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Last Updated: Thursday, 9 October, 2003, 10:25 GMT 11:25 UK
UK oil firm targets Afghanistan
By Briony Hale
BBC News Online business reporter

Building work in Afghanistan
Afghanistan's collapsed economy is in dire need of invigoration
UK firm Premier Oil is weighing up oil and gas exploration opportunities in Afghanistan, BBC News Online has learned.

Patrick Bird, the chief executive of Premier's Pakistan operations, has visited Afghanistan's western province of Jowzjan and discussed potential business opportunities with senior officials and Afghan gas companies.

Local television reported Mr Bird as saying Premier was in Afghanistan to study and survey natural gas and oil fields.

"We hope to play an active and important role in exploiting oil and gas reserves and in the revival of relevant projects," Afghan Jowzjan Province television reported Mr Bird as saying.

A Premier Oil spokesperson denied the company had been in Afghanistan.

When presented with evidence of Mr Bird's trip, the company confirmed it had taken place but described it as "an unofficial visit" and said the company had no plans to invest in Afghanistan.

The visit was facilitated by the British embassy, and the British charge d'affaires, Rowan Laxton, accompanied Mr Bird on his trip.

Mr Laxton would not comment on Premier Oil or business prospects for other British firms in Afghanistan.

Risk profile

Premier has a record of investing in high-risk areas, generally off the beaten track and avoided by multinationals. It has operations in Albania, Guinea Bissau and Pakistan.

Earlier this year it pulled out of Burma, three years after the UK Government took the unprecedented step of directly asking Premier to withdraw because of the country's poor human rights record.

Interest in oil and gas projects in Afghanistan has usually focused on the country's potential as a transit route, as part of a larger project to take gas from energy-rich Turkmenistan to Pakistan and India.

But there are also unsubstantiated reports that the country has significant gas reserves.

Soviet Union authorities in the 1970s estimated Afghanistan's proven and probable gas reserves at up to five trillion cubic feet (141.5bn cubic metres).

Gas output peaked at 385 million cubic feet a day at the end of the 1970s, according to the US department of energy.

Since then, however, the country has been torn apart by civil war and experts say there has been little or no further work undertaken to estimate the country's potential as an oil and gas producer.

South Asian demand

Afghanistan's interim government has been keen to attract foreign investment, hoping this will invigorate the collapsed economy.

Mr Laxton was quoted as saying that the Afghan economy could be given a boost if the country's natural resources are exploited.

"We hope this company [Premier] together with Jowzjan officials, will take essential and effective steps towards the rehabilitation of gas and oil reserves," he told Afghan television.

Experts say the viability of drilling for gas or oil in Jowzjan rests on the economics of getting the gas to market: Afghanistan itself is unlikely to have sufficient demand for the gas.

Pakistan, however, has a gas shortfall of about one billion cubic feet a year and expects demand for gas to grow by about 6% a year.

India and Bangladesh are among other countries in the region hungry for more gas.


SEE ALSO:
Central Asia pipeline deal signed
27 Dec 02  |  South Asia
Afghanistan woos businesses home
06 Nov 02  |  Business
Premier Oil delays restructuring
25 Mar 03  |  Business


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