South Asia

Balochistan tribes threaten Pakistan's gas riches
By Syed Saleem Shahzad

KARACHI - At a time when the world's media are busy watching developments in Central Asia and the Middle East, a bitter struggle is taking place in the southern Pakistani province of Balochistan between local tribesmen opposed to Western companies exploiting natural gas reserves and the central government in Islamabad.

The issue came to a head recently, boiling over into a 10-day armed standoff between the Pakistani armed forces and the tribals. Dialogue has now resumed, but sources close to the tribal chiefs say that the most powerful chief and former chief minister of Balochistan, Nawab Akber Bugti, is not prepared to abandon his opposition to Western exploration companies operating in the province, fearing that they will ultimately take over control of his land.

The tribes in Balochistan have long agitated for autonomous status, or even an independent Balochistan state, and they happen to be located amid Pakistan's most plentiful gas reserves. A key deep-sea port is being developed with Chinese assistance at Gawadar in southwest Balochistan on the shores of the Arabian Sea. And to further add to the region's strategic value, important cross-national oil pipelines are planned to traverse the state.

Pakistan has 25.1 trillion cubic feet (Tcf) of proven gas reserves, and currently produces around 0.8 Tcf a year, all of which is consumed domestically. Natural gas producers include Pakistani state-owned companies Pakistan Petroleum Ltd (PPL) and Oil and Gas Development Corporation (OGDC), as well as BP, ENI, OMV, and BHP. The largest currently productive fields are Sui in Balochistan, by far the largest at 650 million cubic feet per day (120 Mmcfd), Adhi and Kandkhot (120 Mmcfd), Mari, and Kandanwari.

Surveys in the area pinpointed several potential areas in Balochistan for natural gas development. These included the Zainkoh range in Dera Bugti Tribal Agency, the Jandran area of Kholu in the Mari Tribal Agency and Sarooria in Khuzdar district.

The military regime of President General Pervez Musharraf therefore decided to open these areas for exploration, but they are controlled by the Bugti, Mari and Mengal tribes, which have traditionally been at the heart of rebellion.

All three tribes were pro-USSR during the Cold War, and in the early 1970s they revolted against the central government. Their insurrection was brutally stamped out by Zulfiqar Ali Bhutto's government. Iran also helped Islamabad to quell discontent because the rebellion aimed to establish a Balochistan state beyond Pakistan's borders, including areas of Iran and Afghanistan.

Now, though, the situation has changed somewhat. It is believed that Baloch tribes are in contact with the administration across the border in eastern Iran in Zahadan province, and through it they are in contact with the Tehran government, which is keeping a close eye on developments in Balochistan.

In mid-2000, Pakistan said that it would permit a natural gas pipeline linking Iran's massive reserves to rival India across Pakistani territory. Pakistan would earn transit fees and also would be able to purchase gas from the pipeline as it needed. While Iran and Pakistan have shown great interest in the project, India has been reluctant to move forward as long as political and military tensions with Pakistan over Kashmir persist, although a feasibility study is under way. Another possible natural gas pipeline would link the Caspian Sea gas-rich Turkmenistan with Pakistan via Afghanistan

These proposed pipelines, plus the development of Gawadar into a deep 27-berth port that would accommodate both large tankers and military vessels, have severely irked the tribes in Balochistan, as has the presence of more than 20 exploration companies - mostly British and American - active in the region.

Such was the antagonism of the tribes that they were not allowed to work on the gas fields, and the security situation deteriorated, resulting in both local and foreign development companies declaring "political force majeure" - a term used to hold in abeyance a work program required under an agreement due to political and security issues beyond the control of investors. The Sui and Uch fields, for example, had come under rocket attack.

On September 11 last year, Musharraf, while presiding over a meeting in Quetta, gave September 30 as a deadline for the force majeure clauses to be lifted. This deadline was not met, and work still remains halted in the region.

Relevant authorities and officials of the Ministry of Petroleum and Natural Resources subsequently held meetings with tribal elders through the Balochistan state government, and a package was hammered out.

The Rs890 million (US$15 million) package included several measures to encourage the involvement of local as well as foreign companies in exploration activities, and provisions for the relocation of the Mari, Bugti and Mengal tribes people to more secure areas with proper facilities and social welfare facilities.

And last month an agreement was signed in Quetta by the director-general of Petroleum Concessions, G A Sabri, the heads of OGDCL and PPL and a representative of Nawab. The low-profile ceremony, sources said, was also witnessed by Nawab himself and the secretary for petroleum affairs, M Abdullah Yusuf.

Under the accord Nawab would ensure the security of oil and gas exploration activities in Balochistan, as well as the protection of existing installations. In return for guaranteeing security, the PPL and the OGDCL would recruit as many as many as 150 Bugtis at the Uch and Sui fields. The federal government has now asked Nawab to send a list of candidates he wants recruited so that it can be passed on to the companies.

Further, all of the social welfare and uplift projects will be routed through Nawab, but no cash transactions would be involved. The government will also rebuild the road from Uch to Sui, and well as stand guarantor to agreements between the companies and Nawab.

Quetta Corps Commander Lieutenant-General Abdul Qadir Baloch has been assigned to conclude similar agreements with representatives of Sardar Attaullah Mengal and Sardar Khair Bakhsh Mari, without further delay. The corps commander has been briefed about the details of the "Bugti agreement" and similar concessions the government has already discussed with Sardar Mengal in London. The agreement with Mengal was to be signed in London, where is in self-exile, but now both sides have agreed to sign it in Quetta.

However, it now appears that Nawab has reversed his position, and despite his pledges to the federal government he has threatened anyone coming to his district with death. This pushed the government into a massive deployment of Frontier Constabulary and Pakistan army troops in the area. In retaliation, the Bugti tribes mobilized their forces, and the 10-day standoff ensued.

Dialogue has resumed and the government has constituted a new body to negotiate terms and conditions with Nawab, who sources say is adamant that he will never allow US or British companies to operate in his region, fearing that they will boot him off the land and deny his tribe their mineral resources.

Chinese and Iranian companies, however, will be allowed access to the area. The sources say that the latest revolt is likely to last a long time. Exploration companies will be the first target, Gawadar Sea port, which would be the terminus of the Caspian Sea pipeline, would be the next target.

And Balochistan, a huge land rich in oil and gas resources and with a small population spread in Afghanistan Iran and Pakistan, could become a new focal point in regional and international disputes.

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Jul 25, 2002


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