Monday, September 04, 2006

[oil and gas] afghanistan stymied by uprising

Stay with this one. This is how a nation’s fortunes can be dashed by local issues.

Anti-government violence in Pakistan has followed the killing of a tribal leader by the military. On Tuesday, explosions and gunfire were reported after more than 10,000 people attended memorial prayers for Nawab Akbar Bugti, who was fighting for greater autonomy for his gas-rich but underdeveloped province of Balochistan. Pakistani government helicopter gunships and ground troops attacked his mountain cave hide-out.

With about 6 million people, Balochistan's population is almost half that of Pakistan's biggest city, Karachi. But in terms of mineral wealth it is the country's richest region. Islamabad has been planning a deep-sea port at Gwadar and a road link through Afghanistan to Central Asia from the province.

The TAP, which would carry natural gas from Turkmenistan to India through western Afghanistan, would pass through Balochistan. An alternative route through Pakistan's North West has been threatened by the resurgence of the Taliban.

The 2,000km pipeline deal was in the final stages of approval with the Asian Development Bank (ADB), and without the huge India market, the project, which is estimated to cost US$2-3 billion [one estimate pitches the final cost at $7 billion], may not be profitable.

But domestic security concerns in Afghanistan and Pakistan and an armed uprising led to the setting up of a force of trained and semi-trained tribesmen known as the Balochistan Liberation Army (BLA). Pakistani authorities have maintained that Bugti tacitly supported both these forces and the unrest.

Pakistan's Human Rights Commission has documented widespread violations by security forces but Islamabad says they were required to secure domestic gas installations.

Last week, a top Indian official in Delhi confirmed the participation of a high-level team in the TAP meeting next month as a partner-in-the-project and yet India seems to have got cold feet over the violence; political commentators speculate that it may be strong opposition from the United States that has made India put the deal on the back-burner.

Due to its location between the oil and natural gas reserves of the Caspian Basin and the Indian Ocean, Afghanistan has long been a potential energy transit corridor. During the mid-1990s, US-based Unocal had pursued a possible natural gas pipeline from Turkmenistan's Dauletabad-Donmez gas basin via Afghanistan to Pakistan, but pulled out after the US missile strikes against Afghanistan in August 1998.

Thus, the stirring up of local unrest threatens the prosperity of three nations and maybe even four.

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