Saturday, August 9, 2008

Uighuristan, Part 2

In Part 1, we briefly reviewed a terrorist event that occurred in Xinjiang, China.

Xinjiang is a region in Northwest China, a province which borders Kazakhstan, Kyrgyzstan, Tajikistan, a tiny strip of Afghanistan, and an area disputed between India and Pakistan, as well as sharing a short border with the Russian Federation and an extensive border with Mongolia. Xinjiang is home to the ethnic Uighur people, and is known as the Xinjiang Uighur Autonomous Region (XUAR).

The Uighur people are Muslims. China is, of course, a Communist country, and the Chinese Communist Party (CCP) has tried very hard over the years to suppress not just Islam, but any religious or political belief or philosophy that it views as a potential threat.

In Part 1, with reference to the recent terrorist attack, I commented that I smelled a rat. We will now begin sniffing around for the rat, and specifically, I will begin with the quotation from a paper that came at the very end of Part 1. From Devastating Blows: Religious Repression of Uighurs in Xinjiang, an April, 2005, Human Rights Watch report:

China is known for tight constraints on freedom of religion. This is particularly evident in its northwest Xinjiang Uighur Autonomous Region (XUAR), an oil-rich area that borders eight other nations. Here the Muslim faith of Uighurs, the largest non-Chinese ethnic group in the region, is under wholesale assault by the state. Uighurs have enjoyed autonomy in the past. Many now desire greater autonomy than is currently allowed; others demand a separate state. Uighurs are thus seen in Beijing as an ethno-nationalist threat to the Chinese state. Islam is perceived as feeding Uighur ethnic identity, and so the subordination of Islam to the state is used as a means to ensure the subordination of Uighurs as well.

It is significant that the XUAR is considered an oil-rich area, and that it borders so many other countries, in particular bordering a region that has been the scene of a great deal of unrest and that has been the source of most of the world's narcotics.

This separate state that is mentioned, East Turkestan (or Turkistan), is understandably of concern to the government in Beijing. Of course, the legitimacy of Beijing's rule over some places, notably Tibet, is questioned internationally, to say the least. Still, an independence movement of separatists in an area that Beijing considers under its authority is an understandable concern, especially in light of what has been happening in the Balkans, especially regarding Kosovo's declaration of independence from Serbia. We have addressed this previously: see Another Domino Falls and especially The Ramifications of Kosovo.

Notice in the above quote Beijing's perspective on Islam among the Uighur people.

Let us key in for a moment on the comment that the XUAR is "an oil-rich area".

On March 25, 2005, there appeared this article, China starts work on Kazakhstan-China oil pipeline:

Construction began on the 240-kilometer Chinese section of the Kazakhstan-China oil pipeline Wednesday in Jinghe county in the Xinjiang Uygur Autonomous Region, according to sources with China National Petroleum Corp. (CNPC), China's biggest oil producer.

The Xinjiang section will form part of a 3,000-kilometer pipeline from the oil-rich Caspian shelf to China, which will carry oil across eastern Kazakstan into China's Xinjiang autonomous region, where it will be refined or sent directly to China's booming east.

The pipeline, which will cost three billion US dollars, began construction last year. It will link Atasu in Kazakhstan to Dushanzi and is China's first major land oil import route.

A CNPC staff member said the cross-border oil pipeline, with 2,800 kilometers in Kazakstan and 240 kilometers in China, is expected to be completed on December 16, 2005. It will be able to carry 20 million tons of oil per year.

Oil analysts say the pipeline will benefit both countries. China can get stable and secure crude oil supply, while Kazakhstan will have a reliable oil market.

Construction on the Kazakhstan section of the oil pipeline began in September and will be completed in 2005. Kazakhstan is the world's third largest oil producer. The country plans to raise its annual crude production to 100 million tons by 2010.

Three Chinese factories are principally responsible for supplying the pipe. China-made pipes have been shipped to Kazakhstan since last winter.

China's imports of Kazakh oil now travel hundreds of kilometers by rail to Xinjiang.

That pipeline opened on July 12, 2006. From Kazakhstan-China oil pipeline opens to commercial operation:

Crude oil from Kazakhstan poured into a petroleum tank in Alataw pass, Northwest China's Xinjiang Uygur Autonomous Region at 18:45 Tuesday through a cross-border pipeline, marking the beginning of the commercial operation for China's first direct oil import pipeline.

Experts say the move will help enhance China's oil supply and provide an ideal outlet for Kazakhstan's oil export.

Currently, the oil flux is only around 120 cubic metes per hour due to the valve failure in a Kazakhstan, Zhu Minjie, a customs officer at the Alataw Pass told Xinhua.

It will take 15 days to fill up the 50,000-cubic-meter oil tank before the oil is piped to Dushanzi in Karamay where the country's largest oil refinery plant will become operational in 2008 to produce 5.5 million tons of refined oil a year, said Zhu.

The 960-km pipeline was jointly developed by the China National Petroleum Corporation (CNPC) and the Kazakh state energy company, Kazmunaigaz and it is designed to transmit 20 million tons of oil a year, 15 percent of China's total crude oil imports for 2005.

The first phase of the pipeline will transmit 10 million tons of oil a year, a figure that will double when the entire project is completed in 2011. The total length of the pipeline would then be around 3,000 kilometers.

China has set up an oil meterage station at the Alataw Pass, from where the crude oil from Kazakhstan enters China.

Industry insiders say construction of the oil pipeline is a win-win strategy for both countries as it will hopefully ease China's energy dearth and provide an ideal destination market for Kazakhstan's rich oil resources.

China is an economically rapidly-growing, rapidly-industrializing nation, and its demand for fossil fuels is growing by leaps and bounds. And, of course, a secure method of bringing Central Asian or Caspian Sea oil to market is certainly a plus for the parties concerned, considering the instability in Afghanistan and the saber-rattling with reference to Iran -- a nation that, in any case, may not seem motivated to help move a competitor's oil. As the article continues, we get some statistics:

It has provided a direct link between Kazakhstan's rich oil resources and China's robust oil consumer market, said Yin Juntai, deputy general-manager of China Petroleum Exploration and Development Company.

Kazakhstan's crude oil output topped 50 million tons in 2002, the most recent time that data is available from here, and about 70 percent of its oil is exported. With huge reserves in the Caspian Sea, insiders say the country's oil output will top 100 million tons by 2015.

The new oil shipping route will link Chinese consumers with the oil fields of the Caspian Sea, as well as alleviate China's excessive reliance on the Strait of Malacca, a traditional route for 80 percent of China's imported oil, said Yin.

Last year, China's crude oil import totaled 127 million tons, about 40 percent of its total consumption. About a half of China's oil import came from the Middle East and only 1.3 million tons was imported from Kazakhstan, via Alataw Pass, in 2005. Insiders predict that the figure will climb to 4.75 million tons this year and to around 8 million tons in 2007.

China and Kazakhstan started energy cooperation in 1997, marked by an intergovernmental agreement covering diverse means of collaboration in oil and gas fields, including an oil pipeline between western Kazakhstan and China's Xinjiang.

The transnational pipeline, extending 962.2 km from Atasu in Kazakhstan to the Alataw Pass of Xinjiang, was completed in November 2005 at the cost of 700 million U.S. dollars and China has also completed laying a 252-km oil pipeline between Alataw Pass to Dushanzi.

China produced 182 million tons of crude oil in 2005, a figure experts say will climb up to 195 million tons by the end of 2010.

More context for the role played by the XUAR can be found in the following article, entitled Xinjiang plans to be China's top oil producer, dated June 14, 2005:

Xinjiang Uygur Auto-nomous Region plans to overtake Northeast China's Daqing to become the country's largest oil production area in the next few years, said a top local government official Monday.

It's not just oil transiting the XUAR -- the XUAR is an oil-producing region, as well, making it a key node in the PRC's energy network.

The region, currently China's third largest oil producing area, plans to more than double its oil production to 50 million tons in the near future from 22 million tons last year, according to Ismail Tiliwaldi, chairman of the region.

In the long run, the region is expected to be pumping 100 million tons of crude oil a year, or nearly 60 per cent of China's total last year, he said in an interview with Beijing-based media, including China Daily. The targets, if realized, will help China greatly offset the slowing production of its senior oilfields in eastern areas.

As oilfields such as Daqing which accounts for one third of China's oil production become depleted, the central government is pinning its oil hopes on vast virgin fields in Xinjiang to boost production. Xinjiang sits on 30 per cent of the nation's total oil reserves and 34 per cent of its natural gas resources, said the chairman.

Indeed, the XUAR is not just a key node, but a very critical node in China's economic future!

He vowed to further expedite oil exploration in potential areas, including Karamay, Turpan Basin and Tarim Basin.

The oil and gas industry accounted for 60 per cent of the incremental industrial value of Xinjiang last year.

Thanks to the growth of the oil and gas business, and the central government's financial support, Xinjiang has maintained a gross domestic product growth of more than 10 per cent annually for the past two years, well exceeding the national average.

The region's economic prosperity has underpinned its social stability.

No terrorist attacks have been reported in Xinjiang in the past two years, he said.

'"No terrorist attacks" -- that was 2005, and that, of course, has changed.

The tourism industry has not missed this recent stability. More than 300,000 foreign tourists visited Xinjiang last year, a jump of 87 per cent from 2003. And more than 12 million domestic travellers made their way to the region in 2004, bringing in revenue of 10.9 billion yuan (US$1.3 billion).

The chairman said the overall situation in Xinjiang was very good and all ethnic groups in the region were benefiting from the recent prosperity.

And the XUAR is a beautiful place. Other considerations not being a factor, it would be well worth the visit.

But, of course, other considerations are a factor, and there is now a renewed terrorist threat.


As Uighuristan continues, we will learn more about the XUAR's role in China's calculus of oil.

No comments: