Unocal Corp. has withdrawn from a multinational consortium and its controversial proposal to build a $4.4-billion pipeline across Afghanistan, saying low oil prices made the project too costly.
The Central Asia Gas Consortium was formed to build a 1,005-mile pipeline that would carry oil and natural gas from Turkmenistan to Pakistan, cutting across Afghanistan. The project has been criticized by feminist and human rights groups, who contend that Afghanistan’s ruling Taliban militia has persecuted women and gays.
Barry Lane, a spokesman for El Segundo-based Unocal, said the move is part of a general cost-cutting campaign to offset low worldwide oil prices and not a result of political pressure.
“It’s mainly a withdrawal from the central Caspian region due to a lack of good, quality investment opportunities that has been exacerbated by low oil prices,” he said.
“We consider this to be a big victory,” said Kathy Spillar, national coordinator for the Feminist Majority. “It shows with public opinion loud and clear that corporate America has to respond.”
Unocal had earlier said it would not begin work on the pipeline until Afghanistan had a government that is recognized by the United States and the United Nations.
The project will probably collapse without the lead consortium member, Unocal, analysts said. Other participants are the Turkmenistan government, Delta Oil Co. of Saudi Arabia and several Asian companies.
Last week, Unocal withdrew from a similar project to build a pipeline from the Caspian region into Turkey, Lane said. The company will maintain its role in yet another project that involves building a pipeline westward from an area near the Caspian Sea, he said.