"You've Got to Go Where the Oil Is"

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In 1998, attending the Panhandle Producers and Royalty Owners Association annual meeting at Amarillo, TX, Dick Cheney, then CEO of Halliburton Co., assured the local Globe and News that despite its merger with petroleum processing company Dresser, Halliburton would still have an interest in older domestic oil fields, such as those in Texas. The real hot spots, though, Cheney admitted were the reserves in the Caspian Sea region, including former Soviet states Azerbaijan, Kazakhstan and Turkmenistan. "These countries' economic success and survival depends upon these reserves," he said. At the time, reserves in the region were estimated as 200 billion barrels of oil and natural gas. Both Russia and the U.S had an interest in the construction of a pipeline that would route the oil to a port from which it could be shipped to the Mediterranean and Western Europe without passing through Iran. Brushing aside concerns about volatility in the region, Cheney, who served on the 12-man Kazakhstan Oil Advisory Board added, "You've got to go where the oil is.... I don't worry about it a lot."

Earlier that year, on February 12, Unocal's Vice President of International Relations, Joseph Maresca, testified before the House Committee On International Relations Subcommittee On Asia And The Pacific. Maresca asserted that western companies could extract approximately 4.5 million barrels of oil per day from the Caspian Sea region. "One major problem has yet to be resolved: how to get the region's vast energy resources to the markets where they are needed. There are few, if any, other areas of the world where there can be such a dramatic increase in the supply of oil and gas to the world market. The solution seems simple: build a 'new' Silk Road. Implementing this solution, however, is far from simple. The risks are high, but so are the rewards." He then outlined how pipeline projects underway leading to the Black Sea ports of Novorossik and Supsa would be inadequate to transport the anticipated volume of oil. Arguing that both Western Europe and Asia are likely markets for this oil, that a pipeline to China would be prohibitively long, and rejecting a pipeline through Iran because of U.S. sanctions, he concluded,

The only other possible route option is across Afghanistan, which has its own unique challenges.... The country has been involved in bitter warfare for almost two decades. The territory across which the pipeline would extend is controlled by the Taliban, an Islamic movement that is not recognized as a government by most other nations. From the outset, we have made it clear that construction of our proposed pipeline cannot begin until a recognized government is in place that has the confidence of governments, lenders and our company.

Six years earlier, an Argentinean company, Bridas, had begun to develop oil reserves in Turkmenistan, under an agreement with the government. Project plans included a pipeline from Turkmenistan through Afghanistan to Pakistan. When the Bridas venture began producing natural gas, big oil companies took notice. Subsequently despite the agreement with Bridas, Unocal signed a separate agreement with the government of Turkmenistan, excluding Bridas. Benazir Bhutto, prime minister of Pakistan at the time, opposed the Unocal deal. The regime that followed her in Pakistan supported Unocal, however. Bridas took its claims to the International Chamber of Commerce, which ruled that Turkmenistan had no basis on which to void the Bridas deal. This did not resolve the issue, however, and both sides began to jockey for support from Saudi Arabia.

After the fall of the communist regime in Kabul in 1992, many inside Afghanistan and out held out the hope that the Taliban movement in Afghanistan would bring an end to the warring factions and restore peace to the country. Bridas gained the services of the head of Saudi intelligence, Prince Turki Faisal who was influential with the Taliban. Unocal entered into a cooperative venture with Saudi Delta Oil, which also had ties to the movement.

As Ahmed Rashid wrote in Taliban: Islam, Oil and the New Great Game in Central Asia , excerpted in Far Eastern Economic Review,

The US and Unocal wanted to believe that the Taliban would win and went along with Pakistan's analysis that they would. The most naive US policy-makers hoped that the Taliban would emulate US-Saudi relations in the 1920's. 'The Taliban will probably develop like the Saudis did. There will be Aramco, pipelines, an emir, no parliament and lots of Sharia law. We can live with that,' said one US diplomat. Given their suspicions, it was not unexpected that the anti-Taliban alliance, Iran and Russia, should view the Unocal project as an arm of US-CIA foreign policy and as the key to US support for the Taliban.

. . . It was in the interests of Iran and Russia to keep the region unstable by arming the anti-Taliban alliance, so that US pipeline plans could never succeed. Even today the USA is muddled on the critical question of whether it wants to save Central Asia's depressed economies by letting them export energy any way they like or to keep Iran and Russia under blockade as far as pipelines are concerned.

In addition to leveraging the Saudi connection to the Taliban, Unocal also employed former U.S. Ambassador to Pakistan, Robert Oakley, who had played a key role in funneling U.S. aid to the Afghan Mujahiddin in their war against the Soviets in the 1980s. Oakley was no stranger to creative approaches to promoting U.S. interests in the region. During the Reagan administration he had served as head of the State Department's counterterrorism office. In that role, he was, as recounted in the report by Iran-Contra independent counsel Lawrence Walsh, one of "nine senior officials -- Shultz, Whitehead, Armacost, Platt, Hill, Murphy, Raphel, Oakley and Borg -- together with a very few assistants, [who] appear to have been the only State Department officials with significant contemporaneous knowledge of U.S. and Israeli contacts with Iranians and arms shipments to Iran during 1985 and 1986. Among that group, Armacost, Raphel and Oakley constituted what one participant called a 'floating directorate' that monitored this activity, principally through contacts outside the department, and reported any significant developments to Shultz...."

The Walsh report cites several instances in which Oakley communicated with North, and subsequently informed others in the State Department, often through M. Charles Hill who was Secretary of State Shultz's executive assistant. These include acknowledgement of the shipment of Israeli TOW missiles to Iran on September 14, 1985, after which hostage Rev. Benjamin Weir was released.

The independent counsel report "concluded that Shultz's testimony was incorrect, if not false, in significant respects and misleading, if literally true, in others, and that information had been withheld from investigators by Shultz's executive assistant, M. Charles Hill." Walsh ultimately decided against prosecuting Hill, however, concluding that doing so would reveal little more than what was already known from his notes. Moreover, he judged that it could not be determined that Shultz willfully falsified testimony, so did not prosecute him, either.

Another Iran-Contra player who figures in the present discussion is Richard Armitage. Armitage, now Deputy Secretary of State, -- as his official State Department biography states -- "(with the personal rank of Ambassador) directed U.S. assistance to the new independent states (NIS) of the former Soviet Union." These include the states surrounding Afghanistan: Tajikistan, Uzbekistan, and Kyrghistan, among others. In the Reagan administration, Armitage served as Assistant Secretary of Defense for International Security Affairs. Per his official biography, "He represented the Department of Defense in developing politico-military relationships and initiatives throughout the world, spearheaded U.S. Pacific security policy, including the U.S.-Japan and U.S.-China security relationships, managed all DoD security assistance programs, and provided oversight of policies related to the law of the sea, U.S. special operations, and counter-terrorism. He played a leading role in Middle East Security Policies."

Armitage was one of a handful of officials who accompanied then CIA Director William Casey during his testimony before the congressional Select Committees on Intelligence concerning the Iran-Contra matter. Independent prosecutor Walsh concluded, "The evidence suggests a concerted effort by CIA officials to withhold information from or lie to Congress about the November 1985 shipment of HAWK missiles to Iran. The available evidence could not, however, prove beyond a reasonable doubt that concerted action by CIA officials violated federal laws in responding to congressional inquiries about the November 1985 shipment. The primary reason was that crucial witnesses to the events surrounding the Agency's responses in November 1986 were unavailable in 1991: [Director of Operations] Clair George was under indictment for false statements and perjury; [his special assistant] Gardner had invoked his Fifth Amendment privilege against self-incrimination and had refused to give Independent Counsel a proffer; and Casey was dead."

Like Oakley, Armitage also has ties to Unocal. In 1997 he traveled to Burma (Myanmar) on behalf of the Burma/Myanmar Forum -- a recently defunct Washington group that received major funding from Unocal. Burmese villagers who lived near a pipeline Unocal was building in cooperation with the Burmese military are suing Unocal in California state court. The suit, which a California superior court judge recently ruled can go forward despite Unocal's attempts to have it thrown out, alleges that villagers were forced to work on the pipeline, and suffered numerous abuses while the military was allegedly ensuring the security of the project. Allegations include assault, and the murder of an infant by kicking it into a fire. A lawyer for the plaintiffs in the Unocal suit said, "Unocal allowed the Burmese military to build pipeline infrastructure and provide security despite knowing it would commit abuses. For that, it is clearly liable under California law." Presumably this raises the question of whether, having supported the Taliban, Unocal could also be sued for abuses against Afghanis.

Cheney's Halliburton performed contract work on the Burma pipeline, as well, according to the Multinational Monitor. Halliburton reportedly had an office in Rangoon by 1990, and was involved in early work on the pipeline. In 1997 a joint venture of Halliburton and Italian firm Sapiem were contracted to lay the 350-kilometer offshore portion of the pipeline, and a Halliburton subsidiary supplied some materials for an onshore section in 1998. Adding to its government connections, in 1998 Unocal appointed Donald B. Rice to its board of directors. Rice served as Secretary of the Air Force in the Bush (Sr.) administration.

One week after the terrorist attacks of September 11, 2001, Richard Armitage was dispatched to Russia. Meeting primarily with Vyacheslav Trubnikov, a senior deputy foreign minister and former head of the Kremlin's Foreign Intelligence Service, Armitage reportedly shared initial findings in the investigation of the attacks, outlined the current level of planning for a response, and indicated some "specific sorts of things that could be useful." The meeting was apparently a continuation of a session held in May, described as a "U.S.-Russian working group on Afghanistan established during the final year of the Clinton administration." There is evidence that at least two items reported by the Washington Post as having been discussed in September, in fact referred to pre-existing initiatives: exchange of intelligence about the al Qaeda network, and dispatching U.S. troops to Uzbekistan and Tajikistan.

The October 5 issues of Jane's Intelligence Digest reported that Moscow's Permanent Mission at the U.N. passed what is referred to as "an astonishingly detailed report" to the U.N. Security Council, and Secretary General Kofi Annan, in March 2001. According to Jane's, the report included "explicit intelligence concerning 55 alleged al-Qa ’eda bases and offices located throughout the areas of the country controlled by the regime in Kabul," as well as information on dozens of Pakistani officers allegedly connected to bin Laden's organization at the time. The report also is said to have included information about the seven top Taliban leaders who allegedly control the narcotics trade in Afghanistan. Other information in the report identifies six Pakistani officers who allegedly hold senior positions within the Taliban military and security apparatus – including its head of intelligence," and 16 examples of regular units of Pakistani armed forces based in Afghanistan. Jane's notes that, unlike the U.S., Russia had a well-trained group of locally-recruited Pashto-speaking agents in the area, and retained an interest in Afghanistan following the break-up of the former Soviet Union. According to Jane's diplomatic sources, the intelligence was not acted upon out of concern that it would interfere with U.S. efforts to broker a settlement between Israel and the Palestinian National Authority, and that a pre-emptive attack would encourage support for bin Laden. There was apparently also a concern that "US allies in the region, notably Saudi Arabia, would object to the use of military action against a regime that they recognised diplomatically."

The second item of old business in the Armitage-Trubnikov discussions was the deployment of U.S. security forces in Uzbekistan. Uzbekistan has long been regarded as the most independent of the five former Soviet republics in Central Asia, having sought friendly relations with the U.S. over Russian objections, and withdrawn from a Russian-sponsored regional security treaty. Uzbek presidential spokesman Rustam Jumaev told the Washington Post recently that intelligence cooperation had begun "two or three years" ago. That cooperation increased when former president Bill Clinton signed a secret intelligence "finding" in 1998 authorizing covert action against bin Laden. According to the Post, the relationship intensified after the bombings of U.S. embassies in Africa, and again after the attack on the USS Cole in Yemen. As of October 14, at least 1,000 troops from the 10th Mountain Division had arrived in Uzbekistan, with that many more expected to follow. An undisclosed number of Special Forces troops are acknowledged to be operating in Uzbekistan and Afghanistan, as well. Some observers have suggested that Special Forces troops may have been part of the ongoing covert operations. One such observer "[w]hile declining to discuss specific operations, ... said, 'It's spectacular how close Uzbek-U.S. foreign policy interests have come together. We've worked for a long time with Uzbekistan on Afghanistan issues, so it makes sense that we have very strong cooperation on the intelligence side as well.'"

In a report on Turkey's role in the Afghan conflict, Turkish oil analyst Tufan Erdogan, speaking to the Turkish Daily News in 1997 said that the bloodshed in Afghanistan was to clarify the world's energy map for the 21st century. He quotes a Russian official as saying, "Two capitalist tigers are trying to beat the other's head. Russia will fill the vacuum," and U.N. official as commenting
"Some states and oil companies have rented the Taleban for their interests."

Writing recently in The Village Voice, James Ridgeway echoes Erdogan's analysis, quoting a Russian news outlet's description of deals worked out before the start of the war. The independent states surrounding Afghanistan need stability there so that they can transport their oil independently. The paper suggests that, after the war, U.S. troops might be put to use building or providing security for an oil "pipeline carrying Caspian Sea oil to ports in Pakistan on the Arabian Sea...." Russia has reportedly completed talks on oil-revenue sharing with Tajikistan, and is in separate discussions with Uzbekistan. According to this source, Russia will be represented in Afghanistan by the Northern Alliance, while the U.S. will be represented by former king Zahir. Halliburton signed a contract with the State Oil Company of Azerbaijan to develop a 6000-square-meter marine base to support offshore oil construction in the Caspian Sea, according to a statement issued by the company on May 15 of this year. In this context, Erdogan's 1997 report seem prophetic. As Ridgeway says,

While the fighting in Afghanistan appears on the surface to hinge on issues of fundamentalism and American revenge, below the surface, strong economic currents are at work. At base, this war will be fought to set the boundaries of U.S. and Russian influence in Central Asia, a region previously dominated by the former Soviet Union, with strong influence from Iran and Pakistan. And it will carve up the oil and gas resources of the Caspian Sea.


References:

Oruc, Saadet "UNOCAL wants active involvement in Turkish gas pipeline " Turkish Daily News 30 Jun. 1997

"Unocal Looks To Afghanistan's Taliban For New Profits" Drillbits & Tailings 7 Aug. 1997

Rohloff, Greg "Cheney sees smooth road for merger; Caspian Sea region now hot spot for oil companies" Amarillo Globe-New 10 May 1998

"Unocal appoints James Crownover, Donald Rice to company board of directors" Unocal press release. 7 Dec. 1998

Walsh, Lawrence Final Report Of The Independent Counsel For Iran/contra Matters U.S. Government Printing Office. 4 Aug. 1993

Gershman, John "The George W. Bush Administration and East Asia" Foreign Policy In Focus

Stobdan, P. The Afghan Conflict and Regional Security Institute for Defense Studies and Analysis, India. Aug. 1999

"Court Allows Human Rights Suit Against Unocal to Go Forward" CorpWatch.org 4 Sep. 2001

Sipress, Alan "U.S., Russia Recast Their Relationship; Anti-Terror Agenda Appears To Be Framework for Future" Washington Post 4 Oct.2001

Standish, M.J.A., ed. "Russian files on al-Qa’eda ignored" Jane's Intelligence Digest 5 Oct. 2001

Ricks, Thomas E. and Susan B. Glasser "U.S. Operated Secret Alliance With Uzbekistan" Washington Post 14 Oct. 2001

Ridgeway, James "The God of Fossil Fuels" The Village Voice 10 Oct. 2001

Gray, Geoffrey "Dick Cheney's Pipe Dream" The Village Voice 19 Oct. 2001

Devraj, Ranjit "The oil behind Bush and Son's campaigns" Asia Times 6 Oct. 2001


Thanks to contributor Michael Carmichael for suggesting portions of this article.

For a polemical view of this issue in historical context, see Norman Livergood's The New U.S.-British Imperialism.

See also America's pipe dream by George Monbiot.