On September 20, Afghan news reports said that the Asian Development Bank had agreed in principle to support the idea of financing a 1500-kilometer gas pipeline across Turkmenistan, Afghanistan and Pakistan. Though Western experts doubt this pipeline's profitability, Afghanistan hopes to utilize its natural resources to promote economic recovery. Russia is signaling that it intends to secure a large role in reviving Afghanistan's energy infrastructure.
Rosneft, Russia's state-controlled oil company, is moving to regain control of assets that it held prior to the Soviet invasion of 1979. The company, a $4.3-billion outfit chartered in 1995, plans to send oil specialists to Afghanistan in the "nearest future," according to spokesman Dmitry Panteleyev. On August 12, Rosneft signed a protocol of intent with Afghanistan's Ministry of Mining and Industry and with the gas-trading arm of Itera, one of Russia's largest private gas companies. Under the protocol, Rosneft pledged to survey Afghanistan's Jarkuduk, Hoja-Gugerdag and Yetym-Tag gas fields and inspect the existing Hoja-Gugerdag-Mazar-i-Sharif gas pipeline. On September 13, Interfax reported that Itera might invest as much as $50 million in restoring Afghanistan's oil and gas industry.
Rosneft has made even firmer commitments. Under the protocol, it promised to "participate in the development and privatization of oil and gas blocs that Afghanistan will offer in the future," according to published reports. Rosneft also promised to help the Afghan government recover files on previous rounds of oil and gas exploration. These files returned to Moscow back in 1988 on the eve of the Soviet withdrawal from Afghanistan.
Rosneft specialists had planned to travel to Afghanistan on September 7, but their arrival was delayed by the deteriorating security situation. A gunman tried to kill Afghan President Hamid Karzai and Kandahar governor Gul Agha Shirzai on September 5, the same day a car bomb in Kabul killed at least 30 people. Informed sources have since told EurasiaNet that these plans are back on track, thanks to extra security guarantees from Deputy Minister of Defense Abdul Rashid Dostum. Dostum, the Uzbek warlord who controls Mazar-i-Sharif in northern Afghanistan, used to be a head at an Afghan gas field prior to the 1979 Soviet invasion.
While Pakistan and Turkmenistan have relatively little experience in large-scale pipeline development, Rosneft officials say the company's expertise should make it a major player in Afghanistan's oil and gas sector. In the 1960s and 1970s, Soviet experts helped discover the country's first oil and gas deposits. According to Rosneft, there are eight gas fields and five oil fields in Afghanistan with combined hydrocarbon reserves valued at $22 billion. Soviet experts also discovered 18 gas prospects and 11 oil prospects in Afghanistan, Rosneft said. Rosneft also stated interest in building an oil refinery in Afghanistan with 1 million tons annual capacity.
As it positions itself as an international leader in Afghan reconstruction, Moscow may seek other business opportunities in the ravaged country. Russian firms reportedly have prepared to help reconstruct some 140 industrial outlets built during previous decades. Other Russian outfits may take positions in Afghanistan's air freight sector or get to work repairing its roads. These would be daunting tasks. Approximately 10 percent of Afghan roads are in good working condition. But Russia also has experience importing fossil fuels from Afghanistan's rugged terrain. During the 1980s, 90 percent of Afghanistan's natural gas came to the Soviet Union through Soviet-built pipelines. Annual exports peaked in 1984 at 3 billion cubic meters. However, Afghanistan has not exported gas since 1994.
Private companies might find the idea of investing in Afghanistan too risky, as the country does not yet have a banking system or a national police force. Rosneft, since shelving plans for a partial privatization in 2000, now increasingly works as a government agency rather than Russia's seventh-largest oil company. For instance, the Kremlin has ordered Rosneft to rebuild the oil sector in the breakaway Chechnya region. Rosneft also functions as a quasi-government agent to negotiate large-scale projects with foreign investors in Russia as well as government-supported projects overseas. It has joined oil projects in Kazakhstan and Algeria, and may take stakes in projects in Iraq, Iran, Libya and Sudan.
Rosneft may also angle for a role in the ambtious trans-Afghan pipeline projects provided that the plan continues to move forward. The next round of talks on the pipeline plan are scheduled to take place October 23 in Ashgabad, Turkmenistan. Russia agreed on September 19 to purchase as much gas from Turkmenistan as it could export through existing pipelines after meeting prior contracts. Russian pipelines are today the main outlet for Turkmenistan, a country that may hold the fourth largest natural gas reserves in the world and that heavily depends on revenues from gas exports. In July, authoritarian Turkmen President Saparmurat Niyazov - presumably aiming at reaching a compromise with Moscow - invited Rosneft and Itera to participate in the construction of the trans-Afghan pipeline. Rosneft's spokesman declined to confirm whether the company reached any actual deal in this regard.
Editor's note:
Sergei Blagov is a Moscow-based specialist in CIS political affairs.
