- The Washington Times - Thursday, July 21, 2005

VIENNA, Austria — Iran, Sudan, Venezuela, Syria — nations shunned by Washington as nuclear threats, insurgent havens or human rights violators — increasingly are be

ing wooed by China and India in a race for oil and influence that is challenging the United States on the energy and security fronts.

The most recent U.S. concerns have focused on China’s bid for Unocal Corp., America’s ninth-largest oil company. Congressmen, senators and former CIA Director R. James Woolsey have described the bid as a threat to U.S. national security.

But less high-profile maneuvers by the two Asian powerhouses also are raising questions.

Besides their involvement in energy projects worth billions of dollars in countries the United States views with concern, India and China have bought into Russia’s oil and gas sector. And Beijing, with Moscow’s apparent blessing, is reaching out to energy-rich former Soviet republics in Central Asia, where the United States has military outposts.



As their reach grows, India and China are receiving increased attention in Washington.

President Bush said this week that the U.S. relationship with China is “a good relationship, but it’s a complex relationship.”

Mr. Bush also feted Indian Prime Minister Manmohan Singh at the White House in clear recognition of his country’s growing significance.

The all-out energy offensive by the two Asian powers was documented this year by the National Intelligence Council, the U.S. government think tank that advises the CIA and senior U.S. policy-makers.

“The likely emergence of China and India as new major global players … will transform the geopolitical landscape,” said the report, titled “Mapping the Global Future.”

“In the same way that commentators refer to the 1900s as the ‘American Century,’ the early 21st century may be seen as the time when some in the developing world, led by India and China, come into their own.”

The report also predicted that energy demand through 2020, especially by India and China, “will have substantial impacts on geopolitical relations.”

Skewing alliances

In Asia’s former Soviet republics, such moves threaten to hurt U.S. interests by skewing alliances in a key part of the world on the doorstep of the oil-rich Caspian basin and close to Iraq and Afghanistan.

The need for a U.S. military toehold — established during the Afghanistan offensive in late 2001— is being questioned by the governments of Uzbekistan and Kyrgyzstan.

The Uzbek Foreign Ministry said last month that except for overthrowing Afghanistan’s Taliban regime, “any other prospects for a U.S. military presence … were not considered by the Uzbek side.” And a week ago, Kyrgyz President Kurmanbek Bakiyev said it was time to “begin discussing the necessity of the U.S. military forces’ presence.”

The Shanghai Cooperation Organization, a regional alliance led by China and Russia, called on the United States this month to set a date for withdrawing forces from the two ex-Soviet republics. Air Force Gen. Richard B. Myers, chairman of the U.S. Joint Chiefs of Staff, called it an attempt to “bully” the two U.S. allies — an accusation Moscow rejected.

Strategic maneuvering has always been a part of world rivalries, and most nations aren’t that choosy — Saudi Arabia, the world’s largest oil producer, remains crucial to Washington despite its human rights record. But the imperative of making friends with energy-rich nations has grown in the past two years as oil prices rise and consumption increases.

Much of the oil — a third of the world’s output — is pumped by the Vienna-based Organization of Petroleum Exporting Countries (OPEC), whose powerhouse is Saudi Arabia.

But billions of barrels of the world’s reserves are in countries hostile to the United States, such as Iran, OPEC’s No. 2 oil producer, where U.S. sanctions have locked out American oil companies. Billions more are in countries and regions with uncertain loyalties.

These countries “are a magnet for oil-hungry countries,” said Michael Klare, author of “Blood and Oil: The Dangers and Consequences of America’s Growing Petroleum Dependency.”

Chinese oil demand is second only to that of the United States, and within 20 years, China’s needs are expected to rise to 21 million barrels a day. That is what the United States consumes now — and most of it will be imported. India’s oil consumption in the same period is expected to double to 5.3 million barrels daily — also mostly imported.

Mr. Klare said China’s worries about U.S. dominance in the Persian Gulf, and the Strait of Hormuz through which the tankers pass, hastened its scramble for oil rights elsewhere.

“Right now, they get most of their oil from the … Gulf countries, but they are fearful that if the U.S. closes the Strait of Hormuz, then China would be starved of oil.”

Beijing also is casting a wider oil net because the U.S. presence in Iraq — thought to have the world’s second-largest oil reserves — has derailed Chinese attempts to establish a toehold there.

Foreign investment up

Chinese and Indian investments in countries and regions of U.S. concern include:

• A 50 percent Chinese stake in the sprawling Yadavaran oil fields of Iran, which the United States accuses of trying to make nuclear weapons. The Chinese last year also signed deals worth an estimated $70 billion for 250 million tons of Iranian liquefied natural gas.

• Majority Chinese control in the consortium dominating the oil industry of Sudan, which once sheltered terrorist Osama bin Laden and whose government is accused of human rights abuses linked to massacres in the Darfur conflict.

• Chinese ownership of 60 percent of a major Kazakh oil and gas enterprise, and plans to build a pipeline to China for Kazakh crude.

• India’s multibillion-dollar project to pipe in Iranian gas via Pakistan — a plan criticized this month by U.S. Secretary of State Condoleezza Rice.

• Billion-dollar investments by India’s main oil and gas enterprise in far-flung projects that include Syria — accused by Washington of failing to prevent insurgents from crossing its border into Iraq and of suppressing democracy in Lebanon. India also has signed a pipeline deal with gas-rich Burma’s military junta.

• Chinese and Indian interest in Venezuela, the fourth-largest U.S. oil supplier, whose president, Hugo Chavez, is a critic of U.S. foreign policy. Mr. Chavez is trying to rewrite concessions to U.S. oil companies and has invited China and India to participate in oil exploration.

Both Beijing and New Delhi deny that their efforts constitute a threat to the United States.

Alluding to concerns about Iran, the Chinese Foreign Ministry told AP, “China’s development of friendly relations with another country … won’t harm any other country’s interests.” A ministry statement said Beijing is “devoted to developing constructive and cooperative relations with the United States.”

And Sanjaya Baru, the Indian prime minister’s media adviser, said the pipeline is nothing more than a “bilateral issue between … India and Iran.”

Still, such alliances have resulted in some U.S. setbacks.

Washington is thought to have used its influence with Panama in past years to reduce Chinese access to the Panama Canal. But China last year signed a deal with Venezuela and neighboring Colombia for a pipeline to bypass the canal and ship Venezuelan oil directly to Colombia’s Pacific outlets for loading onto Chinese tankers.

Iran, whose nuclear ambitions are among Washington’s greatest security concerns, also is reaping benefits beyond the cash and energy-related expertise provided by China and India.

China has U.N. veto

Chinese sales of anti-ship missiles and other military hardware to Iran have been documented by U.S. authorities and international nongovernmental agencies. They also have drawn repeated U.S. sanctions — most recently last year against eight Chinese companies accused of selling missile technology to Tehran.

China, for its part, has hinted that it would block any U.S.-led attempt for United Nations Security Council sanctions on Iran over the nuclear issue, saying it “does not support referring the Iranian nuclear question to the Security Council.”

Gary G. Sick, a member of the National Security Council under President Carter, said sanctions on Iran effectively means embargoing Iranian oil.

“The Chinese approving a resolution that imposes a sanction on [Iran’s] oil — I don’t see it happening,” he said.

AP writers Joe McDonald in Beijing, Rajesh Mahapatra in New Delhi, Henry Meyer in Moscow and Brad Foss in Washington contributed to this report.

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