in Sudan and at an Al Qaeda training camp in Afghanistan.
“It didn’t take us five minutes to know that it was all over,” said Unocal’s John Imle. “We were in regular contact with the U.S. embassy in Pakistan, and no one had ever said anything about terrorism. But now we understood what Bin Laden was doing in Kandahar.” Imle called Unocal’s chief representative, who happened to be on vacation in the United States, and told him to forget about going back to Islamabad, Pakistan, let alone to Kandahar. It was too dangerous for any U.S. businessman promoting a project that so clearly was anathema to the Taliban. A few months later, instead of starting construction, Unocal declared that it was withdrawing altogether from the project.
Thus, TAP and CAOP were finished before they started. A project that would have opened a wholly new route for Central Asian resources to the great growth market of Asia was never to be. The moon shot never got off the ground. It was aborted before launch by the Taliban and its ally, Al Qaeda, both armed with a militant ideology and a version of religion that was determined to return to the middle ages. 17
What happened in the 1990s—with the offshore field in Azerbaijan and the Baku-Tbilisi-Ceyhan Pipeline, and Tengiz and the Caspian pipeline—was very significant for the supplies they brought to the markets. Today the total output of Azerbaijan and Kazakhstan is 2.8 million barrels of oil—equivalent to more than 80 percent of North Sea production, and four times what they were producing a little more than a decade earlier. But these deals were significant as turning points—for the way in which they redrew the map of world oil, for their geopolitical impact, for the consolidation they provided to the newly independent states, and for the way in which they reconnected the hydrocarbons of the Caspian to the world economy—on a scale that could never have been imagined during the first great boom a century earlier.
More than a decade later, Turkmenistan is still negotiating with Western companies over the development of its natural gas resources. Pakistan is struggling with a domestic Taliban insurgency. And NATO forces, primarily American, are fighting in Afghanistan.
4
“SUPERMAJORS”
Asia had been the target market for TAP and CAOP—the “pipelines that never were.” For Asia was booming. But in July of 1997, one of the most buoyant of the economies, that of Thailand, was slammed by a financial crisis that threatened to destroy much of the country’s recent economic progress. Soon the crisis spread, threatening the whole region and the entire Asian Economic Miracle, with far-reaching impact on global finance and the world economy. It would also detonate a transformation in the oil industry.
THE “ASIAN ECONOMIC MIRACLE”
The title of a popular business book, The Borderless World, captured the abounding optimism about the process of globalization in the 1990s that was knitting together the different parts of the world economy. World trade was growing faster than the world economy itself.1 Asia was at the forefront. The “Asian tigers”—South Korea, Taiwan, Hong Kong, and Singapore, and behind them the “new tigers” of Malaysia, Indonesia, Thailand, and the Philippines, plus China’s Guangdong Province—were emulating Japan’s great economic success.
The Asian Economic Miracle was providing a new playbook for third world economic development. Instead of the inward-looking self-sufficiency and the high trade barriers that had been the canon of development in the 1950s and 1960s, the “tigers” embraced trade and the global economy. In turn, they were rewarded with rapidly rising incomes and remarkably fast growth. Singapore was a beleaguered city-state when it gained independence in 1965. By 1989 its per capita GDP, on a purchasing power parity basis, was higher than that of Britain, which, as the birthplace of the Industrial Revolution, had a twohundred-year head start. Asia also became the foundation for “supply chains,” extending from raw materials to components to final goods. The world was truly being knit together in ways not imagined even a decade earlier.
The high growth rates in Asia meant rising demand for energy, and, specifically, for oil. These countries became the growth market for petroleum, and there was every reason to think that this Asian economic growth would continue at its fevered pace.
JAKARTA: “OPEC’S ECONOMIC STARS”
OPEC petroleum ministers convened for one of their regular sessions in Jakarta, Indonesia, in November 1997. Asia’s buoyant prospects were much on the minds of the delegates. Many of them were considering how to reorient their trade more to the East. Here, after all, it