Rice tour raises China's energy
hackles By Fong Tak-ho
HONG KONG - Between October 11 and 13, US
Secretary of State Condoleezza Rice made a brisk
tour of five "stans": Kyrgyzstan, Afghanistan,
Pakistan, Kazakhstan and Tajikistan. Analysts say
that one key purpose of the journey was to
strengthen US influence on Central Asia,
especially with regard to energy security.
The backdrop to Rice's visit was the
subtle oil competition between Beijing and
Washington. On May 17, 2004, China National
Petroleum Corporation (CNPC) struck an agreement
with KazMunaiGaz, a Kazakh state-owned oil
conglomerate, that the two parties would cooperate
in building a US$3 billion pipeline connecting
western Kazakhstan's Atyrau, near the Caspian Sea,
with
China's northwestern Xinjiang province. Stretching
more than 3,000km, the conduit will channel to
China some 20 million tons of oil annually when it
is completed by the end of 2005.
This
pipeline, coupled with a Kazakh-Iran line now
being planned, will constitute the mainstay of a
"pan-Asia continental oil pipeline network", which
refers to a gas and oil conduit network linking
Asia's major energy consumers, including China,
Japan and South Korea, to Central Asian oil
suppliers. Geographically, China sits right at the
hub of the network. This pan-Asia pipeline
network, if it materializes, has the potential to
change Asian geopolitics dramatically. One
scenario, which is actually unlikely but terribly
upsetting to the White House nonetheless, is that
the proposed network would bring Beijing closer to
Tokyo and Seoul, while Washington would see a
reduction in its influence over key Asian allies
Japan and South Korea.
Recent events
indicate that China's plans are making progress.
On October 18, CNPC reported that it had reached a
deal with the Kazakh government over its plans to
take over the Canadian firm, PetroKazakhstan. The
Kazakh government had objected to CNPC taking
control of all of PetroKazakhstan's assets, and
reports in mid-October said that CNPC was
negotiating an agreement that would give the
government a partial stake. However, a
PetroKazakhstan shareholder vote on October 18
approved the CNPC takeover with 99% of
shareholders voting in favor.
After Rice's
departure, Kazakh Energy Minister Vladimir
Shkolnik claimed that Beijing failed to notify the
Kazakh government beforehand of CNPC's plan to
purchase PetroKazakhstan. Of course, just because
Shkolnik's remarks occurred after Rice's visit
does not mean that the latter caused the former.
In fact, there is evidence that Kazakh government
wariness of the CNPC deal predated the Rice's tour
of the country; for example, a law recently
enacted by the Kazakh Senate before the visit
empowered the government to terminate business
deals involving state energy assets. In his
statement, Shkolnik speculated, incorrectly as it
turned out, that even though the board of
PetroKazakhstan had ratified the purchase valued
at US$4 billion, the October 18 shareholder vote
might alter the result.
Since the
September 11, 2001 attacks, US interest in Central
Asia increased due to the need to maintain
military pressure on Islamic extremists,
especially in Afghanistan and Pakistan. Starting
in December 2001, the Pentagon set up the Ganci
Air Base at Manas International Airport near
Bishkek, Kyrgyzstan, the largest such base in
Central Asia. Ganci Air Base (named after New York
City Fire Department chief Peter J Ganci, who
perished September 11), is able to host some 3,000
soldiers and park a variety of fighter, transport,
and tanker aircraft. At various times, troops from
South Korea, the Netherlands, Denmark, Australia,
Norway and Spain have occupied the base, and
presently, about 1,000 soldiers and airmen from
the US, Spain and France are stationed there. The
Tajikistan government would not discuss withdrawal
of the US troops with the visiting US secretary of
state, according to a public affairs officer.
In addition to anti-terrorist efforts,
Rice has found another seemingly righteous reason
to continue the US military presence in Central
Asia, and that is to help the young democratic
countries in the region safeguard democracy. But
this additional justification has aroused further
opposition from both Russia and China, one of
which is widely considered to be backsliding from
liberal democracy and the other vehemently opposed
to it.
In March, an ex-chief of the Soviet
Foreign Intelligence Service, Leonid Shebarshin, a
veteran lieutenant general of the Red Army which
enforced Russian domination of the ethnically
distinct Central Asian states for 71 years,
suggested that US attacks on Iraq and Afghanistan
were invasions under the guise of
counter-terrorism and served Washington's
so-called "hegemony strategy" as well as the
scramble against China for energy in the Middle
East and Central Asia. In China, a report
published in late May by the party mouthpiece,
People's Daily, offered further allegations as to
the motives for the US presence: "Washington is
speedily shifting its strategic focus onto guns
and oil. Guns not only protect the pro-US
governments and fight armed activists [sic], but
also secure oil production. Obviously, the US
seeks to reduce reliance on the Persian Gulf [oil]
supply by taking control of the oil-rich Middle
East and Central Asia, and meanwhile lead [the]
Caucasus and Central Asia out of poverty and
instability." Meanwhile, an Afghan government
official on a trip to Beijing, Deputy Defense
Minister Lieutenant General Hamayun Fauzi, was
promised $US2 million worth of military equipment,
and said after meeting Chinese officials that
"China [wants] to play a role in fighting
terrorism."
The People's Daily depicted US
oil firm Chevron as the vanguard of Washington's
global oil strategy (naively assuming that US oil
companies are directly controlled by the
government in the same way that mainland Chinese
ones are). Back in 1993, Chevron succeeded in
buying Kazakhstan's Tengiz oilfield with estimated
reserves of 6 to 9 billion barrels. Earlier this
year, it defeated China National Offshore Oil
Corporation (CNOOC) in a widely publicized
takeover battle for California-based Unocal. The
fact that Rice once served as a director of
Chevron has raised many
eyebrows.
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