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Key Pipelines Must Wait For Peace...But Opium Just Keeps On Flowing (Int'l Edition)

International -- Spotlight on Afghanistan


Two brand-new oil and gas pipelines through Afghanistan's war zones? Don't laugh. They could be the nation's best hope for peace and prosperity. The proposed $8 billion project, a joint venture between U.S. petroleum giant Unocal Corp. and Saudi Arabia's Delta Oil, would stretch from the rich oil and natural-gas fields of Turkmenistan, across areas controlled by the Taliban--the fundamentalist militia that seized Kabul in September--and on to Pakistan and the Arabian Sea. The pipelines could yield tens of millions of dollars in fees and taxes for the warring factions--if they put down their arms, that is. "We're offering them an alternative to war," says Keith Lindsell, Unocal's exploration chief in Islamabad.

Let's hope money can buy a little love. The Taliban, who have imposed strict Islamic rule in two-thirds of Afghanistan, began an assault on Oct. 4 on the northern stronghold of Ahmad Shah Massood, the warlord who used to control Kabul. Elsewhere, U.N. diplomats were feverishly trying to broker a truce in the four-year-old civil war. Still, even before the Taliban took Kabul, about the only thing the factions agreed on were the pipelines. They've all signed accords supporting the project. "We welcome it," said Afghan President Burhanuddin Rabbani before he was ousted last month. "The important issue [now] is the fulfillment of the project."

That's easier said than done. Multilateral lending agencies and global banks are reluctant to commit funds until there is peace. And Unocal Vice-President Marty F. Miller recently told the U.S. Senate he's concerned that Iran, which wants to sell gas to Pakistan and has a competing pipeline in the works, will "promote conflict in order to advance their own economic interests." Still, senior Unocal execs in Islamabad hope the Taliban's grip on Afghanistan will bring stability.

Last year, Turkmenistan signed a deal green-lighting Unocal and Delta to supply Pakistan with gas from its Dauletabad field, the world's fifth-largest, with 50 trillion cubic feet of gas. The 1,271-kilometer gas pipeline will flow from Dauletabad to the Sui gas fields in southwestern Pakistan. The 1,900-kilometer oil pipeline will flow from Chardzhou in Turkmenistan to an offshore point near Karachi.

BOOMING MARKETS. Many players stand to gain from the pipelines. Turkmenistan, Kazakhstan, and other Central Asian nations for the first time would have direct access to the world's oil markets via the Arabian Sea. Above all, the pipeline would lessen reliance on Russia for their oil exports, expected to reach 5 million barrels a day by 2010.

Meanwhile, Afghanistan stands to receive infrastructure, jobs, and, perhaps, investor confidence. And Pakistan could fuel its rapidly growing energy market and earn millions in fees while gaining a major terminal to supply oil to the booming Far East. "[The project] is getting people to think about what Afghanistan could become in the future," says a U.S. diplomat in Islamabad. But all this, of course, depends on peace. Without it, the pipeline remains nothing but a pipe dream.

Afghanistan is already known for another kind of pipeline. For years, the nation's most lucrative product, opium, has flowed to the West. Camel trains loaded with opium trudge into Tajikistan; trucks with false fuel-tank compartments roar into Iran or Turkmenistan. Most of the opium is processed into heroin along the Afghan border or in Turkey. The U.N. Drug Control Program (UNDCP) estimates that 240 tons of heroin with a street value of $75 billion landed in the West last year from Afghanistan.

Virtually all the opium is grown in Taliban areas. Taliban leaders claim they'll hang traffickers, but U.S. satellite surveys show the illicit harvest is soaring in Taliban regions. Meanwhile, Western nations have shied away from sinking antidrug funds into Afghanistan's turmoil. Washington contributed just $715,000 for Afghan drug-control projects last fiscal year, compared with $35 million for Colombia. "What are we supposed to do if the international community doesn't support us?" says Anthony Buckingham, the UNDCP's Afghanistan director. "We need resources." So the West will likely see a lot more of this Afghan export.EDITED BY HARRY MAURER By Sudarsan Raghavan in KabulReturn to top

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