ASIA REVEALS ITS DARK SIDE
|"My child, let the world know that Nicaragua is a center point for the capitulation of the United States of America and Canada. Already there are plans afoot, and in the making, with missiles and all dire instruments of destruction. These plans are being formulated from Nicaragua, to go into Mexico, and thereupon into the United States." - Our Lady of the Roses, June 18, 1987|
compiled by Dee Finney
I was laying in bed next to Joe who was snoring. I could see out the window into a city street where a small groups (six?) 'shooters' in gray uniforms were standing next to a building with guns ready.
I kept nudging Joe to wake up, saying, "Shooters! Look at the 'shooters'" but Joe wouldn't wake up and I felt very frustrated.
Then I realized that I was sleeping too and dreaming this and it wasn't real.
NOTE: After I woke up I was thinking about that dream and I had a quick vision which showed me the same 'shooters' in gray uniforms and wearing flight helmets , standing in a desert-like area like they had just flown in.
A voice said, "They looked like this!" and it looked very real.
NOTE 2: I wasn't familiar with the term 'shooters' but a couple days later, the very next page I came to in a book I was slowly reading titled, "The Rogue Warriors - Strategy for Success" by Richard Marcinko, I came to this on page 20: (He was talking about how he trained even the lowliest of his team to do 'all' the jobs including 'flying' even though that wasn't part of their normal training according to military protocol) "The net result of my care and feeding of my grunts, or 'shooters', was that these guys would gladly move hell for me and bite the tongue off the devil. And each of them would be able to do something like that because each shooter could fly, parachute, swim, and attack all by himself, if necessary. Each man mirrored the entire machine of "SEAL" Team Six and the machine mirrored each man.
I did research on the grey uniforms, and other than civil war period which I knew this wasn't - grey uniforms are worn by the Chinese.
I didn't find any other country that used grey uniforms.
4-19-05 - DREAM - I was living in a house with a woman named Mary. She had a husband, but he was never home. He worked night and day it seemed.
I woke up in the morning, when Mary came to the door of my bedroom and asked if I was all right.
The room was dimly lit because there were dark shades on the windows, so I couldn't tell what time it was.
I became alarmed that she needed to know if I was okay, so I got out of bed to see if she, herself was okay.
I came out into the living room, I saw on the clock that it was 10 minutes to 8 a.m. It was later than I thought and I could see that the sky was blue and the sun was shining outside. I should have gotten out of bed hours earlier.
Mary was sitting in the living room talking quietly with a couple other women.
I needed to go to the bathroom and when I went in there, I saw there was no lid or seat on the toilet, so I couldn't sit down on the toilet without falling in, so I couldn't use it.
I decided to look for another bathroom and going through the hallway, I could look into Mary's husband's bedroom.
On the wall, was a TV wall screen as large as the whole wall. It was showing a war movie.
I don't like watching war movies and this one was particularly gruesome. There was a weapon they used that shot fie, not bullets. When someone got hit with the fire the burst into flames, completely immolated and burnt to a crisp. It was so awful I couldn't watch it, so I closed my eyes to blank out the sight of it.
When I opened my eyes, the movie replayed itself and when it started getting really bad - to see the soldiers being annihilated by streams of fire coming down from the sky, I just couldn't watch it and closed my eyes again.
Again I opened my eyes and the scene started replaying itself again. It came to me that every time I closed my eyes, it would repeat the war scene and it wouldn't stop doing that until I watched the film all the way to the end or I would never be horrified enough to do something about it to prevent it in the first place.
So I stood there and watched the soldiers being hit by streams of fire coming from the sky. All the soldiers had were rifles to defend themselves with. They had no defense for these horrible weapons. They tried pressing themselves up against walls or behind objects and that didn't help. When the stream of fire came down, the fire was worse than a bullet, it could billow around corners and immolate anything that was close by.
The film just kept getting worse and worse. Unfortunately, I was so horrified to see all these solders getting burned to death, I couldn't watch the film all the way to the end. I couldn't stand to see all these men die so needlessly.
I had to close my eyes - it was too horrible to bear.
See: WEAPONS OF WAR
THE 6TH TRUMPET OF REVELATION
6-28-05 DREAM - I was riding in a car with a tall black woman. We went through an intersection and on the other side of that street was a square building that looked like it had silver windows or had silver curtains over the windows that was blocking them.
My friend wanted to stop at a restaurant right beyond that building, so she pulled up in front of it. I decided it was a good place to go to the bathroom.
We walked inside and instead of a restaurant it looked like a bird sanctuary.
I no sooner walked in and all the doves came and sat on the hawks so they couldn't move.
Over in the corner, some new chicks who had red feathers were fledging and I was told by a man who was watching them, it only took one generation to create them.
There were a lot of them. (Having raised birds myself, I found that to be highly unusual to get as many red feathered chicks in just one generation.) Something highly unusual was going on here.
None of these birds were in cages either. It wouldn't be long and these chicks would be flying all over.
I saw a dog over a ways. The dog was large and dark brown and the dog was turning red also.
The man called the dog Asia. The dog was pretty big and I was intimidated by it.
The man said, "Why are you afraid of this dog? She's yours!"
I denied owning Asia. Asia came over to me, walking around me, crying and whining for attention.
I insisted I didn't own Asia. I told the man that my son Ken was in charge and asked where he was.
The man said, "Ken went out hunting."
So I told the man I would go find Ken and see what was going on. Obviously a lot had been going on while I wasn't paying attention.
I went out into the yard to look for Ken and saw a green winter snowsuit laying on the ground. I was afraid that was Ken so I ran over to it and found the suit to be empty.
So I went over to the house and hanging upside-down on the door was a brown winter snowsuit drying in the breeze. I had been afraid to look at it. It almost seemed like there was a body in it.
I opened the door and there was Ken talking to his Father.
I heard Ken say, "Ooops! I'd better get going." , and he came outside to fill me in on what was going on.
During the Iran-Contra hearings, the Defense Intelligence Agency revealed that by 1985 the Nicaraguan military was at an all-time high of 62,000. The Nicaraguan government had more forces than the rest of Central America combined, not including the presence of Soviet, Cuban, and PLO advisers.
A 10,500 foot airstrip with six foot deep runways that can accommodate the most deadly Soviet bombers is now completely built at Punta Huete in Nicaragua. This airstrip is already fortified as a military installation. Anti-aircraft batteries and surface-to-air missiles are already in place.
The final plans for the invasion of North America are now being made. Thomas Borge, the Interior Minister of Nicaragua said: "We have Nicaragua, soon we will have El Salvador, Guatemala, Honduras, Costa Rica, and Mexico. One day, tomorrow or five years or fifteen years from now, we're going to take 5 to 10 million Mexicans and they are going into Dallas, into El Paso, into Houston, into New Mexico, into San Diego, and each one will have embedded in his mind the idea of killing ten Americans." (Thomas Borge, Nicaragua Interior Minister as quoted in the Washington Times, March 27, 1985)
Furthermore, there is recent activity in Panama that indicates a communist-backed destabilization. Newsmax.com reports:
missiles being shipped into Panama?
Gertz reports that China has two new medium-range missiles that are
transported and fired from truck launchers, small enough to be concealed
in shipping containers. One of these Chinese missiles, the DF-31,
has an explosive yield of 0.3 -1 megaton (between 20 - 60 times more
powerful than the atomic bomb dropped on Hiroshima). In declassified spy
photos obtained by Gertz (see China Threat, 235), it is clear
that these small, mobile Chinese missiles could easily be shipped into
Panama without being detected.
U.S. - Mexican
Chinese at U.S. -
Also, a report from "Strategic Jungle" on January 2, 2001 says the same:
troops and missiles
- There are now areas being like pinpointed upon the map. I see
California. It looks like southern California, and there are two dots on
that side of the map, two in southern California.
Faal, and as reported to her Russian Subscribers
Russian Intelligence Analysts are reporting today that both
President Putin (
The government of Uzbekistan had called first for these actions,
and as we can read as reported by the Indian National Newspaper Hindu
News Service in their article titled "Uzbekistan
steps up pressure on U.S. to close base" and which says, "Uzbekistan
is stepping up pressure on the United States to withdraw its air base
set up in the Central Asian country for operations in neighbouring
Afghanistan. Uzbekistan also said that the United States had not paid
takeoff and landing fees, as well as compensation for security services,
new infrastructure, ecological damage and inconvenience to the local
The government of
The actions of the United States Military Leaders though to these demands to leave have been met instead with their increasing their combat capabilities in both Uzbekistan and Kyrgyzstan, and in total disregard to both Russian and Chinese warnings issued to them, and of which can read as reported by the USA Today News Service in their article titled "China, Russia-led alliance wants date for U.S pullout" and which says;
regional alliance led by China and Russia called Tuesday for the U.S.
and its coalition allies in Afghanistan to set a date for withdrawing
from several states in Central Asia, reflecting growing unease at
America's military presence in the region. The Shanghai Cooperation
Organization, which groups Russia, China, Kazakhstan, Kyrgyzstan,
Uzbekistan and Tajikistan, urged a deadline be set for withdrawal of the
foreign forces from its member states in light of what it said was a
decline in active fighting in Afghanistan. The alliance's move appeared
to be an attempt to push the United States out of a region that Moscow
regards as historically part of its sphere of influence and in which
China seeks a dominant role because of its extensive energy
Angering President Putin also has been the United States
pressuring the European Union to attempt to take away Russia’s vast
oil resources, and as we can read as reported by the Moscow Times News
Service in their article titled "Putin’s
Aide Warns of Finno-Ugric Conspiracy to Seize Russia’s Oil
Assets" and which says, "The
deputy head of Russia’s presidential administration, Vladislav
Surkov, has said that foreigners are
accusing Russia of oppressing provinces that are home to Finno-Ugric
nations and “strategic resources” of oil..Speaking
at a meeting with Russian businessmen, Vladislav
Surkov said, “Today, Finland, Estonia and
the European Union have become markedly more intense on the topic of
Finno-Ugric nations. It turns out that we oppress them somehow. They
allegedly have no rights in our country. Regions where those nations are
dominant have strategic resources of our oil. I am not a follower of a
conspiracy theory. But this is evidently a planned action.”
Moscow Officials further report that upon hearing of these latest
moves by the
To the Western peoples it still appears that they believe this American War upon the World is based on ‘terrorism’, but to the rest of the World it has long been known what the Military Leaders of the United States were planning, and even to as far back as 1998 were the warnings of these wars being reported, and as exampled by one such warning issued by the World Socialist Web Site News Service in their article titled "New Caspian oil interests fuel US war drive against Iraq" and which had said;
geo-political interests are fueling the American war drive. In many
respects US policy in the Persian Gulf is driven today by the same
considerations that led it to invade Iraq nearly eight years ago. As a
"senior American official"--most likely Secretary of State
James Baker--told the New York Times within days of the Iraqi occupation
of Kuwait in August of 1990: "We are talking about oil. Got it? Oil,
vital American interests."
What is perhaps most insane about these Western peoples reactions to these true things is their not caring to know that both Russia and China are not going to lose Central Asia, or the Middle East, by anything other than Military defeat. The suddenness of this Wars escalation will surprise these Westerners, even as their Military Forces had been the ones who started it, and as we can read as reported by the Washington Post News Service in their article titled "The Undeclared Oil War" and which says;
undeclared oil war is but the latest reminder that in a global economy
dependent largely on a single fuel -- oil -- "energy security"
means far more than hardening refineries and pipelines against terrorist
attack. At its most basic level, energy security is the ability to keep
the global machine humming -- that is, to produce enough fuels and
electricity at affordable prices that every nation can keep its economy
running, its people fed and its borders defended. A failure of energy
security means that the momentum of industrialization and modernity
grinds to a halt. And by that measure, we are failing.
To this ‘New Kind Of War” the Washington Post speaks of we can already see by the actions of these Western Nations how it is to be waged, by the deliberate terrorizing of their own citizens through continued mass attacks designed to keep them in constant fear against enemies that do not exist for the purpose of creating a War Society built upon the model established by the Nazi Germany Regime of the 1930’s, and which led to the last Global War.
For their continued refusal to see the whole truths of the very
World they live in, and instead believing only in the repeated lies of
propaganda told to them, these Western peoples have now been labeled as
the most insane in the world, and as we can read as reported by the
Australian News Service in their article titled "People
in West suffer more from mental illness" and which says,
in the West suffer more from mental illness than those in poorer
countries, with chances of recovery being higher in places like India
than in say New York or London, says an Australian study. Their findings
are expected to rewrite international textbooks on the devastating
mental illness characterized by symptoms such as hallucinations,
delusions, disorganized communication, poor planning and reduced
motivation, it reported."
To the shocking devastation of Total Global War these Westerners
know only through their movies, soon they will know it by looking out
Note: The United States government actively seeks to find, and silence,
any and all opinions about the
Posted on: Thursday, 14 July 2005, 03:01 CDT
Caspian Nations Pursuing Oil Exports at Greatly Varying Paces
CASPIAN OIL OUTLOOK-2
This is the second of two parts on the outlook for oil exports from countries that border the Caspian Sea.
Gushers and dry holes
With the battle for pipelines essentially over, international oil companies (IOCs) and regional governments can get down to the business of actually pumping out the Caspian's oil potential.
Numerous projects are under way, the majority of which are being led by foreign energy companies. Yet after a number of drilling disappointments in the southern Caspian Sea, including several dry holes, some projects in Azerbaijan have already closed down.
Other projects, such as the elephantine Kashagan field off Kazakhstan, appear set to live up to the hype. Still, only a handful of major projects will provide the bulk of the new oil emanating from the Caspian region (Table 2).
Kazakhstan: still to bloom
No state represents the potential of the Caspian region better than Kazakhstan. The country's vast proved oil reserves were largely untapped in the Soviet era, and the discovery of the massive Kashagan field in 1999-the largest oilfield discovery in the world for 30 years-in shallow water of the North Caspian has only added to its allure..
Yet Kazakhstan's offshore is largely unexplored, and the much- vaunted "Caspian Development Programme" has been derailed by a restrictive production-sharing agreement (PSA) regime and a new tax policy in 2004 that foreign energy companies say has hampered investment.
Still, Kazakhstan's potentially voluminous offshore oil reserves have made it the most attractive investment destination in the Caspian region for IOCs. Its main Caspian project already in production is at Tengiz oil field on the eastern shore, developed by Tengizchevroil (TCO), a Chevron-led consortium, with estimated recoverable reserves of 7-9 billion bbl.
The $3 billion second generation and sour gas injection (SGP/ SGI) expansion finally went forward in January 2003 after a dispute over financing of the project, and output at the field rose to 270,000 b/dby the end of 2004. Production is slated to reach 750,000 b/d by the end of the decade and could top out at 1 million b/d by 2012 under the right economic conditions.
Although not technically a "Caspian project," the development of its Karachaganak gas-condensate field on the Russian-Kazakh border is nonetheless a key energy project for Kazakhstan. Led by BG Group, the Karachaganak Petroleum Operating BV (KPO) consortium has focused on extracting liquid hydrocarbons in the initial stages of the field's development.
A pipeline connection to the CPC's Tengiz-Novorossiisk pipeline, completed in 2003, has given the consortium an export outlet for its condensate output, although a problem with contamination forced KPO to push back exports via the CPC until mid-2004.
KPO is producing 100,000 b/d in condensate with plans to increase that total to 140,000 b/d, although Phase III development of the field will focus on gas extraction. Karachaganak condensate exports eventually could be redirected to China once the Kazakhstan-China pipeline is completed.
The aforementioned Kashagan project is Kazakhstan's first major offshore oil field development, and its massive size-with an estimated 3 8 billion bbl in proved reserves, including at least 7 billion to 9 billion bbl recoverable-has stimulated significant IOC interest in the offshore development program.
Due to its massive production potential and obvious importance- both to Kazakhstan and global oil supply-the project has been delayed by a series of setbacks as the government and the consortium developing the field, the Agip Kazakhstan North Caspian Operating Co. (Agip KCO), have argued over plans for developing Kashagan.
OAO Lukoil and Kazakhstan's Kazmunaigaz used Lukoil's Astra jack up to spud the first well last month on the Tub-Karagan block in the Caspian Sea. It is to drill to 2,500 m in 7 m of water.
An original timetable for the start of oil production in 2005 proved untenable, prompting the government to demand compensation from Agip KCO, led by Italy's Eni, before consenting to a delay in the start of production. The new timetable for production envisions first oil in 2007-08 at 75,000 b/d, rising quickly to 450,000 b/ d by 2010, then to 900,000 b/d by 20 13, and finally hitting a plateau output of 1.2 million b/d by 2016.
Recently, five of the existing members of Agip KCO struck an agreement-after protracted negotiations-with the government to divide up BG Group's 16.67% stake in the project among them, with Kazmunaigaz getting an 8.33% stake to give the state a direct role in Kashagan.
Several more oil projects in the Kazakh sector of the North Caspian are in the very early stages, with talks still continuing over fields such as Isatai, Zhemchuzhina, and Zhambyl. In addition, Russia and Kazakhstan have agreed to jointly develop the 7.33 billion bbl Kurmangazy field, which lies in the Kazakh sector of the sea but straddles the Russia-Kazakh border. However, a deal on a PSA for the field has been delayed over Rosneft's concerns over the Kazakh fiscal regime, even as Kazmunaigaz is ready to bring in France's Total as operator of the project.
The Kurmangazy dispute epitomizes the Kazakhstan dilemma for foreign oil companies: a massive oil field that holds much untapped potential but an overbearing government eager to dictate the terms and pace of development.
Kazakhstan is hoping to treble its current production of 1.2 million b/d by 2015, but government interference is beginning to hinder foreign investment. In turn, the government is increasingly turning to state-to-state oilfield development deals rather than open tenders for its offshore blocks.
Kazakhstan will need additional export outlets, as well as perhaps a more conciliatory approach to foreign investors, if it is to catapult into the superleague of world oil producers in the next decade (Table 3).
Azerbaijan: boom, then bust?
Once seen as the jewel in the Caspian crown, Azerbaijan is proving that much of the 1990s hype surrounding the Caspian is overblown.
A series of high-profile drilling disappointments in the Azeri sector of the Caspian Sea left several IOCs high and dry, though the Azeri government continued to promote the country's offshore potential all the while. The result has been a distinct shift northwards in foreign investment in the region, leaving Azerbaijan scrambling to convince energy companies to continue drilling while hoping for another major discovery.
For Azerbaijan, one of the oldest hydrocarbon-producing regions in the world, the 21st century oil boom starts-and may end-with the exploitation of the ACG structure. The BP-led AIOC signed the 30- year, $8 billion "contract of the century" in 1994, and initial oil production began in 1997, but 2005 marks a turning point for the project.
With the BTC pipeline slated to come on stream later this year (initial exports from Ceyhan are expected in the fourth quarter following the pipeline's official commissioning in May 2005), AIOC has begun to ramp up production at the structure, which stood at 130,000 b/d at the end of 2004.
The start of production at Central Azeri field in February 2005 has already ratcheted up output to around 165,000 b/d through March, and production for 2005 is expected to rise to around 220,000 b/d.
With West Azeri field scheduled to come on stream in 2006, AIOC is expecting output to increase to 424,000 b/d of oil, then to 754,000 b/d in 2007 with the first oil from East Azeri field. The final phase of the ACG project, development of deepwater Guneshli field in 2008, is expected to push AIOC's oil production past the 1 million b/d level in 2008 with 1.046 million b/d once the field is brought on stream.
CASPIAN REGION MAJOR OIL DEVELOPMENT PROJECTS
However, AIOC's development plans for the 5.4-billion-bbl ACG structure envision a sharp dropoff in production after hitting peak output. The ACG fields will see production taper off to 800,000 b/d early in the next decade before a steep decline starts, with output leveling off at between 250,000 and 300,000 b/d by 2020 (Table 4).
Now that Azerbaijan's oil boom has finally arrived, however, the government needs other projects to sustain that boom, but the prospects thus far are not good. High hopes for offshore projects at the Lenkoran-Talysh, Oguz, Apsheron, and Ateshgah blocks were dashed by drilling failures, and each of those projects has closed.
Similarly, ExxonMobil's inability to find commercial hydrocarbon reserves at either the Zafar-Mashal structure or the Nakhichevan block means that these two projects are effectively dead as well.
Just as Azerbaijan's long-awaited return to world oil prominence is kicking off, the country is staring directly into the abyss in the absence of another major discovery.
Azerbaijan still has hope, however, that several fields could dispel the notion that the country is all hype, no substance. For example, Lukoil is drilling the Yalama block in the northern part of the Azeri section of the Caspian Sea. In addition, the country stands to benefit greatly from a multilateral accord on the legal status of the Caspian Sea-if only the littoral state\s could agree to one.
Several prospects in disputed waters near the Azeri-Iranian and Azeri-Turkmen maritime borders could see significant investment if the legal uncertainty about their ownership is removed. In particular, the Araz-Alov-Sharg structure, with an estimated 6.6 billion bbl in reserves, could be a major boon for Azerbaijan's oil industry.
A joint development deal between Azerbaijan and Iran, along the lines of the Russian-Kazakh agreement in the North Caspian, could open up the structure for development, but in the absence of such an agreement, Azerbaijan will increasingly rely on the ACG project to drive its oil production.
Turkmenistan: frozen in time
Over the course of the past 14 years, independent Turkmenistan has distinguished itself among the ex-Soviet Caspian nations as a virtual black hole of foreign investment.
Not only are the estimated oil reserves in its sector of the Caspian Sea thought to be substantially smaller than those of Azerbaijan or Kazakhstan, but Turkmenistan has also done a far better job of repelling foreign investment than it has of attracting it.
The central Asian republic inherited a bloated bureaucracy from the Soviet era, but under President Saparmurad Niyazov (also known as "Turkmenbashi," or "Father of the Turkmen"), the investment climate has perhaps even worsened.
Niyazov, who was appointed president-for-life in 1999 by the rubberstamp Turkmen legislature, has exhibited a knack for erratic policymaking and micromanagement of the economy, fostering a wildly unpredictable investment climate, complete with arcane regulations and constantly changing administrative requirements.
The absence of political or economic reforms gives Turkmenistan the aura of a mini-Soviet planned economy, precollapse. The majority of international energy companies who dared venture into the murky world of Turkmenistan in the 1990s have departed, leaving only a handful behind.
Still, those few companies that have found themselves on Niyazov's good side have managed to carve out a small niche in the country's Caspian shelf. Dragon oil, a company based in the United Arab Emirates, has the rights to the Cheleken contract area on the shoreline, and the company's extensive well workover and continuous drilling program have boosted production above 20,000 b/d.
Petronas, the Malaysian state oil company drilling at Makhtumkuli- 3A field (also known as East Livanov), announced encouraging results earlier this year with plans to begin production by late 2005. Furthermore, the UK's Burren Energy is continuing to produce oil from the onshore Burun field under the Nebit Dag PSA with Turkmenistan.
Despite the shoddy investment climate and the "reputational risk" to IOCs from Turkmenistan's awful human rights record, investment dollars in the country's oil sector are actually on the rise, led by Russian companies but also including well-known players such as Denmark's Maersk Oil and lesser-known Western companies such as Canada's Buried Hill Energy.
A consortium of Russian companies, including Zarubezhneft, Rosneft, and Itera, are still negotiating details for the Zarit PSA, while Gazprom and Lukoil are also seeking to develop oil fields in the Turkmen sector of the Caspian.
Maersk signed a PSA for offshore blocks in October 2002, while Buried Hill enlisted the services of former Canadian prime minister Jean Chretien to secure rights to Serdar field. However, Azerbaijan, which also claims the field but calls it Kyapaz, has raised objections to the licensing of the field, threatening retaliation against Canada.
Given the dictatorial nature of the Niyazov regime-as well as the uncertainty in the investment climate-Turkmenistan will struggle to attract larger levels of foreign investment, making it nearly impossible to achieve Turkmen bashi's ambitious production growth targets.
Although Turkmenistan has substantial gas reserves, the country has comparatively small oil resources, and the goal of 2 million b/ d in oil output by 2020 looks unobtainable, especially given current production of just over 200,000 b/d (Table 5).
In the absence of direct access to export markets or further market-oriented reforms, foreign investment in Turkmenistan's oil sector will remain limited, which in turn will put a ceiling on Turkmenistan's ability to significantly increase its oil production.
Russia: another oil patch
For Russia, the Caspian Sea represents just one of a number of emerging oil regions.
The Russian sector of the sea has been largely unexplored, with the Kremlin (Russia's presidential administration) and Russian oil majors instead placing emphasis on efforts to exploit existing fields in Western Siberia, which has a well-developed system of infrastructure already in place.
Foreign investment in the Russian oil industry has concentrated thus far on Sakhalin Island in the Far East and the Russian Arctic, as well as Western Siberia. Eastern Siberia is beginning to come into focus as the government seeks to license new oil fields and develop the region, but the Caspian region is largely the purview of Russian companies.
Russia was an active participant in the Caspian oil and gas pipeline battles of the 1990s, but the government is beginning to emphasize exploration and development of its sector of the Caspian. A 2002 agreement with Kazakhstan on the division of the North Caspian Sea provides the framework underpinning cooperation and joint development of Khvalynskoye and Tsentralnoye fields, which lie mainly in Russian waters.
Russia's Lukoil was appointed by the government to represent the country in the joint development projects, and the oil major has formed a joint venture, TsentrKaspNeftegaz, with Gazprom to develop Tsentralnoye field along with Kazmunaigaz, the Kazakh state oil and gas company.
Lukoil and Kazmunaigaz agreed on a timetable of 2007-08 for initial oil production from the field, but given that the project remains in its initial stages, this is obviously unrealistic. In March 2005, Lukoil formed a JV, the Caspian oil & Gas Co., directly with Kazmunaigaz in order to undertake development of Khvalynskoye field.
Despite these tentative steps forward, Russia's exploration and development of its part of the Caspian Sea will likely remain on the back burner in the short term as foreign investors remain wary of the Kremlin's increasingly interventionist approach to the Russian natural resources sector.
The long-running "Yukos affair" continues to cast a shadow over the Russian oil industry, especially in the wake of the verdict in the trial of former Yukos CEO Mikhail Khodorkovsky. Despite the cancellation of the state's plans to merge Gazprom and Rosneft, the Russian government's determination to acquire a majority stake in Gazprom and regain control of the gas giant indicates the state's desire to play an even more direct role in the development of Russia's oil and gas reserves.
AZEBBAIJAN OIL PRODUCTION
Oil reserves in the Russian sector of the Caspian, therefore, are likely to remain an exclusively Russian play (with Kazmunaigaz along for the ride with the bilateral deal to divide the North Caspian).
The Kremlin will likely dictate the pace of development of the Russian sector of the Caspian in line with state political and economic objectives. Regardless, the Caspian's contribution to Russia's overall oil production will remain minimal for the foreseeable future.
Iran: delay tactics
Iran has taken a rejectionnist stand on Caspian development by the other littoral states to date, holding out for one-fifth of the sea's resources.
Kazakhstan, Azerbaijan, and Russia have backed the division of reserves based on length of coastline, which would give Iran only a 13% stake of the area resources, the smallest of the five states.
Iran has been fighting a losing battle against the other Caspian littoral states, basing its rationale for a division of the sea on early 20th-century agreements that hold little water given the emergence of the new states from the breakup of the Soviet empire.
Indeed, development work by the northern Caspian states has picked up since the Russia-Azerbaijan-Kazakhstan trilateral agreement of 2003, leaving Iran's as a sole dissenting voice, with some occasional backing from Turkmenistan, which would receive an 18% stake under the median-line division.
However, Iranian resolve over an overall territorial division does seem to be slipping, at least in practical terms if not on the rhetorical level, where the 20% claim lives on. An aggressive drive to increase transit oil from existing Caspian developments is one sign of pragmatism from the Iranian side.
Iran has a goal of increasing its volume of oil transit to 1.6 million b/d by the end of the decade from some 110,000 b/d at the end of 2003. Some of this volume would necessarily come from offshore production. Energy cooperation between Iran and the former Soviet Caspian states is also increasing via new gas pipeline linkages and electricity connections.
Another sign of weakening Iranian resolve on this issue has been the government's decision to commission seismic surveys and launch an exploratory drilling program in the near offshore area in 2005.
Iran is looking for additional oil reserves to meet ambitious production targets of 5 million b/d by end-2005-which appears unlikely given current capacity of 4 million b/d-and 7 million b/d by 2015.
With an estimated 300,000 b/d of oil production lost each year through field maturity and attrition, Iran will likely require Caspian development to bring onstream the resources necessary to supplement aging onshore and gulf oil fields, a point which seems to be gathering currency within the government.
Iran started construction of the Iran-Alborz drilling platform in the Caspian in 2004 to drill to depths of over 1,000 m, although technical problems have held up the start of exploration work. Foreign players a\re also being sounded out for Caspian work, including Petrobras and Statoil, in addition to engineering players, given the lack of experience by domestic Iranian companies in deep offshore exploration and production.
As initial exploration work continues and Iran reaps the rewards of Caspian oil development in other littoral states through transit trade and product imports, the country's rejectionist stance is likely to become even less tenable. From Iran's perspective, this leaves a widening gap for a negotiated settlement on an overall division of regional reserves and the eventual allocation of exploration and production acreage in the Iranian sector to foreign players.
Outlook and implications
Looking at the bottom line, what, if any, impact will Caspian region oil production have on global oil markets?
Going forward, the trend in oil markets is relatively simple: Demand is rising steadily, with supply struggling to keep pace.
Spare capacity is being squeezed, and with much of the world's oil extracted in countries with unstable political environments, traders are bidding up prices as a result.
Demand growth has continued unabated in spite of higher prices, suggesting that demand is relatively inelastic and, unlike the oil shocks of the 1970s, rising oil prices are not snuffing out global economic growth.
TURKMENISTAN OIL PRODUCTION
Assuming oil consumption continues to rise in coming years by, say, a modest 1.8%/year rate, some 1 million to 1.5 million b/d of new oil supplies will be needed to satisfy demand. Factoring in declining production from mature existing basins in places like the continental US and the North Sea, some 2.5 to 3 million b/d of "new" oil will be needed.
Rebuilding spare capacity to quieten tempestuous markets in the event of a supply disruption will require an additional 500,000 to 1 million b/d in new oil production over a 5-year period, for example, raising the requirements for new oil supplies to perhaps 4 million b/ d/year in order to balance the market in the future.
Can Caspian oil fill the void? The simple answer is no.
Given the projected oil volumes coming from the major established and planned projects-Tengiz, ACG, and Kashagan-the Caspian region could contribute an estimated 2.2 million b/ d/year of oil to world markets by 2010.
Considering current output from these projects of around 535,000 b/d, this adds approximately 1.765 million b/d in "new oil" to the market 5 years from now-hardly enough to offset declining production elsewhere around the globe, let alone build spare capacity or even have the ability to impact prices.
Of course, some additional oil could emanate from the Caspian, notably from Karachaganak and probably from Petronas's project in Turkmenistan, but these volumes are unlikely to add more than incremental supplies to the market.
Before dismissing Caspian oil's impact on global oil supplies, however, it is useful to take a longer-term approach-and keep in mind the numerous wild cards involved in calculating the region's future production.
The Tengiz, ACG, and Kashagan projects are projected to provide 3 million b/d of oil to global supplies by 2015, including some 2.57 million b/d in new oil. However, by 2015, the Kurmangazy, Khvalynskoye, and Tsentralnoye projects could all be onstream as well, adding to the region's base of oil output.
Further development of the untapped Kazakh offshore reserves, combined with a potential lucky discovery in the Azeri sector of the Caspian, could provide further supplies-say an extra 1 million b/d in total. A multilateral agreement on the division of the Caspian could trigger investment in development of several disputed hydrocarbon structures in the southern Caspian and-given adequate export outlets-suddenly the Caspian region could actually contribute that desired 4 million b/d to oil markets in 2015.
However, this is still largely an optimistic scenario, driven by assumptions that history has not borne out. The succession of drilling failures in the Azeri sector of the Caspian does not bode well for future discoveries, and the ongoing dispute over the legal status of the sea-nearly 14 years since the breakup of the Soviet Union-does not augur well for a quick resolution that would open up new fields to exploitation.
While recent history in itself does not mean that the littoral states are precluded from reaching an agreement on the division of the sea's resources, neither does it suggest that Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan can resolve their differences and strike a deal acceptable to all parties.
Furthermore, the potential 4 million b/d in Caspian oil production to be added by 2015 is the sum total, not new oil per year. By itself, then, new Caspian oil will have little real impact on global markets, perhaps only helping to offset declining global production elsewhere.
In combination with other emerging oil supply centers such as West Africa, and Caspian region may help to balance out global markets, but if demand continues to rise at even a modest rate, these regions will still struggle to satiate the world's appetite for new oil. By itself, and in the absence of a major supply disruption in the Middle East, Caspian oil will have no substantive impact on prices in the coming decade.
Hence, Western policymakers looking to the Caspian region to help bring down lofty oil prices will be sorely disappointed. Given the projected rise in demand, new oil emanating from the Caspian basin will have a hard time even reducing the world's increasing dependence on "risky" Middle East oil. As such, OPEC will certainly gain more power as the world becomes more dependent on the producer cartel for oil supplies.
With OPEC apparently committed to a higher price band, oil prices look set to remain above $40/bbl.The hope among consuming countries that future Caspian oil supplies might serve as the catalyst to reduce oil prices in the coming decade appears overblown hype.
Not quite a dry hole, the Caspian region's impact on world oil markets will certainly be no gusher, either.
Catherine Hunter and Simon Wardell contributed to this article.
Copyright PennWell Publishing Company Jun 13, 2005
Source: Oil & Gas Journal
When questioned in front of cameras on
CNN, we saw President George Bush stuttering and stammering and refusing
to take a stand on the China bid for UNOCAL. The news reported it
this way: "President George W. Bush has declined to take a stand
on the issue, saying he will await the CFIUS review process."
China's Unocal Bid Creates Unusual Stir With Bulk of Reserves in Asia, the Risk to U.S. Supply Not 'of Critical Importance'
Aug 3, 2005
Members of Congress opposed to a Chinese bid to take over the California-based energy company Unocal have built broader support for their campaign to block the deal on the grounds that it could threaten national and energy security in the United States.
But China is not the first foreign country to seek energy assets owned by Americans. Indeed, oil industry analysts say that the effort by China National Offshore Oil Corp. to outbid Chevron for Unocal appears to pose probably even less risk of generating domestic shortages or other energy-security headaches than other foreign acquisitions that have been approved by the government in the past.
For more than two decades the United States has not blocked foreign acquisitions of energy properties by Saudi Arabia, Venezuela, Russia, France, Norway and Brazil, among others. Some of those deals, particularly Venezuela's purchase of Citgo, involve access to oil supplies vulnerable to disruption because they feed refineries and thousands of American gasoline stations.
By contrast, Unocal has few strategic oil assets in the United States. The company, based in El Segundo, California, does not have refineries or gasoline stations, having sold them eight years ago. In fact, the real prizes more than half of Unocal's production and reserves that both Chevron and the Chinese are after lie in Asia, particularly in Indonesia and Thailand.
"The assets involved in the Unocal transaction are not of the scale or geographic location to make them of critical importance to U.S. energy security," said Amy Myers Jaffe, an energy fellow at the James Baker 3rd Institute for Public Policy in Houston. "Many of the important Unocal assets are actually located in Asia, and the energy produced there would never flow to the United States."
Still, the bid has prompted strong debate in Washington. On Thursday, Representative Carolyn Cheeks Kilpatrick, Democrat of Michigan, won House passage of her amendment to the annual appropriations bill prohibiting the Treasury Department from recommending the sale of Unocal to Cnooc.
And Thursday night, the House approved, by a vote of 398-15, a resolution stating that Chinese ownership of Unocal would "threaten to impair the national security of the United States" and that approval by Unocal's board of the bid should result in a "thorough review" by President George W. Bush.
The resolution was presented by Representative Richard Pombo, Republican of California, whose district includes Unocal's headquarters. In his resolution, Pombo cited concerns about oil exploration technologies that have "dual use" in commercial and military applications.
"We cannot afford to have a major U.S. energy supplier controlled by the Communist Chinese," Pombo said on the House floor. "If we allow this sale to go forward, we are taking a huge risk."
But Representative Jim Moran, Republican of Virginia, said blocking the Chinese bid was a dangerous move.
"They are holding a financial guillotine over the neck of our economy, and they will drop that if we do things like this that are not well considered," Moran said on the House floor. "If we don't let them invest in Western firms, what are they going to do? They are going to invest in Iran or Sudan and make those governments much stronger than they are today."
The congressional debate so far seems to neglect the fact that only one-third of Unocal's production and one-quarter of its reserves are in the United States. And its combined oil and natural gas production is only 1 percent of total U.S. consumption of the two fuels. It has modest production in Texas and Alaska and is involved in costly and tough-to-develop oil projects in the deep waters of the Gulf of Mexico.
Foreign companies in the United States, however, currently own 28 percent of American refining capacity, up from 15 percent in 1983, according to the Energy Information Administration, a part of the Energy Department. Nearly 14 percent of U.S. crude oil was produced by foreign companies in 2003, up from 13 percent 20 years ago. Natural gas production by foreign companies doubled in that period to 12 percent, the Energy Department said.
U.S. securities regulators on Wednesday gave final clearance to Chevron's offer, leaving Cnooc just six weeks to convince Unocal's board that its own bid for Unocal is superior. Chevron says it would move up its shareholder vote, to August from the third quarter.
Peter Robertson, vice chairman of Chevron, said in an interview last week that Chevron believed Cnooc might "strategically focus" Unocal's oil and natural gas assets toward China, potentially restricting supply to the rest of Asia. Oil prices are determined by global supply and demand and China's energy needs are acute, so oil taken off the market could potentially affect prices everywhere. But analysts say any lost Unocal production would be too small to shift prices much or cause any global oil shock. Unocal's production and reserves in the United States could not be easily redirected.
For decades the U.S. government has restricted exports of crude oil from the Lower 48 states, since the United States must import well over half of its oil from abroad. Then, from 1973 to 1995, it restricted exports of Alaskan crude oil. Declining production on Alaska's North Slope and citizen outrage at the notion of exporting any U.S. oil have discouraged oil companies from sending much Alaskan crude abroad since then, Energy Department officials said.
Some of those opposed to a Cnooc deal, including executives at Chevron, have said China should be prevented from buying the American company because the Chinese do not "play fair" on oil deals and because the Chinese government is backing Cnooc's bid with low- interest loans.
"You don't enter China unless it is on terms favorable to the Chinese," said Robin West, chairman of PFC Energy, an energy consultancy in Washington. "Chinese companies are clearly advantaged." While potential for oil in China is not on the world scale of countries in the Middle East or around the Caspian Sea, several companies, including Chevron, have been operating in China for many years.
According to BizChina, a Chinese newspaper, China's oil industry has attracted more than $7 billion in foreign investments since 1982. Chevron is a partner with the Chinese in two midsize deals with Cnooc. Buying a majority stake in a Chinese company, however, would be difficult.
Some of the United States' longest-term energy partners have more restrictive access to their markets than China. Mexico's state- owned oil company, Petroleos de Mexico, or Pemex, does not allow outside foreign investment in Mexico's oil sector. Despite that, Shell's American subsidiary was allowed to sell 50 percent of its 215,900 barrel-a-day refinery in Deer Park, Texas, to Pemex, in 1993. Shell still operates the facility with Mexican involvement.
Source: International Herald Tribune
China, US need to avoid conflict as global resources dwindleAmid warnings that the world could be just 10 years away from a first-order resources crisis, too few in Washington or Beijing realize how easily wars can break out
By Will Hutton
Occasionally, there are tipping-point moments and we are witnessing one at the moment. Seismic change is afoot. As oil prices breach US$60 a barrel and pessimists warn that the world could be as little as 10 years away from a first-order resources crisis, China's largest oil company, China National Offshore Oil Corp (CNOOC), has launched a US$18.5 billion bid for one of the US's juiciest medium-sized oil companies, Unocal.
The world's two biggest continental economies are suddenly head to head over who controls increasingly scarce oil. The stuff of pulp novels at airport bookstalls is a reality.
The reaction in the US has been immediate, aggressive and hypocritical. Much Congressional sound and fury has been vented on Russia for not opening up more to US oil companies which want to buy strategic reserves. Now that the boot is on the other foot -- China buying an American oil company and its reserves -- US congressmen and senators are deploying Russian President Vladimir Putin's arguments as their own. US oil, jobs and national security are at issue, they blaze, and an investigation is already under way to see whether China's bid should be blocked on national security grounds. It is rigged to take months.
The Chinese, for their part, implausibly plead innocence. Assuming the improbable rhetoric of a Wall Street investment banker, the chairman of CNOOC, 71 percent owned by the People's Republic of China, says that the bid will be good for shareholders on both sides of the Pacific.
It certainly offers Unocal shareholders more cash than rival US oil company Chevron was offering, but only because the Chinese government has lent CNOOC a US$2.5 billion interest-free loan to support the loan and subsidized billions more. This is hardly fair play but Unocal shareholders aren't complaining.
Nor will CNOOC sack any Unocal workers in the US as Chevron plans, it says, and promises not to export any oil and gas from the US to China. It portrays itself as a benevolent, wronged and misunderstood good fairy.
What it wants, and is paying well over the odds for, is Unocal's oil reserves.
It plainly calculates that today's US$60 a barrel oil price is just the beginning of a sustained rise in oil prices that will make Unocal, even at US$18.5 billion, a snip. China's interest is obvious. After the US, it is now the world's largest oil importer and acquiring some strategic reserves is vital.
CNOOC's full name is telling; the China National Offshore Oil Company -- an organization committed to offshore exploration. China is the world leader in developing robotic underwater exploration submersibles; in 1994, it built a robot capable of working at depths of 305m. Now, according to the People's Daily, it has one that can work at up to 6,096m. The Chinese want oil very badly.
And they want it to be imported into China by oil pipeline and not by tankers from the Middle East under the watchful eye of the US navy. The US controls the sea lanes and thus the viability of China's economy, as it regularly lets the Chinese know by shadowing Chinese oil tankers.
The US has pre-empted China's attempts to build oil pipelines from the Caspian into China. Unocal's attraction is that its oil reserves are all in central and south east Asia, and once owned by China can be moved into China overland.
This is a new great geopolitical game and neither the Chinese nor US military are impressed by arguments that the market must rule and that great powers in today's globalized world no longer need strategic oil reserves. The US keeps six nuclear battle fleets permanently at sea supported by an unparalleled network of global bases not because of irrational chauvinism or the needs of the military-industrial complex, but because of the pressure they place on upstart countries like China.
Japan's decision this year to abandon its effort to build its own oil company and attempted strategic reserve was an overt acceptance of its dependent position. China is not ready to make the same admission of defeat.
No country has offered such a comparable challenge to the world order since Germany's rise at the end of the 19th century. Like China today, it wanted markets and raw materials; like China today, it confronted a world ordered around the needs of the existing powers; like China today, its gigantic size and explosive growth could not be ignored. Germany built fleets and scrambled for colonies in Africa.
Today, China builds fleets and scrambles for oil reserves. The open question is whether it will end in another 1914.
The optimistic reply is that China is being much cleverer than the Kaiser's Germany. It has expanded by opening up to the world, so giving its great power rivals a stake in its growth; 400 of the US's top 500 companies manufacture in China. Wal-Mart, the US's largest retailer, is founded on cheap Chinese imports. China may have built up immense foreign currency reserves, but it judiciously lends them to the US, so financing the US' trade deficit.
Although oil prices are troublingly high, some experts like Erasmus University's Peter Odell believe that, far from oil reserves running out, the earliest world production might peak is well after 2050, and that takes no account of more efficient energy use. Today's upward oil price spike won't last long. There is more than enough oil for China.
The pessimistic reply is that's not how it feels or how the game is currently being played. Even if there is enough oil, it is in parts of the world that are endemically volatile. As Paul Roberts points out in The End of Oil, the geological formations that create oil have already been identified and the easily exploitable reserves are rapidly depleting.
There is a Panglossian tendency to overstate oil reserves by oil-producing countries and oil companies alike, as we have learned from Shell. Oil production is set to peak much earlier.
In any case, what matters is less reality than perceptions of reality; the European powers didn't need colonies in Africa to ensure their prosperity, they just believed they did, as China believes it needs oil reserves in Asia today. And there are the third, fifth and seventh US fleets as a constant reinforcer of its instincts.
Nobody knows how this drama will play out. The optimists could be right. But judge the vitriolic tone of the letter from 40 congressmen to US President George W. Bush complaining about CNOOC's bid; look at the disposition of US naval power; recognize the force of China's conviction that it must never again be humiliated as it was in the 19th century and its will to catch up with the West; and plot the growth of China's oil demand as its economy doubles again.
The best way of avoiding war is not to dismiss its possibility as
outlandish; it is to recognize how easily it could happen and vigilantly
guard against the risk. Too few in Washington or Beijing are currently
Key U.S. senator opposes China-Unocal legislation
Wed Jul 13, 2005 6:36 PM ET
By Richard Cowan
WASHINGTON, July 13 (Reuters) - The chairman of the Senate Appropriations Committee on Wednesday said he sees no need for legislation similar to a House-passed measure that would block U.S. approval of a Chinese company's attempt to acquire U.S. oil and gas producer Unocal Corp. (UCL.N: Quote, Profile, Research).
"No legislation is necessary at this point in my opinion. If the (Bush) administration determines that the acquisition would pose a threat to our national security, then we can take whatever action is necessary to protect our interests," Sen. Thad Cochran, a Mississippi Republican, told Reuters.
On June 30, the U.S. House of Representatives attached an amendment to a bill funding Treasury Department activities that would block the agency from spending any money to recommend approving a takeover of Unocal by China's CNOOC Ltd.
The Bush administration has said it would conduct an economic and security review if Unocal accepts CNOOC's proposal.
The Committee on Foreign Investments in the United States (CFIUS) would conduct the review. The inter-agency panel is headed by the Treasury Department.
"There is an interagency committee, chaired by the secretary of the Treasury, which should take the lead in reviewing any proposal by the Chinese corporation to acquire an interest in an American energy company," Cochran said in a written response to questions from Reuters.
A Senate debate on a spending bill to fund the Treasury Department in the coming year is expected this summer and some senators are drafting amendments to block the sale, according to congressional sources.
The Wall Street Journal on Wednesday reported that CFIUS has declined to begin an early review of CNOOC's bid for Unocal, preferring to wait until the companies reach a deal.
A Treasury official told Reuters that CFIUS reviews begin when both parties have filed the appropriate paperwork and the committee determines that an acquisition is likely.
The committee does not do advisory opinions, the official said.
(additional reporting by Jeremy Pelofsky)
|China's Unocal bid
sparks House threat
Committee chief vows legislation to block purchase
By David Greising
Tribune chief business correspondent
Published July 14, 2005
Citing national security concerns about U.S. oil supplies, the chairman of the House armed services committee vowed Wednesday to introduce a bill to block a Chinese oil company from acquiring Unocal Corp.
U.S. Rep. Duncan Hunter (R-Calif.) said he will also push legislation to strengthen the powers of the Committee on Foreign Investments in the United States, a congressionally-mandated committee that can block any foreign purchase of a U.S. company deemed to threaten national security.
Known as CFIUS, the group of Cabinet-level appointees headed by Treasury Secretary John Snow has been criticized for what some see as lax oversight of foreign deals.
Hunter's call for new legislation followed a sometimes rancorous hearing Wednesday during which panelists such as former CIA director R. James Woolsey argued against the China oil deal by invoking memories of Pearl Harbor and China's uneasy relationship with Taiwan.
They were arguing against the $18.5 billion bid for Unocal by China National Offshore Oil Co. Ltd., a subsidiary of China's third-largest oil company, which is owned by the Chinese government.
The bid is designed to disrupt a lower, $16.6 billion offer by Chevron Corp. Unocal's board, which previously accepted the Chevron bid, is set to meet Thursday to weigh the competing merger proposals.
CNOOC's bid is expected to face significant hurdles on Capitol Hill should it emerge as the winner.
A spokesman for CNOOC declined to comment on whether the company might raise its bid for Unocal in an effort to build more shareholder support for the deal.
The bipartisan rhetoric on Capitol Hill also highlighted a growing concern over the hunt by Chinese companies for U.S. acquisitions, part of a larger rivalry between the U.S. and China that is increasingly being infused with militaristic overtones.
The debate over the CNOOC bid also is putting strains on the many lawmakers who have pushed free trade in recent years but now feel uneasy about China's growing assertiveness.
"I don't think Congress should routinely try to block private-sector deals," Rep. Joe Barton (R-Texas), chairman of the House energy and commerce committee, said in an interview. "But having said that, I do think we need to revise the CFIUS process in light of totalitarian societies manipulating our free markets."
Barton has scheduled a hearing Aug. 19 on the CNOOC bid. A CNOOC spokesman said Wednesday that CNOOC chief executive Fu Chengyu could testify. An American-educated executive fluent in English and with extensive experience in the U.S. oil industry, Chengyu in his appearance would seek to allay some of the political heat building up around bidding contest for Unocal.
To some observers of oil diplomacy, the brouhaha on Capitol Hill over Unocal seems out of proportion to the company's stature in the industry. Unocal's total output amounts to 0.23 percent of global oil production, and its share of U.S. production accounts for 0.3 percent of the oil consumed in the United States, according to the Congressional Research Service.
"We've got 23 suppliers that could more than replace Unocal in the blink of an eye," said Ted Moran, an expert on business displomacy at the Georgetown University school of foreign service. "The U.S. industry has ups and downs before breakfast that are worse than that."
At the armed services committee hearing, the lone speaker who sought to downplay the threat from China argued that China could not afford to take hostile action against the United States because the economies of the two countries are so intertwined.
"The more China invests here, the less likely it is that we will be running into conflicts down the road," said Jerry Taylor, director of natural resources studies at the Cato Institute, a libertarian think tank. "If China had intentions for some sort of Pearl Harbor attack or global confrontation, I rather doubt it would be sinking billions of dollars into the very economy it hopes to destroy."
But Woolsey and other speakers laid out various scenarios by which China might disrupt the U.S. economy, try to exert influence, or even launch attacks ranging from huge electronic pulses that would destroy the U.S. high technology infrastructure to a military raid on Taiwan or elsewhere.
Woolsey likened China's rush into the Unocal purchase to "somebody who's new in a school and is a bit of a bully and decides to give someone who's already in the school a short elbow. This deal is a sharp elbow."
Besides gaining access to Unocal's oil resources in Indonesia, Thailand and elsewhere, CNOOC also might take control of the only U.S. mine that produces rare-earth metals used to guide smart bombs. It might also be able to turn Unocal's technology for oil exploration into dual uses that could benefit China's military, said Frank J. Gaffney Jr., president of the Center for Security Policy, who has waged a campaign against what he sees as China's global ambitions.
Woolsey argued that a congressional action to block CNOOC's proposed purchase of Unocal would send a useful message to China. A recent statement by China's foreign ministry, warning Congress against "meddling" in the takeover, requires a response, he added.
"They've bitten off more than they can chew, and they've shown a bit of braggadocio insulting the U.S. Congress," Woolsey said. "Somebody ought to break their sword."
Hunter told reporters after the hearing that he will propose a bill to block the CNOOC deal, should Unocal dump Chevron and agree to merge with the Chinese company.
"We're looking at all options to weigh in on this transaction," Hunter said.
|Top Chinese general warns US
By Alexandra Harney in Beijing and Demetri Sevastopulo and Edward Alden in Washington
Published: July 14 2005 21:59 | Last updated: July 15 2005 00:03
China is prepared to use nuclear weapons against the US if it is attacked by Washington during a confrontation over Taiwan, a Chinese general said on Thursday.
“If the Americans draw their missiles and position-guided ammunition on to the target zone on China's territory, I think we will have to respond with nuclear weapons,” said General Zhu Chenghu.
Gen Zhu was speaking at a function for foreign journalists organised, in part, by the Chinese government. He added that China's definition of its territory included warships and aircraft.
“If the Americans are determined to interfere [then] we will be determined to respond,” said Gen Zhu, who is also a professor at China's National Defence University.
“We . . . will prepare ourselves for the destruction of all of the cities east of Xian. Of course the Americans will have to be prepared that hundreds . . . of cities will be destroyed by the Chinese.”
Gen Zhu is a self-acknowledged “hawk” who has warned that China could strike the US with long-range missiles. But his threat to use nuclear weapons in a conflict over Taiwan is the most specific by a senior Chinese official in nearly a decade.
However, some US-based China experts cautioned that Gen Zhu probably did not represent the mainstream People's Liberation Army view.
“He is running way beyond his brief on what China might do in relation to the US if push comes to shove,” said one expert with knowledge of Gen Zhu. “Nobody who is cleared for information on Chinese war scenarios is going to talk like this,” he added.
Gen Zhu's comments come as the Pentagon prepares to brief Congress next Monday on its annual report on the Chinese military, which is expected to take a harder line than previous years. They are also likely to fuel the mounting anti-China sentiment on Capitol Hill.
In recent months, a string of US officials, including Donald Rumsfeld, defence secretary, have raised concerns about China's military rise. The Pentagon on Thursday declined to comment on “hypothetical scenarios”.
Rick Fisher, a former senior US congressional official and an authority on the Chinese military, said the specific nature of the threat “is a new addition to China's public discourse”. China's official doctrine has called for no first use of nuclear weapons since its first atomic test in 1964. But Gen Zhu is not the first Chinese official to refer to the possibility of using such weapons first in a conflict over Taiwan.
Chas Freeman, a former US assistant secretary of defence, said in 1996 that a PLA official had told him China could respond in kind to a nuclear strike by the US in the event of a conflict with Taiwan. The official is believed to have been Xiong Guangkai, now the PLA's deputy chief of general staff.
Gen Zhu said his views did not represent official Chinese policy and he did not anticipate war with the US.
Additional reporting by Richard McGregor in Beijing
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