Inventory of fossil fuel extraction projects financed by 
World Bank Group, mid-1992 to present

• ARGENTINA
• AZERBAIJAN

  • Project Profile
  • Pipelines
• BANGLADESH
• BOLIVIA
• CAMEROON
• CHAD

  • Project Profile
• CHINA
• COLOMBIA
• CONGO (Brazzaville)
• COTE D'IVOIRE
• EGYPT
• ETHIOPIA
• GEORGIA
• GUATEMALA
• INDIA
• INDONESIA
• KAZAKHSTAN

  • Country Profile
• MADAGASCAR
• MONGOLIA
• MOZAMBIQUE
• NIGERIA

  • Country Profile
• PAKISTAN
• PAPUA NEW GUINEA
• POLAND
• ROMANIA
• RUSSIA

  • Russia Oil Aid Overview
• TANZANIA
• THAILAND
• TURKEY
• UKRAINE
• VENEZUELA
• ZAMBIA

ARGENTINA

Country overview: The Argentine Petroleum Industry Association predicts that investment in the country's oil industry will total $15 billion from 1994 to 2000. Annual investment from 1996-2000 will be more than double investment from 1986-1990 ($2.3 billion vs. $1.1 billion). Argentina is part of a hydrocarbon boom in South America. In January 1997, Ricardo Aguirre, marketing manager for Petrolera Argentina San Jorge, said that energy demand in the continent will rise 62% by 2010. (Oil Daily, Feb. 12, 1997; Platt's Oilgram News, July 6, 1994)

AZERBAIJAN

Project Profile

Early in this century, Azerbaijan produced more than half of the oil in the world from the shore of the Caspian Sea. After the onshore deposits ran empty, the oil search moved out to sea, and now, the region is "the hottest of the hot spots" in oil exploration, Daniel Yergin, an oil historian, told the Dallas Morning News this year.

The World Bank is involved in promoting the sale, development and export of Azerbaijan's oil fields, most of which lie within a badly polluted part of the Caspian Sea. In addition to the 1995 loan for the restructuring of the Guneshli oil field, the Bank is financing studies for building a massive pipeline from Baku, Azerbaijan, to Turkey via Georgia, and it may finance the actual pipeline construction.

From the production points to the pipeline routes, the quest for Azeri oil is marked by fierce turf battles between corporations and governments. The prize is up to 20 billion barrels of oil reserves in and around the Caspian Sea. In addition, Russia, Kazakhstan, Iran and Turkmenistan also hold considerable reserves in the Caspian (see Kazakhstan section).

G-7 corporations have fond regard for the Azeri government. "You've got a government, from the president down, that understands what it takes to do business with the West," said Robert Ebel, an analyst at the Center for Strategic and International Studies (Washington D.C.) in March 1997.

"Nearly everyone in the oil business around the world knows their way to Baku (capital of

According to the Dallas Morning News, "the Clinton administration's energy policy-makers have worked feverishly behind the scenes to support the efforts of Western companies seeking to unlock the Caspian's oil riches - even though the administration is prevented by law from providing Azerbaijan with a penny of aid because of its simmering conflict with Armenia."

President Clinton's work has helped to ensure that G-7 corporations control the majority of the oil that lies within Azerbaijan. G-7 companies own two-thirds of the oil in the Azeri-Chirag-Guneshli field, one of the world's largest oil reserves. They also own majority shares in at least three other major joint ventures.

* AIOC (Azeri, Chirag and Guneshli fields)

Called "the contract of the century," this first oil exploitation joint venture in Azerbaijan was formed in 1994, when 11 companies created the Azerbaijan International Operating Co. (AIOC). The AIOC will develop the Azeri, Chirag and Guneshli fields in the Caspian Sea at an estimated cost of $7.4 billion. The three fields hold an estimated 4.1 billion barrels of oil, rivalling some of the world's largest reserves.

This venture is 64.6% controlled by G-7 corporations. Investors include: British Petroleum (U.K., 17.1%), Amoco Corp. (U.S., 17%), State Oil Co. Of Azerbaijan Republic (SOCOR, 10%), Lukoil (Russia, 10%), Unocal (U.S., 10%), Statoil (Norway, 8.6%), Exxon (U.S., 8%; purchased 5% from Socar in 1995, 3% from Pennzoil in 1996.), TPAO (Turkey, 6.8%), Pennzoil (U.S., 4.8%), Itochu (Japan, 3.9%), Ramco (U.K., 2.1%), and Delta-Nimr (Saudi Arabia, 1.7%)

G-7 equipment and service suppliers include East-West Helicopters, an Azerbaijan-Canada joint venture; McDock and McShelf, Azeri-US joint ventures for supply bases; and Itochu, which has conducted seismic surveys on the shelf. In addition, Azerbaijan has agreed to have Conoco (U.S.) rehabilitate wells and further develop the Guneshli field.

"Our participation in the Azerbaijan project is a key element in our growth strategy," said Marty Miller, a Unocal vice president, in 1996.

In January 1997, the government of Turkmenistan claimed sovereignty over two of AIOC's three Caspian oil fields. Conoco is also interested in the Guneshli field: it is hoping to develop concessions that are not controlled by the AIOC.

* Karabakh field (CIPCO)

In November 1995, four companies agreed to develop the Karabakh field, which holds between 550 million and 1.1 billion barrels of oil, under a joint venture called the Caspian International Petroleum Company (CIPCO). The $1.7 billion project's investors include: Lukoil (Russia, 32.5%), Agip (Italy, 30%), Pennzoil (U.S., 30%), and SOCAR (7.5%). Ramco (U.K.) claims it has the right to 5.25% of the field.

* Dan-Ulduzu and Ashrafi fields

In 1996, four foreign companies made a deal with SOCAR to explore and develop the Ulduzu and Ashrafi fields, next to the Karabakh field. The corporations in the $1.5 billion deal include: Amoco (U.S., 30% stake), Unocal (U.S., 25.5%), Itochu (Japan, 20%), and Delta-Nimir (S.Arabia, 4.5%).

* Shakh Deniz

In June 1996, British Petroleum, Statoil and Elf (France) signed a production sharing contract for the Shakh Deniz offshore field, which may contain up to 5 billion barrels of liquids.

Pipelines

The initial two pipelines from Azerbaijan's oil fields will run to the Black Sea ports of Novorossiysk, Russia (via Grozny, Chechnya), and to Supsa, Georgia, beginning in August and 1998, respectively. The first oil will flow from the Bank-financed Guneshli field. In December 1996, the AIOC chose seven final candidates for the Supsa pipeline, including Saipem of Italy, which already won the contract for building a pipeline from the AIOC fields (including Guneshli) to the mainland. The pipes are to be supplied by Itochu (Japan).

These smaller pipelines will be supplanted by one or two larger pipelines, for which Russia (via Chechnya) and Turkey (via Georgia) are vying for consideration. The pipeline will handle up to 100 million metric tons of crude annually, and may eventually extend across the Caspian to the Kazakhstan oil fields.

It appears that the World Bank favors the Georgia-Turkey route. In September 1996, the World Bank (IBRD) approved a $5 million loan for technical assistance in support of the proposed Baku to Ceyhan, Turkey, pipeline. G-7 transnationals Shell and Chevron have formed a tentative joint venture to build the pipeline to Ceyhan.

Turkey argues for its proposed Mediterranean port destination as a means of avoiding the crowded and dangerous passage of oil tankers through the Bosporus Strait. "Not a drop of oil will pass through the Bosporus" if the pipeline project goes to Russia, warned Turkey Prime Minister Tansu Ciller in 1995.

In April 1997, the Bank's IDA approved a $1.4 million credit to finance a feasibility study for a pipeline to run from Baku to Supsa. The goal of the study is to "improve Georgia's ability to benefit from oil development in the Caspian region by attracting private investment in the necessary transport infrastructure," according to the Bank.

The Bank is eyeing future financing for the main pipeline, but a Bank official said that it will not finance construction until legal disputes over Caspian oil ownership are resolved.

U.S. President Bill Clinton is said to favor building two pipelines, one to Russia, the other to Turkey. In 1995, he "expressed his support for commercially viable early constructed and multiple oil pipelines from the Caspian Sea region that would benefit the companies that were investing in oil development as well as all the countries of the region," said White House press secretary Mike McCurry.

Sources: Dallas Morning News, March 10, 1997; Journal of Commerce, Feb. 15, Dec. 12, 1996, Jan. 21, 29, and Feb. 5, 1997; United Press International, Oct. 2, 1995, Oct. 22, 24, and Nov. 4, 1996; Inter Press Service, July 30, 1996; PR Newswire, July 30, 1996; World Bank Project Information Document, PID GEPE44830, April 30, 1997; World Bank News, Sept. 19, 1996; Houston Chronicle, Nov. 11, 1995; Offshore, Feb. 1997.; Oil and Gas Journal, Dec. 9, 1996; World Oil, August 1996.

BANGLADESH

In 1993, according to Independent Energy magazine, the World Bank cut its support to Bangladesh because it "had not demonstrated a commitment to opening their markets to private sector participation." These cuts were lifted after Bangladesh opened the power sector to private investment in 1995, beginning with an offer to private investors for ownership and operation of a new 300 megawatt natural gas power plant near Dhaka.

The same year, the IDA agreed to finance the construction pipeline that will tap into Bangladesh's massive gas reserves in the Bay of Bengal and onshore. G-7 transnationals hold significant blocks of these reserves, including Occidental, Unocal, United Meridian Corp. (U.S.), Cairn Energy (U.K.), Halliburton (U.K.) Shell is hoping to get a share of Bangladesh's gas fields, and has offered to provide free technical advice at the Bakrabad gas fields, one of the coupling points of the IDA-financed pipeline. (Independent Energy, Sept. 1996; The Economist, March 22, 1997; AsiaMoney, March 1997; Pipe Line & Gas Industry, Jan. 1997; Oil & Gas Journal, June 10, 1996; Power Asia, June 12, 1995, Sept. 16, 1996; International Gas Report, Apr. 4, 1997)

BOLIVIA

(1) Enron and Shell invested 25% apiece in the transportation sector spin-off, which the new owners named Transredes, for $263 million. The other half of the company is owned Bolivian pension funds (34%) and current and former YPFB employees (16%), which also hold a combined 50% share in the other two spin-offs.

"We are proud to contribute to positioning Bolivia as the natural gas hub of Latin America's southern cone and to the enhancement of the economic integration of the region," said Kenneth L. Lay, chairman and CEO of Enron Corp, on May 19.

Transredes owns great lengths of existing pipelines for natural gas (2,648 kilometers) and oil and liquids (2,300 kilometers). It also holds a 33% share in the $1.7 billion, 3,000 kilometer Bolivia to Brazil natural gas pipeline project. In 1992, the Bank provided Bolivia with assistance in developing a private sector gas pipeline project. Bolivia is creating a network of natural gas pipelines from its fields to neighboring countries.

(2) Amoco purchased a 50% in the Chaco unit for $307 million, which was named Empresa Petrolera Chaco. Chaco is an oil exploration and production company which owns one of the YPFBs two big oil and gas fields. According to Amoco, the new company will intensify natural gas production to feed the Rio Grande, Bolivia to Sao Paolo and Puerto Allegre, Brazil pipeline.

"We're confident our new Bolivia opportunity, combined with our upstream operations in Venezuela, Argentina, Trinidad and Tobago, and Colombia will provide profitable growth that will drive us toward our goal of being the premier integrated petroleum company in the western hemisphere," L. Richard Flury, Amoco's exploration and production executive vice president.

(3) A mostly-Argentine consortium (including Pluspetrol Bolivia, Perez Companc, and YPF - see Argentina section) won a bid for Adina Sam, which owns and operates the other big oil and gas field ($264.8 million). Andina SAM's oil fields produced about one-third of Bolivia's oil and one-quarter of its gas in 1996. (LatinFinance, March 1996; Platt's Oilgram News, Sept. 15, 1992; Pipe Line & Gas Industry, January 1997; Inter Press Service, May 20, 1997; PR Newswire, December 5 and 6, 1996, May 19, 1997; Facts on File World News Digest, Dec. 19, 1996; Houston Chronicle, Dec. 6, 1996)

CAMEROON

CHAD

Project Profile

"Africa's hinterland oil, whose potential is not confined to Chad or Sudan, bears heavy political risks, unlike offshore operations. But it will be the next promised land if the Doba project goes through without hitch." -- Africa Energy & Mining, Dec. 4, 1996

In 1975, amid fighting between rival ethnic groups, U.S. transnational corporation Chevron discovered oil in the Doba region of Chad. ²⁶

Subsequent years of exploration have unveiled an estimated 900 million barrels of high-quality oil in the Doba fields. More oil lies in Chad's Sedegi fields. One of the most impoverished countries in the world is the target of a global oil rush. Exxon is leading the charge, and expects to pump the first oil from Chad in the year 2000. Oil may flow at a rate of over 12 million tons of oil per year from the Doba field (250,000 barrels/day).

John Hervey, an oil analyst with a New York firm, told the Houston Chronicle last November that he thought that current reserve estimates for the Doba Basin are "probably conservative. The deposit is actually enormous. I think it could be multibillion barrels.''

Gordon Barrows, another analyst, agreed: he noticed that the pipeline is surprisingly large. "Obviously, they expect much greater things out of Chad than anybody's talking about.''

Barrows noted the difficulty of developing the oil project in the politically-tense region. "They sure find oil in inhospitable places,'' he said. "You couldn't be in a worse situation. . . . It just seems to be a rule. Oil doesn't seem to be found in any place that seems worth visiting."

The oil production projects, and a 650-mile pipeline project to export the oil via Cameroon's port of Kribi, may receive up to $1 billion in World Bank financing. The Chad oil developments and the pipeline have generated considerable social and environmental concerns.

"A potential environmental and social disaster is planned for central Africa and it is going to be part funded by the taxpayer," said Friends of the Earth campaign director Tony Juniper in May.

One question is how much money from the project will actually reach the people of Chad. Similar projects elsewhere in Africa have hardly boosted the health of many people.

Roy May, director of African Studies at Coventry University (U.K.) told Inter Press Service in May that it is "pretty unlikely" that all of the Bank's money will reach the intended development projects.

The Environmental Defense Fund (U.S.), which has joined Friends of the Earth in a global campaign against the Chad projects, said the both Chad and Cameroon's governments have "a lack of commitment to poverty alleviation." Revenues from Cameroon's offshore oil production have disappeared, said EDF.

"While it's true that the countries have suffered from poor government and civil conflict in the past, it's not necessarily true that they cannot use money well in the future," Andrew Rogerson, World Bank representative for Britain and Ireland, told IPS.

"Anybody who complains (about the project in Chad) does so at their own risk," claimed Inter Press Service in May. "In March the government of President Idriss Deby was accused of torture and extrajudicial executions of government opponents and civilians by the human rights group Amnesty International."

Amnesty said that the project could exacerbate tensions between Doba, a center of rebellion against the president, and N'Djamena. "If an enormous amount of money is generated and displaced people don't see much of it, it is bound to aggravate the situation," said a spokeswoman.

"Many fear the project may create another Ogoniland, the Nigerian oil development debacle," reads a March 12, 1997, editorial by Korinna Horta of EDF in the Journal of Commerce. "The oil companies, which plan to use public assistance from the World Bank and other U.S. taxpayer-backed agencies, would be wise to reexamine the lessons of that disaster... The promise of oil wealth in southern Chad risks reigniting smoldering tensions. According to the State Department's recent human rights report, the governments of both Cameroon and Chad are responsible for serious human rights violations.

"The underground pipeline will pass through ecologically fragile rainforest areas, including one that is home to a Pygmy population of traditional hunters and gatherers. Once development begins, an uncontrollable influx of people in search of work will occur at construction sites. Deforestation, wildlife poaching and the loss of local village farm land will likely result..... As in Nigeria, the people of Chad and Cameroon may derive little or no benefit from oil development, and may instead turn on both the oil companies that take over their environment and the governments that enable the development," concluded Ms. Horta.

Barrows said the area's political turmoil should not impact Exxon, Shell and Elf's investments. Any government in Chad "can't screw it up. It will be such a mainstay of the economy, any oil company would have to be treated with kid gloves, even if a new president shoots his way to the top."

For more information about this project, see Korinna Horta, Environmental Defense Fund, "Questions Concerning The World Bank and Chad/Cameroon Oil and Pipeline Project: Makings of a New Ogoniland? Corporate Welfare Disguised as Aid to the Poor?" (EDF, Washington, D.C., March 1997.)

(Africa Energy & Mining, March 5 and May 7, 1997; Platt's Oilgram News, Nov. 25, 1996, Energy Alert, June 14, 1996; Houston Chronicle, Feb. 5, 1995; Inter Press Service, May 15, 1997; Journal of Commerce, March 12, 1997; Reuters, Nov. 28, 1980)

CHINA

COLOMBIA

CONGO (Brazzaville)

COTE D'IVOIRE

EGYPT

ETHIOPIA

GEORGIA

GUATEMALA

INDIA

INDONESIA

KAZAKHSTAN

Country Profile

In October 1993, World Bank economist Bernard Funck said that Kazakhstan "has stable institutions, skilled workers and vast natural resources. It is a country that is taking the right steps toward becoming a more stable, market- oriented economy."

In March 1997, the Middle East Review World of Information reported that "President Nursaltan Nazarbayev has eschewed western models of democratic development, preferring to follow the example of the 'tiger' economies of south-east Asia, where economic liberalism and political authoritarianism go hand-in-hand.... President Nazarbayev, who has ruled Kazakhstan since independence, has limited patience with democracy - if parliament fails to do his bidding he dissolves it. After dismissing the assembly for the second time in February 1995, fresh parliamentary elections were held in December 1995. The election was again marred by irregularities."

The rapid sell-off of Kazakhstan's oil and gas sector has prompted an "anti-privatization" push by many oil workers.

Workers at the Mangistaumunaigaz enterprise, said opposition parliamentarian Zamanbek Nurkadilov, oppose a planned privatization because "nowhere is it written that foreign investors should continue with social programs."

"There is a view in the oil sector that the government is giving too much away," an unnamed "Western analyst" told East European Energy Report in February 1997.

"There have been widespread accusations of corruption, coercion and chaos amid the breakneck speed of the sales," reported EEER in November 1996.

In April 1997, according to EIU Business Russia, "The Kazakh government announced that Essex Refinery Corporation, an obscure company registered in the British Virgin Islands, had lost the right to its 53.1% stake in the Atyrau refinery barely two weeks after winning the tender. Essex had failed to meet its promises, Almaty declared, which will not surprise those who wondered how Essex would find the $1bn it pledged in investment. The episode underlined the dangers of Kazakhstan's frantic pace of privatisation--too often, neither the government nor investors are taking sufficient time to vet the other. But the need for quick cash on the Kazakh side, and the hunt for a bargain on the part of investors, continues to propel the selling spree forward."

Akshabulak Fields

In 1996, production began in the oil field, and a Canadian company took over a 50% Kazakhstan-based investment in the project. At the same time, the Bank extended an additional loan to the oil field development. In August, Hurricane Hydrocarbons won a $120 million bid to purchase 89.5% of the equity of Yuzhneftegaz. When Hurricane Hydrocarbons purchased Yuzhneftegaz , it suddenly became Canada's biggest oil company. Yuzhneftegas held over 300 million barrels of oil reserves in 1996.

Oil from the Akshabulak, Nuraly and Aksay fields covered by the Bank's 1996 package is slated to be exported to a refinery in Germany.

Uzen Field

Shortly after the Bank extended the loan, the government of Kazakhstan offered Uzenmungai up for sale. Amoco, Unocal (U.S.)/Petronas (Malaysia) and the China National Petroleum Corp. are the three finalists for field ownership bids. Amoco offered $636 million over five years, the CNPC offered $1 billion over five years, and the Petronas/Unocal joint bid offered $531 million, rising to an eventual $1.3 billion. The government said it would announce the winning bid in late May 1997.

Other Privatized Pieces of Kazakhstan's Oil and Gas Industry

(Business Intelligence Report World of Information, October 1996; East European Energy Report October 1993, July 26, 1996, Nov. 18, 1996, February 1997; EIU ViewsWire, Oct. 9 and Dec. 20, 1996, January 21, 1997; Financial Times, April 10, 1997; EIU Business Russia, April 10, 1997; Platt's Oilgram News, Aug. 14 and Nov. 1, 1996 and March 13, 1997; Middle East Review World of Information, March 1997; Reuter European Business Report, May 12, 1997; Deutsche Presse-Agentur, June 29, 1994, July 3, 1996; BizEkon News, May 1, 1995; Reuters, June 29, 1994; Canada NewsWire, Aug. 29, 1996; Oil Daily, Oct. 14, 1994, Aug. 9 and Sept. 30, 1996; Hart's Daily Petroleum Monitor, September 23, 1996; Economist, Feb. 15, 1997; HazNews, Aug. 1, 1996)

MADAGASCAR

MONGOLIA

MOZAMBIQUE

The Mozambique privatization deal followed intensive lobbying by U.S. embassy officials on behalf of Enron. "Elements of the embassy did a bit of lobbying for the company, which I find a bit strange, because this is a commercial agreement," said Mozambique's Minister of Energy Resources, John Kachamila, who added that he was "told that other aid to Mozambique might be in jeopardy if this agreement was not signed."

"It was a little more nuanced than that,'' an unnamed Clinton administration official told the New York Times. "It is difficult to say we should give Mozambique $40 million a year, if it's going to take an opportunity for a $700 million project and not do it."

Enron wants to build a $700 million, 900 kilometer pipeline from the Pande field to a direct reduced iron (DRI) steel plant in South Africa. The pipeline and steel plant might receive World Bank funding in the future.

According to Africa Energy & Mining magazine, "With the help of the Mozambican government, Enron began to negotiate with state-owned Industrial Development Corporation (IDC) to construct a 2.5 billion rand ($573m) DRI plant in South Africa's Northern Province. But AEM understands that Enron irked IDC by trying to push it into a quick decision."

Enron and the Mozambique government also plan to ship magnetite from the Phalaborwa steel mine to Maputo via a pipeline that would run through South Africa's renowned Kruger National Park. According to an April 1997 report from the U.S. embassy in Pretoria, "fears are being expressed by environmental groups that the project may be at an advanced stage and that the public is only now becoming aware of the implications."

(International Gas Report, February 19, 1993; Africa Review World of Information, February 1997; Africa Energy & Mining, Nov. 15, 1995, Feb. 28 and July 10, 1996, Jan. 22, 1997; Oil Daily, Oct. 18, 1994; U.S. Embassy report in International Market Insight Reports, April 8, 1997; New York Times, Dec. 27, 1995)