Southeast Asian Resources The Oil Beneath Indochina

PACIFIC News Service (DNSI)-Recently declassified Air Force testimony before the Electronic Battlefield Subcommittee of the Senate Armed Forces Services Committee suggests that a major reason for the recent invasion of Laos by South Vietnamese and American military personnel is the destruction of a petroleum products pipeline running out of North Vietnam just north of the DMZ into Southern Laos.

The existence of the pipeline was disclosed in Senate testimony before the Committee on November 18, 1970, by Brig. Gen. William John Evans, though the details of the diameter and length were not revealed. This pipeline would appear to have played an important part in the North Vietnamese troop movements along the Ho Chi Minh Trail, supplying an estimated 3,000 six-wheel heavy Russian trucks with fuel. The Air Force disclosed that within the last two and one-half years the portion of the trail open to trucks in the dry season has been extended from 350 to 1,550 miles.

The terminal point for the pipeline lies somewhere in the vicinity of Tchepone, a key depot along the diverse network of roads and supply routes running from North Vietnam into South Vietnam and Cambodia. Repeated bombing over the past four years has failed to halt the flow of material through these Laotian "sanctuaries."

While oil may be important for understanding the motivation for the invasion of Laos, it also appears to be assuming greater importance in the formation of overall war policy for Southeast Asia.

The attention of the military to oil in Laos comes at the same time that the government of South Vietnam has delayed, from February to March or even later, invitations to petroleum companies to bid on offshore oil concessions. These concessions are located in the Gulf of Thailand and the south-east offshore region adjacent to the penal colony of Con Son. The Thien-Ky government has not yet determined if it will offer all 18 offshore leases in a block or whether it will stretch out the leasing over a period of months to the 21 contending companies, which are mostly American.

The leases are part of a potentially massive underwater oil deposit stretching some 3000 miles on a continental shelf which connects Japan, Indochina, Indonesia and Australia. Four major offshore finds in Southeast Asia to date have been made by American companies: Atlantic Richfield (who pioneered the Aretic North Slope of Alaska), Cities Service, the Union Oil Company, and Natomas Oil Company of California. The Wall Street Journal of September 22, 1970 reported rumors that Standard Oil of New Jersey (ESSO) had discovered a huge reservoir of petroleum in its 28,000 square mile concession off the coast of Malaysia, directly adjacent to the South Vietnamese blocks. ESSO has made no public announcement to date, realizing that news of the find would greatly boost the price of South Vietnamese bidding. But ESSO opened a greatly enlarged refinery in Singapore on February 19, 1971.

THE IMPORTANCE of Southeast Asia oil stems from predictions that within the next ten years the industrial world will consume as much petroleum as was produced in the entire previous history of oil. The United States consumes one-third the world's production, and American petroleum companies control three-quarters of the non-communist supply. While only 3 per cent of the U.S. supply comes from the Mid-East, the 59 per cent of Mid-East production controlled by American petroleum companies is sold to the oil-hungry nations of Western Europe and Japan. The recent discord in the Mid-East between the Organization of Petroleum Exporting Countries (OPEC) and the large American petroleum companies underscores the economic and political importance of the potentially stable offshore Southeast-Asian supplies.

Senators report that over the past few weeks the Senate Foreign Relations Committee has been receiving several hundred letters a day from various citizens who have asked that hearings be held on the relationship between petroleum and the American presence in Indochina. A.U.S. Embassy official in Singapore, base for the burgeoning petroleum operations in Southeast Asia, suggested, "We've had all the feelings of an oil boom here in Singapore already. But with the recent chaos in the Middle East the oil moguls must be frantic now to get more firmly into Southeast Asia."