At Play in the Oil Fields of Central Asia

by Jeff Lumpkin

I saw the salesman from across the room. Inevitably, he wanted to talk to me. At least 6'4", he was big, and made even more imposing by his Stetson hat and lizard-skin boots. He was from Texas, a-coming to supply the West-Kazak oil fields. Before I could duck away, he had cornered me. Like hundreds of others, he was in Almaty to get of piece of the action, to join Chevron, Mobil, Hurricane Hydrocarbons and others in extracting and shipping oil and natural gas from Central Asia to Europe, the Far East and the United States. Over the previous days, I had met literally dozens like him, trying to sell washover swivels, process control solutions, drilling fluid additives, downhole electronic pressure/temperature gauges and computerized mud logging. Unfortunately, I didn't have any idea what they were talking about.

For the second summer in a row I found myself working at Chevron Munaigas Inc., the Almaty-based subsidiary of Chevron International Petroleum charged with maintaining and enhancing relations with the Kazak government, as well as public relations, information gathering and new business development. Due to a dearth of real oil men in Almaty, I had been placed in charge of Chevron's exhibit at the Kazakstan International Oil and Gas Exhibition (KIOGE). This meant that I had to answer questions about Chevron's operations in Kazakstan, provide information to potential equipment/service providers and establish contacts with representatives of other oil companies operating in Kazakstan. It was a job for which, by and large, I was eminently unqualified.

For the most part, I found it very frustrating. The real oilmen quickly discovered my ignorance and stalked off, I'm sure shaking their heads that Chevron would place such an ignoramus in charge of their exhibit. There was, however, one aspect of KIOGE that was fascinating: talking with the major oil companies about their plans for shipping oil and gas from Central Asia to foreign markets. This problem, how to get oil from land-locked Central Asia, was the key to unlocking the vast wealth of Turkmenistan, Uzbekistan and Kazakstan. The export routes, and pertinent agreements, had great importance for the profitability of companies like Chevron, the economies of Russia and the Central Asian states and, arguably, the course of democratic reform in the former Soviet Union.

Since April 1993, when Chevron began operations at the Tengiz oilfield in western Kazakstan, the Russian Federation has actively sought to maintain control of oil exports from Central Asia. At present, these routes all go through southern Russia to the Black Sea port of Novorossiysk or farther north to central Russia. As part of their efforts to maintain control of oil exports, the Russians have blocked plans to construct pipelines through Azerbaijan and Georgia, or Azerbaijan and Armenia to Turkey. Kazak access to pipelines has been restricted in favor of Russian oil, and routes through Iran blocked by U.S. diplomatic efforts. The end result is that oil and gas profits from Central Asian fields are far below what was expected. Oil companies have been forced to curtail further investment and, simultaneously, they have been compelled to search out export routes that avoid Russia.

One of the most fascinating pipeline proposals is advocated by Unocal. In conjunction with the government of Turkmenistan and a Saudi Arabian oil company, Delta Oil, Unocal is proposing to build a pipeline from Charjou, Turkmenistan, through Afghanistan to Karachi, Pakistan. I first became aware of this proposal while working at KIOGE and was incredulous that it could be considered. At that time, in early October, the Taliban, one of the three major factions fighting to rule Afghanistan, were besieging Kabul. It appeared that they would gain control of much of the country. That Unocal deemed it possible to build a pipeline through a war zone, or through a Taliban-controlled Afghanistan, seemed unlikely to me. During a free moment, I walked over to Unocal's exhibition to find out more. A Unocal representative was, not unexpectedly, quite excited about the whole project. Echoing a Unocal pamphlet, he said that a pipeline to the Arabian Sea was the most expeditious route for Central Asia's oil. When I asked him about the war raging in Afghanistan, he said, "That's no problem, we've got deals with all the warlords." "Really?" I asked, astounded. "Yes," he replied, "they're very reasonable when it comes to money."

Questioned about Taliban, he was quite voluble in assuring me that only good could come of a successful offensive. Taliban would bring stability to the country and provide the law and order necessary to build a pipeline. I stared at him in wonder. Evidently, at Unocal they didn't understand much about the Taliban or the fear it inspired in Central Asia. To publicly announce that Taliban's successes were a positive development seemed at best ill-advised. At worst, I thought that Unocal was jeopardizing its position in Central Asia by siding with a political movement so threatening to the nearby republics.

This statement was repeated by a Unocal vice-president, Chris Taggart, who was quoted in Trud as saying, "If Taliban stabilizes the situation in Afghanistan and can gain international recognition, the possibilities of constructing a pipeline will be significantly improved."1 Local journalists soon began speculating on U.S. involvement with Taliban. According to these reporters, the U.S., via Pakistan, has supplied Taliban with money and arms, including tanks and aircraft. The supposed purpose of such support was threefold: to facilitate construction of Unocal's pipeline, to halt drug trafficking originating in Afghanistan, and to reduce Russian and Iranian influence in the region.

While the U.S. denies direct support of the movement, American officials have admitted to conducting talks with Taliban leaders. In addition, statements by State Department personnel reveal a perception that the U.S. could work with Taliban in halting heroin shipments and combatting terrorist networks currently active in Afghanistan. Such hopes appeared naive to many, especially observers in Russia who see American involvement in Afghanistan as inimical to Russian political and economic interests. Echoing Russian fears, a reporter for Delovaya Nedelya wrote, "It should be noted that the increasing tension on Afghanistan's northern border is n the interest of a few states in the West."2

As I read all these articles, I was pleased that, during my initial conversation with the Unocal representative, I had anticipated many of the reactions that appeared in the press. However, the full importance of Unocal's statements did not really strike me until some weeks later, in Tajikistan. In the company of two American scholars from Almaty, I flew to Dushanbe to observe a conference on democracy hosted by the Tajik Academy of Sciences. Perhaps unsurprisingly, I was drafted to give a talk. For the first time, I stood up in front of an audience and, in Russian, gave my opinion on, as suggested by my hosts, "The American View of the Russian Presence in Central Asia." After 15 minutes of halting oratory, I began taking questions from the audience. The first of these came from an Iranian political scientist, who wanted to know why America was supporting a fundamentalist Islamic movement like Taliban, while maintaining such tight sanctions on Iran. It seemed to him a bit hypocritical. Soon, I found myself embroiled in a debate about America's foreign policy goals in Central Asia which, to the audience, seemed to hinge on U.S. oil interests.

For much of the discussion, I felt myself to be on the defensive. Many of the questions I simply could not answer, lacking detailed knowledge about American relations with Taliban. While it seemed inconceivable to me that the U.S. would suppport such an extreme movement, I too had read reports of American consultations with Taliban leaders and could readily understand local perceptions of American financial and military support. On the other hand, the interchange with academics from all over Central Asia, including Afghanistan, Iran, and Russia gave me a new perspective on America's role Eurasia as well as the impact that seemingly harmless statements can have on international relations.

Jeff Lumpkin is a second year graduate student in REECAS focusing on Central Asia.

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1 "Neft' Paxnet Krob'yu," Trud, No. 195 (22698), 29 October 1997, pg. 4. "Esli Taliby stabiliziruyut obstanovky i poluchat mezhdynarodnoe priznanie, to perspektivy stroitel'stva tryboprovodov znachitel'no uluchshatsia."

2 Berik Kenesov, "Taliby i Presidenty," Delovaia Nedelia, vol. 39 (n. 217), 11 October 1996, pg. 9. "Nado otmetit', chto namechayushchaiasaia napriazhennost' na severnoi granitse Afganistana v interesakh nekotorykh gosydarstv na Zapade."