consortium "partner" of BP. In other words, BP controls the westbound pipeline consortium in which Unocal has a significant stake. With Bridas in the hands of BP-Amoco, however, it is unlikely that a future trans-Afghan pipeline will proceed without the consent and/or participation of BP:

Recognizing the significance of the merger, a Pakistani oil company executive hinted, "If these [Central Asian] countries want a big US company involved, Amoco is far bigger than Unocal."(15)
Following the takeover of Bridas by Amoco, Bridas'successor company, Pan American Energy Corporation, continued to actively negotiate with the Taliban. But the dynamics of these negotiations had been fundamentally modified. Pan American Energy was negotiating on behalf of its Chicago-based parent company Amoco. Moreover, the Clinton administration had abandoned its dirty tricks and was now backing Amoco's subsidiary.

Meanwhile, in August 1998, Amoco and BP announced their decision to unite their global operations leading to the formation (together with Atlantic Ritchfield) of the world's largest oil company.

The Bridas-Unocal rivalry had evolved towards "a fall-out" between two major US corporations (Unocal and BP-Amoco), which were also "partners" in the westbound pipeline projects. Both Unocal and BP-Amoco have extensive links to seats of political power, not only in the White House and Congress, but also with the military and intelligence establishment in charge of covert operations in Central Asia. Both companies contributed generously to the Bush presidential campaign.

The merger between BP and Amoco (leading to the integration of British and American oil interests) had no doubt also contributed to the development of closer political ties between the British and US Governments. Responding to the merger of American and British interests in oil, banking and the military-industrial complex, Britain's new Labour government, under Prime Minister Tony Blair, has become America's unconditional ally.

The US Embassy Bombings

In the course of 1998, talks between Taliban and Unocal officials had stalled. The honeymoon was over. Then came the East African US Embassy bombings, allegedly by Osama bin Laden's Al Qaeda, and the launching of cruise missiles against targets in Afghanistan.

The official suspension of negotiations with the Taliban was announced by Unocal in August 1998 in the immediate wake of the punitive actions against Afghanistan and Sudan, ordered by President Clinton. Whether the 1997 takeover of Bridas by Amoco and the subsequent merger of BP-Amoco (also in August 1998) had a bearing on Unocal's decision remains unclear. Nonetheless, "the Big Game" had evolved: Unocal was now competing against the world's largest oil company, BP-Amoco.

The Texas Court Case: BP-Amoco (Bridas) versus Unocal

Two months later in this evolving saga, in October 1998, a Texas court dismissed the (formerly Argentinian-owned) Bridas' US$15 billion lawsuit against Unocal "for preventing them developing gas fields in Turkmenistan".(16) It turned out that the court ruling was in fact against Bridas'parent company, BP-Amoco, which had, a year earlier, acquired a controlling stake in Bridas.

In all likelihood, there was a mutual understanding between Unocal and BP-Amoco, which are consortium partners in the Caspian Sea basin. Moreover, while Zbigniew Brzezinski, a former National Security Adviser (in a Democratic administration), was acting as a consultant for Amoco, Henry Kissinger, a former Secretary of State (in a Republican administration), was advising Unocal Corporation.

The acquisition of Bridas by BP-Amoco suggests that BP will, in all likelihood, be a major player in future pipeline negotiations, most probably in an agreement with Unocal.

Unocal Withdraws But Only Temporarily

While Unocal had formally withdrawn from the CentGas consortium in the wake of the cruise missile attacks on Afghanistan and the Sudan, BP-Amoco's subsidiary, Pan American Energy, (the successor company to Bridas), continued to actively negotiate with Afghan, Russian, Turkmen and Kazakh officials regarding the trans-Afghan pipeline project.

Meanwhile, a turnaround had occurred in US foreign policy under the Clinton administration towards Bridas: No more dirty tricks against a company which is now owned by one of America's largest oil conglomerates! Visibly, in the last two years of the Clinton administration, Unocal's rival in the pipeline negotiations, BP-Amoco, had the upper hand.

Despite Unocal's temporary withdrawal, the CentGas consortium was not disbanded. Unocal's partner, Delta Oil Corporation of Saudi Arabia, in CentGas continued to negotiate with the Taliban.

George W. Bush Enters the White House

The evolving pipeline saga gained a new momentum upon George W. Bush's accession to the White House in January 2001.

At the very outset of the Bush administration, Unocal (which had withdrawn in 1998 from pipeline negotiations under the Clinton administration) reintegrated the CentGas Consortium and resumed its talks with the Taliban (in January 2001), with the firm backing, this time, of senior officials of the Bush administration, including Deputy Secretary of State, Richard Armitage. Dick Armitage had previously been a lobbyist for Unocal in the Burma/Myanmar Forum, which is a Washington-based group funded by Unocal.(17)

These negotiations with the Taliban occurred only a few months before the September 11 attacks:
Laila Helms [daughter of Senator Jesse Helms], who was hired as the public relations agent for the Taliban government, brought Rahmatullah Hashimi, an advisor to Mullah Omar, to Washington as recently as March 2001. Helms was uniquely positioned for the job through her association with her uncle Richard Helms, former chief of the CIA and former Ambassador to Iran. One of the negotiating meetings was held just one month before September 11, on August 2, when Christina Rocca, in charge of Asian Affairs at the State Department, met Taliban Ambassador to Pakistan, Abdul Salem Zaef, in Islamabad.

Rocca has had extensive connections with Afghanistan, including supervising the delivery of Stinger missiles to the Mujahideen in the 1980s. At the CIA, she had been in charge of contacts with Islamist fundamentalist guerrilla groups.(18)

Unocal 'Appoints'Interim Government in Kabul

In the wake of the bombing of Afghanistan, the Bush administration designated Hamid Karzai as head of the interim government in Kabul. While highlighting Karzai's patriotic struggle against the Taliban, what the media failed to mention is that Karzai had collaborated with the Taliban government. He had also been on Unocal's payroll.

In fact, since the mid-1990s, Hamid Karzai, who later became President, had acted as a consultant and lobbyist for Unocal in negotiations with the Taliban. His appointment-visibly on behalf of the US oil giants-had been casually rubber-stamped by the "international community" at the November 2001 Bonn conference, held under UN auspices.

According to the Saudi newspaper Al-Watan:

Karzai has been a Central Intelligence Agency covert operator since the 1980s. He collaborated with the CIA in funneling US aid to the Taliban as of 1994 "when the Americans had-secretly and through the Pakistanis [specifically the ISI]-supported the Taliban's assumption of power."(19)
"Coincidentally, President Bush's Special Envoy to Kabul, Zalmay Khalizad, had also worked for Unocal. He had drawn up the risk analysis for the pipeline in 1997, lobbied for the Taliban and took part in negotiations with them."(20) Khalizad had occupied the position of Special Advisor to the State Department during the Reagan administration,"lobbying successfully for accelerated US military aid to the Mujahideen".

He later became Undersecretary of Defense in the Bush Senior Cabinet.(21) When George W. was inaugurated in January 2001, Khalizad was appointed to the National Security Council. While Clinton's foreign policy had provided support to US oil interests in Central Asia, under the Republicans oil company officials were brought into the inner sphere of political decision-making.

The 'Reconstruction'of Afghanistan

Washington had set the stage. According to a World Bank representative in Kabul, "reconstruction in Afghanistan [was] going to open up a whole range of opportunities."(22)

Two days after the bombing of Afghanistan commenced, on October 9, the US Ambassador to Pakistan, Wendy Chamberlain, met with Pakistani officials regarding the trans-Afghan pipeline. The pipeline, according to the report, was slated to "open up new avenues of multi-dimensional regional cooperation, particularly in light of recent geopolitical developments [bombing of Afghanistan] in the region".(23)

With Afghanistan under US military occupation, the role of Hamid Karzai as the country's President is to "broker" the pipeline deal on behalf of the Anglo-American oil giants with the firm backing of the Bush administration.

In the immediate wake of the October 2001 bombing raids, the media reported that "two small companies", Chase Energy and Caspian Energy Consulting (acting on behalf of major oil interests), had contacts with the governments of Turkmenistan and Pakistan to revive the pipeline deal. While the identity of the oil companies behind these "small firms" was not mentioned, it just so happens that the President of Caspian Sea Consulting, S. Rob Sobhani, had been a consultant to BP-Amoco in Central Asia. Sobhani also sits on the Council of Foreign Relations'"Caspian Sea Discourse", together with representatives of major oil companies, the George Soros Open Society Institute, the CIA and the Heritage Foundation (a Republican party think tank).

According to S. Rob Sobhani:

It is absolutely essential that the US make the pipeline the centerpiece of rebuilding Afghanistan.... The State Department thinks it's a great idea, too. Routing the gas through Iran would be avoided, and the Central Asian republics wouldn't have to ship through Russian pipelines.(24)

According to Joseph Noemi, CEO of Chase Energy, September 11, and the "War on Terrorism" are a blessing in disguise for Afghanistan:

If the United States'presence continues in the region, [September 11] is probably the best thing that could have happened here for the Central Asian republics … . This region, in terms of oil economics, is the frontier for this century … and Afghanistan is part and parcel of this.25

Notes:

1. Knight Ridder News, 31 October 2001.

2. Jim Crogan, "The Oil War", LA Weekly, 30 November 2001.

3. Ibid.

4. Ted Rall, "It's About Oil", San Francisco Chronicle, 2 November 2001, p. A25.

5. Ishtiaq Ahmad, "How America Courted Taliban", Pakistan Observer, 20 October 2001.

6. John Pilger, "This War is a Fraud", Daily Mirror, 29 October 2001.

7. Jim Crogan, "Pipeline Payoff to Afghanistan War", California CrimeTimes, November 2001, http://www.californiacrimetimes.com/. See also Jim Crogan, "The Oil War: Unocal's once-grand plan for Afghan pipelines", LA Weekly, 30 November-6 December 2001.

8. US Congress, Hearing on US Interests in the Central Asian Republics, House of Representatives, Subcommittee on Asia and the Pacific, Committee on International Relations, Washington, DC, http://commdocs.house.gov/ committees/intlrel/hfa48119.000/hfa48119_0f.htm.
See Karen Talbot,"US Energy Giant Unocal Appoints Interim Government in Kabul", Global Outlook, No. 1, Spring 2002, p. 70.

10. "Timeline of Competition Between Unocal and Bridas", World Press Review, December 2001, www.worldpress.org.

11. Ibid.

12. Ibid.

13. Alexander Gas and Oil Connections, http://www.gasandoil.com/goc/com-pany/cnc75005.htm, 12 August 1997.

14. Larry Chin, "Unocal and the Afghanistan Pipeline", Online Journal, 6 March 2002, Centre for Research on Globalization (CRG), http://www.globalresearch.ca/ articles/CHI203A.html, 6 March 2002.

15. Ibid.

16. Timeline, op. cit.

17. Larry Chin, op. cit.

18. See Karen Talbot, "US Energy Giant Unocal Appoints Interim Government in Kabul", Global Outlook, No. 1, Spring 2002. p. 70.

19. Karen Talbot, op. cit. and BBC Monitoring Service, 15 December 2001.

20. Karen Talbot, op. cit.

21. Patrick Martin,"Unocal Advisor Named Representative to Afghanistan", World Socialist Web Site, 3 January 2002.

22. Statement of William Byrd, World Bank Acting Country Manager for Afghanistan, 27 November 2001.

23. Quoted in Larry Chin, "The Bush administration's Afghan Carpet", Centre for Research on Globalization (CRG), http://www.globalresearch.ca/articles/ CHI203B.html, 13 March 2002.

24. Daniel Fisher, "Kabuled Together", Forbes Online, 4 February 2002,
http://www.forbes.com.

25. Knight Ridder News, 30 October 2001.