Bridas and Unocal still fighting over Turkmenistan-Pakistan pipeline

Dec 08, 1997 01:00 AM

Nov. 5, 1997 Hearings are still going on in a lawsuit of Argentine oil and gas firm Bridas S.A.. against Unocal Corp.
The case -- in which Bridas is seeking $ 15 bn in damages -- centres on the Argentine firm's allegations that Unocal interfered in its operations in the former Soviet republic of Turkmenistan. Those operations include plans to build a natural gas pipeline from Turkmenistan through war-torn Afghanistan to the growing energy market in Pakistan, for which it originally had exclusive negotiating rights.
Bridas still says it intends to move ahead with the project, despite the fact sources say its relations with the Turkmen government are now almost non-existent, and even though Unocal has signed a deal to build a rival $ 2 bn gas pipeline running from Turkmenistan to Pakistan.
Unocal wants the suit dismissed on the grounds that Turkmenistan and Afghanistan -- rather than the United States -- should have jurisdiction over the case.
Bridas, meanwhile, argues that Unocal's Sugarland, Texas, offices near Houston - - the headquarters of its international new ventures group -- justify the venue. Moreover, when the suit was filed back in February 1996, one of the defendants -- who has since been dropped as a defendant -- worked at the Sugarland offices.
If Unocal's motion to dismiss is denied, the case will be heard in early March.
In the suit, Bridas charges that while its officers were negotiating with Pakistan on behalf of the Turkmen oil and gas ministry -- which had hired Bridas to help draw up a feasibility study on the pipeline -- Unocal was secretly contacting the Turkmen deputy prime minister for oil and gas about its own pipeline plan.
According to a Bridas source, the Turkmen government then made an overnight decision to cut off the export of oil from Bridas' Keimir field on the Caspian Sea.
The company also alleges that the deputy prime minister demanded that Bridas, with its cash flow strangled, renegotiate its concession. "We found written evidence that Unocal was behind the curtains," the Bridas source said.
Rebutting the charges, a Unocal lawyer said Bridas' difficulties with the Turkmen government started long before Unocal came on the scene. Furthermore, he said, Unocal said nothing bad about Bridas and didn't do anything to scuttle its projects.
The lawyer added that his company remains open to a settlement, including allowing Bridas into the Unocal-led CentGas consortium that signed the agreement to build a 790-mile gas pipeline running from Turkmenistan to Pakistan via Afghanistan.
Unocal has a 46.5 % stake in the 2 bn cfpd project, along with Saudi Arabia's Delta Oil Co. with 15 %, Pakistan's Crescent Group with 3.5 %, and the Turkmen government with 7 %.
CentGas lacks an Afghan participant. Unocal says it is waiting for a recognised government to establish control, rather than ally itself now with any of the warring factions.
The chief of Bridas' Afghan operations, meanwhile, said earlier this week that his company was close to signing a pipeline agreement with the Taliban, the Islamic movement that controls large parts of Afghan territory, including virtually all the proposed pipeline route. He said Bridas would start construction as soon as the deal is signed.

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