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Afghan Pipe Dreams: Will Oil and Gas Giants Build a Central Asian Pipeline? Where?

by Pratap ChatterjeeSpecial to CorpWatch
June 28th, 2002

Uzbekistan

Not everybody is convinced that Turkmenistan will be the source of a future pipeline in Central Asia. Joseph Naemi, an Iranian born businessmen who splits his time between Sydney, Australia, and Tashkent, Uzbekistan, is working on the possibility that Afghanistan's other major northern neighbor may be a better business bet.

"General Abdul Rashid Dostum, who controls much of the north, is Uzbek and is very close to the government of Uzbekistan. They share a certain sensibility," says Naemi.

He is not waiting for Unocal or other oil giants to come knocking. Naemi has set up Chase Energy, a small oil company based in Amsterdam, as a vehicle through which he plans to invest hundred of millions of dollars over the next five to seven years developing oil and natural gas fields in Uzbekistan, hoping eventually to export oil and gas to and through Afghanistan by pipeline. "We are small and flexible, we are the pioneers who are willing to take risks," he boasts.

Kazakhstan & Azerbaijan

But for the moment both Uzbekistan and Turkmenistan are wannabes in the competition to produce oil and gas for foreign markets in the region. The countries that have attracted the most foreign investment to date are the two other major Caspian Sea oil producers: Kazakhstan and Azerbaijan.

Last October, U.S. oil giant ChevronTexaco celebrated the opening of a new oil export route with the completion of a 1,000 mile pipeline, built from the Tengiz field in western Kazakhstan to the Black Sea port of Novorossiysk in Russia, at a cost of $2.6 billion.

Next on the agenda is the construction of a 1,080 mile long pipeline from Azerbaijan, via Georgia, to Turkey. In July 2002, a consortium led by British Petroleum is expecting to begin land acquisition and construction of the pipeline, which is estimated to cost $2.9 billion.

For more on the Caspian Natural Gas Pipeline, read Pratap Chatterjee's article, Afghan Pipe Dreams.