Publication: Monitor Volume: 4 Issue: 225

The California-based UNOCAL Corporation has withdrawn from projects, worth an estimated US$8 billion, to lay gas and oil pipelines from Turkmenistan via Afghanistan to Pakistani ports on the Indian Ocean. The company also closed its offices in three out of four Caspian and Central Asian countries, thus becoming the first of the oil and gas giants to disengage from the region. Company officials, confirming these decisions, cited the decline of oil prices as their primary reason.

Politics in the region and in the United States also hamstrung the projects, however. Following the U.S. missile strikes last August against suspected camps of terrorist Osama bin Laden, UNOCAL suspended the trans-Afghan project and decided to wait until the United States recognizes the Afghan government. UNOCAL also came under fire from U.S. feminist groups and media figures, who objected to the company’s dealings with the Taliban authorities regarding rights of way and security guarantees for the pipelines. The Afghan clients of Iran had seemed poised to thwart the projects before the Taliban prevailed with Pakistani support. Yet the Talibs’ treatment of women came to overshadow all other considerations in U.S. public relations battles over the projects.

UNOCAL’s pullout would seem to doom the prospects of exporting Turkmen and Kazakh oil and gas to South Asian markets. It leaves Turkmenistan with one viable option–a trans-Caspian corridor for oil and gas pipelines that would branch into the Baku-Ceyhan Main Export Pipeline (Western agencies, December 5).

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