NATIONAL INTELLIGENCE DAILY TUESDAY 3 NOVEMBER 1987

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T01422R000100020012-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 28
• Document Creation Date: December 23, 2016
• Document Release Date: October 17, 2013
• Sequence Number: 12
• Publication Date: November 3, 1987
• Content Type: REPORT

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Director of
Central
Intelligence
-rop-seeret,
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National Intelligence Daily
Tuesday
3 November 1987
Top
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CPAS NID 87-256JX
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3 November 1987
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oo secret
Contents
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Persian Gulf: Situation Report
1
USSR: Setback for Reformers
3
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Mozambique: Mounting Civilian Casualties
5
Notes
USSR-China: Trying To Exploit Sino-US Tensions
6
China: Foreign Exchange Reserves Up
6
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France: New Armed Forces Chief
7
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Lebanon-Israel: Amal-lsraeli Accord
8
Romania: President's Son Appointed Governor
9
Spain-France: ETA Counterfeiting
9
In Brief
10
Special Analyses
China: New Leaders Facing Old Problems
11
Ethiopia: Facing Famine
13
Kuwait: Oil Export Strategies
15
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PERSIAN GULF: Situation Report
Iran Plans Anti-US The Iranian Government is organizing massive anti-US
Demonstrations demonstrations for tomorrow, the eighth anniversary of the seizure of
the US Embassy in Tehran. Iranian Embassies reportedly are trying to
organize demonstrations and propaganda campaigns protesting the
US attacks on Iranian ships in the Persian Gulf.
yesterday.
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The Gulf was quiet 25X1
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Comment: It is not clear that Tehran has any specific plans for
violence tomorrow but the demonstrations provide a potential cover
for anti-US acts. There is no known link between the reported Iranian
approach to Pakistani Shias and the planned demonstrations
tomorrow.
Beijing Denies US China refuted recent US statements accusing Beijing of continued
Arms Sales Charges arms sales to Tehran in a radiobroadcast to Iran last Friday. The
Farsi-language broadcast charged Washington with "turning the
sharp edge of its sword" on Beijing and trying to sow discord
between China and the Persian Gulf states in order to shift blame for
Gulf tensions onto Beijing. Beijing described the US charges as
complete fabrications and argued that any country can find channels
to purchase arms for a price.
Liberia Requests
Tanker Protection
Comment: This broadcast is China's first public reaction to stories
that appeared in the US press last week on Chinese arms sales to
Iran. It was strongly worded but carried no threat of retaliation for the
US decision to postpone consideration of liberalization of COCOM
restrictions on China. By limiting its response to a broadcast to Iran,
Beijing probably hopes to avoid fueling the debate with Washington
over the arms sales issue while reassurin7 Tehran that China is not
bending to US pressure.
Liberia on 30 October requested US protection for Liberian-flagged
tankers sailing the Persian Gulf, according to the US Embassy.
Monrovia claims its ships in the Gulf have been subject to
continued
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"unprovoked attacks" and because some are US-owned they should
be eligible for protection.
Comment: This is Liberia's second request for protection in the Gulf.
Of the 22 Liberian-flagged ships attacked in the Gulf this year, five are
US-owned, including the Sungari, which was hit on 15 October by a
Silkworm missile while docked at Kuwait's Sea Isle Terminal. Of the
rest, six are Japanese owned, five British owned, and the remainder
are owned by companies located in Norway, Austria, South Korea,
and Bermuda. Ship attacks against Liberian-flagged ships represent
about 14 percent of the total ship attacks this year.
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Gorbachev Speaks Out on Soviet History
On Forced Industrialization:
In a single burst industrialization brought the country to a qualitatively new level.... Could a
course have been chosen in those conditions other than that put forward by the party? ... No,
it could not. At the same time the period also brought losses ... people were being persuaded
of the universal effectiveness of strict centralization ... bureaucracy increased, a danger that
Lenin warned about.
On Collectivization:
In that immense operation, a deviation from Leninist policy was committed.... It was carried
out by administrative methods... and gross violations acquired a ubiquitous character. But,
comrades, if we are to assess the importance of collectivization, overall, then in the final
analysis it was a turning point of fundamental importance.
On Stalin and the Purges:
Many thousands were subjected to mass repressions.... We must see both Stalin's
indisputable contribution ... and the gross political errors and arbitrariness permitted....
Sometimes it is said that Stalin did not know about the instances of lawlessness. Documents
in our possession say that this is not so. The guilt of Stalin and those closest to him is
immense and unpardonable.
On Khrushchev:
It required no little courage to criticize the cult of personality and its consequences and to
restore socialist legality.... Attempts were made to overcome the bureaucratic methods of
management based on command.... However, subjectivist errors were committed which
hampered socialism's emergence ... and compromised progressive undertakings.
On Brezhnev:
During his latter years, the search for the way to achieve further progress was to a great
extent held back by an adherence to customary formulas.... There was a buildup of negative
process ... a precrisis situation was created.
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Top Secret
USSR: Setback for Reformers
The cautious approach to controversial historical questions that
Soviet leader Gorbachev took in his speech yesterday marking
the 70th anniversary of the Bolshevik Revolution apparently
reflects the continuing precarious balance between reformers
and conservatives in the leadership. Together with the political
setback suffered by Moscow party leader Boris Yel'tsin, a close
Gorbachev ally and strong advocate of reform, the speech
indicates that conservatives led by "Second Secretary" Ligachev
have succeeded at least temporarily in setting limits on the
reform agenda.
Gorbachev did not question the legitimacy of the main lines of policy
under Stalin, although he did sharply criticize excess in carrying out
these policies. Gorbachev endorsed Stalin's decision to curtail
Lenin's New Economic Policy, which he assessed as appropriate for
its time, in favor of rapid industrialization and collectivization of
agriculture, claiming that there was no other way. He failed to make
dramatic changes in the official evaluation of Stalin's most notable
victims?Bukharin, Trotskiy, Zinoviev, and Kamenev.
Comment: Gorbachev's speech does not provide the kind of
historical and ideological framework that would legitimize frontal
attacks on the political and economic system that Stalin created. One
Soviet official noted that the speech represented the line of the
Central Committee, not of Gorbachev, or even the Politburo.
Gorbachev did go beyond Khrushchev's criticisms of Stalin in some
respects. He charged Stalin with committing a "deviation" from
Leninist principles by carrying the attack on "rich" peasants under
collectivization so far that many ordinary peasants suffered as well.
Moreover, Gorbachev emphasized repeatedly that even though
many aspects of the Stalinist system were necessary under the
circumstances of the time, it was a mistake to universalize
now-inappropriate past social models in an attempt to deal with
needs and demands of the country today.
The reassessment of party history will apparently continue, giving
reform advocates an opportunity to push for more thorough revisions
of historical interpretations and rehabilitation of Stalin's victims.
Gorbachev announced that the Politburo has mandated a review of
Stalin's purge victims by a special commission and that another
commission is drafting an outline of party history. Following the
anniversary celebrations, party secretary and Politburo member
Aleksandr Yakovlev, the most outspoken radical member of the
leadership on historical questions, reportedly will attend a conference
of historians and ideologists at the Marxism-Leninism Institute that is
ex ected to debate'rose - ? revisions in the official party history.
3
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Illanzania
Lake
yds'
Nacala
HARRE
tswana
PRETORIA
16 October
MAPUTO
S aziland
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3 November 1987
Area of most significant
RENAMO activity
= Beira transportation corridor
(port, oil pipeline, railroad, and
road)
0 150 Kilometers
lho Miles
711707 (A05253) 11-82
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MOZAMBIQUE: Mounting Civilian Casualties
The most recent attack on a Mozambican convoy last week
appears to be part of a RENAMO strategy in southern
Mozambique and eastern Zimbabwe to disrupt transport links,
create a climate of insecurity, and punish Maputo's military
allies.
Initial press and US Embassy reporting indicates that the insurgents
attacked a military convoy escorting civilian vehicles on the country's
main north-south highway about 50 miles (80 kilometers) north of
Maputo. The US Ambassador, who visited the site, reported that
about 80 vehicles had been destroyed and at least 200 civilians had
been killed, either directly by RENAMO or in an ensuing firefight
between the insurgents and government troops. RENAMO has
acknowledged the attack but claims it was a purely military
engagement. Earlier this month, a similar ambush on the same road
resulted in the deaths of approximately 50 civilians, according to
Embassy and press reports.
Insurgent operations also have taken a heavy toll on Zimbabwean
civilians since RENAMO began staging raids into easternZimbabwe
last June, ro bolster
border security, Harare is planning to add two new brigades to its
47,000-man Army, Tanzania,
Mozambique's other major military ally, recently decided to establish
a quick-reaction force in order to respond to RENAMO operations
close to its border,
Comment: Violence by both parties against civilians has long been a
part of the 11-year-old insurgency, but the most recent wave of
civilian casualties coincides with an intensification of rebel operations
in southern Mozambique, where RENAMO enjoys relatively little
popular support and is likely to show less restraint. In addition, rebel
military objectives, which include disrupting transport in the south,
probably contribute to the rising toll of civilian casualties.
Although Zimbabwe feels compelled to expand its Army because of
the RENAMO threat, neither Harare nor Dar es Salaam can easily
afford a major buildup of forces. Moreover, an increase in troop
strength alone is not likely to improve their ability enough to protect
civilians from RENAMO cross-border attacks
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USSR-CHINA: Trying To Exploit Sino-US Tensions
Soviet media have been defending China's positions on key issues
of Sino-US contention as part of the USSR's effort to court Beijing.
A Soviet radiobroadcast in Chinese last week denounced US
"interference" in Chinese internal affairs, citing the US Senate's
recent stand on Tibet. TASS in English on Monday reported a
Chinese media commentary accusing the US of "groundlessly"
threatening China for selling arms to Iran in order to deflect criticism
of US involvement in the Persian Gulf. The Soviet party also sent
greetings this week to the Chinese Party Congress for the first time
since 1956.
Comment: Moscow is trying to take advantage of current tensions in
Sino-US relations?in much the same way as it has long tried to
exploit US arms sales to Taiwan?by presenting the US as interfering
in internal Asian affairs and by playing up Sino-Soviet convergence
on issues such as disarmament, economic restructuring, and
nuclear-free zones?including space. China has not responded to the
USSR's media overtures and will not allow the Soviets to influence its
relations with the US.
CHINA: Foreign Exchange Reserves Up
China's foreign exchange holdings reached $14 billion in September,
more than $4 billion above January's record low, according to
official Chinese statistics.
Comment: Improved trade performance?exports were up
24 percent and imports down 4 percent?has reduced China's trade
deficit during the first nine months of the year to $2.7 billion, as
compared with $9 billion for the same period in 1986. Trade resulted
in a net increase in foreign reserves, however, if imports that did not
require payment in foreign exchange are excluded. In addition,
Beijing has probably earned additional foreign exchange from gold
sales.
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FRANCE: New Armed Forces Chief
President Mitterrand's appointment of new armed forces and army
chiefs will help the continuing development of French-US military
relations. General Maurice Schmitt, current Army chief, will replace
retiring Armed Forces chief General Jean Saulnier this month.
General Secretariat for National Defense director General Gilbert
Forray?Mitterrand's former military adviser and the organizer of
France's Rapid Action Force?will replace Schmitt as Army head.
Comment: Schmitt was in line for the promotion and is considered
professionally well-rounded and a soldier's soldier. Forray's
promotion, however, is a surprise, because he had served only three
months at the General Secretariat?the Defense Ministry's analytical
and coordinating body. Both men are well disposed toward the US
and strongly committed to cooperating with NATO.
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. wt.. ..,w.... w.
LEBANON-ISRAEL: Amal-Israeli Accord
Shia Amal leader Nabih Barri has agreed to halt all attacks against
Israel in return for a withdrawal of Israeli troops from several locations
in southern Lebanon. key
members of Amal's southern leadership are charged with enforcino
the ban and arresting Amal and Hizballah violators.
Comment: The agreement is probably intended to reduce immediate
tensions between Israel and Amal, but it does not presage a total
Israeli withdrawal from southern Lebanon. Amal's internal
fragmentation, Israel's continuing occupation, and the growing
Hizballah presence in the region undercut Barn's ability to guarantee
security along the border with Israel. And without significant
improvement in Amal's position?which is not likely?Israel will
continue to keep a small military presence in southern Lebanon and
to support its surrogate force, the Army of South Lebanon led by
General Lahad. In response to the Amal-Israeli agreement, the PLO
may shift several positions so that it can attack Israel without Amal
interference.
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Top Secret
ROMANIA: President's Son Appointed Governor
President Ceausescu's youngest son Nicu, formerly head of the
Communist youth organization, has been named First Secretary of
one of Romania's 40 counties, according to press reports. He
apparently remains a nonvoting candidate member of the Central
Committee's Political Executive Committee. Many Romanians believe
that Nicu, despite his reputation as a playboy, is being groomed to
succeed his father.
Comment: Nicu Ceausescu's new position probably is intended
to give him administrative experience before he moves to a
more important post in Bucharest. Although the President and
his ambitious wife are intent on giving their 36-year-old son a
high-ranking government sinecure at the very least, his evident lack of
ability and his unpopularity within the party probably rule him out as a
serious candidate for succession. The President's wife, however,
probably hopes to prepare Nicu for a major government position
should she manage to succeed her husband.
SPAIN-FRANCE: ETA Counterfeiting
In recent operations against members of the Basque extremist group
ETA living in southern France near the Spanish border, French police
seized $9.6 million in bogus US $100 notes and 60 printing plates and
arrested two ETA suspects. Information obtained as a result of the
arrests indicates that the Spanish Basque provinces may be
inundated with counterfeit US bills. Police also found plates for
producing local French Government stamps and false Spanish and
French national identity cards.
Comment: The apparent size of the counterfeiting activity and the
ETA's technical expertise suggest a sophisticated operation. The
counterfeiting scheme may support the high priority ETA has recently
given to sabotaging the Spanish economy. ETA may also have turned
to counterfeiting to make up a loss of extortion-derived revenues. The
amount of counterfeit currency seized and the large number of
printing plates indicate ETA may also be supplying other groups
involved in counterfeiting.
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TOD Secret
In Brief
East Asia
? Taiwan proposing freeze on 1988 exports to US, higher imports, if
US pressure to appreciate currency... concerned appreciation
will hurt economy. ... export freeze probably more harmful to small
businesses than appreciation.
Europe
? Greek Cypriot parliament doubling defense tax, raising military
spending to $20 million a year, according to US Embassy...
public support for expanded defense growing ... arms race on
Cyprus may accelerate as UN peace process founders.
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? Bulgaria announced liberalized foreign investment regulations
giving joint ventures tax-exempt status for first three years, other
benefits.., part of larger economic reform program... motivated
by need for Western technology, increased exports.
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10 3 November 1987
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TOD Secret
Special Analysis
CHINA: New Leaders Facing Old Problems
Deng Xiaoping and his reformist allies gained much of what they
wanted at the recent party congress and Central Committee
Plenum. However, apparent compromises with orthodox party
members and failure to resolve nettlesome questions may dilute
Deng's apparent gains. The Politburo Standing Committee is
evenly split between the party's reformist and orthodox wings,
and the selection of a new premier remains at an impasse.
Moreover, the reformers must still convert their gains into
concrete policy?historically a more difficult task.
The 13th National Party Congress that closed Sunday marked a
symbolic changing of the guard, as Deng led the Long March
generation off the Central Committee and into retirement. Deng,
nevertheless, will remain an active player?in deference to his
prestige and wisdom, according to a party press spokesman?and
will continue as chairman of the party Military Commission. Many of
Deng's more prominent rivals also will have a potentially powerful
base in the party's Advisory Commission, where they can continue to
score the shortcomings of China's reforms.
The congress endorsed Premier Zhao's work report, which, while
underscoring several pet concerns of orthodox party leaders, was
strikingly straightforward and free of ideology. In principle, the
congress sanctioned some of the most controversial reform
experiments?private ownership, the sale of stock and payment of
dividends, and the leasing of land. Zhao proposed, and the congress
also accepted by its changes to the party constitution, the separation
of party affairs from government and economic work in the interest of
greater efficiency and productivity.
The Politburo named at yesterday's Central Committee Plenum has
17 members?three less than its predecessor?and a strong plurality
in favor of Deng's reform program. There are 10 holdovers, and the
seven additions are seasoned national or provincial leaders. The
former General Secretary, Hu Yaobang, stayed on?a rebuff to the
traditionalists who forced his ouster in January.
continued
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Top Secret
Unanswered Questions
Deng's reluctance to exit the political stage completely indicates his
continuing concern with the fragility of his reforms, personnel
arrangements, and his inability to install a younger leader as chairman
of the Military Commission. The plenum named Zhao as First Vice
Chairman of the Commission, almost certainly to pave the way for the
reunification of the top party and military positions for the first time
since 1981. It is not clear whether Zhao has a broad enough
constituency within the military to sustain a bid for the post.
The five-man Politburo Standing Committee, whose members on
average are 14 years younger than their predecessors, poses a
problem for reformers. Zhao appears to have only one unequivocal
ally?Hu Yaobang's protege Hu QiIi?against traditionalist-leaning
Vice Premiers Li Peng and Yao Yilin. Vice Premier Qiao Shi, who has
ties to both camps, probably will be a swing vote on controversial
decisions.
Zhao stays on as Premier but, according to the Chinese press, has
asked for a National People's Congress Standing Committee session
later this year to name an acting premier. The premier traditionally
has been a Politburo Standing Committee member, and Li Peng, the
preferred candidate of the orthodox wing, seems well positioned for
the job. Should Li get the nod, he and Zhao will have to work out the
balance of power between the Politburo and the State Council under
a new and ambiguous mandate to separate party and government
work. Contention is likely should Li seek to impose a more orthodox
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stamp on the State Council, its staff, and the reform program. 25X1
Outlook
Zhao's work report provides an ambitious reform agenda but is short
on specifics of implementation. The need to sort out new political
relationships and continuing economic problems?stagnating grain
production, a widening budget deficit, industrial waste and
inefficiency, and strong inflationary pressures fueled by excessive and
often wasteful capital construction?indicate the reformers probably
will not be able to MOVA aead very aggressively with their program.
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Top Secret
Recent changes in province
boundaries are not reflected.
BEI Eritrean People's Liberation Front controlled area
Mi Eritrean People's Liberation Front operating area
Tigrean People's Liberation Front operating area
Red Sea
SANAA*
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(N. Yemen)
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Top Secret
3 November 1987
Boundary representation is
not necessarily authpritatiye.
Indian
Ocean
O 150 Kilometers
O 160 Miles
MOGADISHU
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Top Secret
Special Analysis
ETHIOPIA: Facing Famine
Ethiopia is threatened again by widespread famine. Although the
government has contributed to initial relief efforts, its resources
are severely limited. Prospects for averting a food crisis like that
during 1984-85 are uncertain as donors' budgetary constraints,
transportation shortages, and security problems increase.
A food crisis as severe as that two years ago threatens to engulf
Ethiopia as early as January. In September the government issued a
preliminary request for 950,000 tons of emergency food for drought-
stricken areas. Continuing poor rainfall, however, has dashed hopes
for substantial crop recovery, and harvest projections for next month
in both affected and adjacent areas are bleak. The US Embassy
reports that some 1.2 million tons of relief food might be required?as
much as at the height of the previous famine.
Getting food to people in their home districts before they migrate to
cities, feeding camps, or across international borders again will be
key to managing the crisis. Logistic problems are already appearing,
however. A recent UN transport assessment warns of ill-equipped
ports and truck shortages, particularly in the north, and Addis Ababa
has balked at donor suggestions that it move 200 trucks there from
the south, according to diplomatic reporting. The destruction by
rebels of 23 trucks in a UN relief convoy in Eritrea late last month will
aggravate the problem.
The Government's Stance
In contrast with its attempt to cover up the famine in 1984, the regime
has clearly indicated it intends to deal openly and cooperate in relief
efforts, according to diplomatic reporting. Early in August the
government acknowledged that the drought had deepened and
appealed for international aid. It pledged 50,000 tons of grain for
relief feeding, bought another 100,000 tons on the international
market, and?for the first time?sent officials into the countryside to
appraise the crisis.
Despite these moves, donors will be wary of abuses similar to those
that occurred during the previous famine, when the regime
involuntarily resettled hundreds of thousands of peasant farmers from
depleted lands in the north to virgin lands in the south and west. The
resettlement caused scores of deaths and diverted government
resources from the relief effort. The regime halted the program in
continued
Top Secret
13 3 November 1987
Declassified in Part - Sanitized Copy Approved for Release 2013/12/31 : CIA-RDP88T01422R000100020012-3
Declassified in Part - Sanitized Copy Approved for Release 2013/12/31 : CIA-RDP88T01422R000100020012-3
Top Secret
Ethiopia: Selected Economic Indicators
Index of Per Capita Available Grain a Coffee Prices
Index: 1980=100 US S per pound
120
175
150
100
125
80
100
60
75
40
50
20
25
IIIIIIIIIIIIIIIIIIIIIttlimm1111 1 1
1 1 1 1
1 1 1
0 1982 1983b 1984b 1985 b,c 0
1984 85 86 87
Purchases of Foreign Grain
Debt Service, As a Share of Exports of Goods and Services
Thousands of metric tons Percent
350
50
300
40
250
200
30
150
20
100
10
50
0 1984 1985 1986 1987c 0 1984 1985 1986 c 1987c 1988 c
Foreign Exchange Reserves (end of period)
Millions of US S
Trade Figures
Millions of US S
350 1,200
300
250
200
150
100
50
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
0 1984 85 86 87 0 1984
Exports Imports
a Excludes livestock products and food imports. Planting is from Other F-1
March to July, with harvests from September to December.
b Excludes Eritrea and Tigray.
c Preliminary.
1,000
800
600
400
200
1111
111=111
MUNIEINIEELMII
111111111=1111111111111111
r--1 Coffee
85
86
87 c
314795 10.87
Top Secret
3 November 1987
Declassified in Part - Sanitized Copy Approved for Release 2013/12/31 : CIA-RDP88T01422R000100020012-3
Declassified in Part - Sanitized Copy Approved for Release 2013/12/31 : CIA-RDP88T01422R000100020012-3
Top Secret
October 1985 following international protests, but President Mengistu
recently emphasized that resettlement remains key to his
development strateqy and hinted at its resumption, according to the
Embassy.
Western donors and international organizations also await regime
action on agricultural reforms. The EC and World Bank have
proposed reforms to improve Ethiopia's agricultural pricing and
marketing structures and to strengthen private markets, but Addis
Ababa has stalled for three years; Western donors believe the delay
has slowed the recovery and development of the rural sector.
Although Ethiopia recently drafted reform plans along the lines
suggested by the World Bank, there is no indication of whether or
how they will be implemented, according to the Embassy.
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Ethiopia's overall economic malaise severely limits its ability to pay
for increased food imports. Rising debt-service payments and lower
world prices for coffee, its main export, are draining reserves. As in
1984-85, however, the government probably will maintain the flow of
food to the armed forces and urban population in recognition of their
importance to regime stability and the counterinsurgency effort.
Other Stumblingblocks
The unprecedented attack on the unescorted UN relief convoy
portends growing security problems for the aid effort in two of the
hardest hit provinces, Eritrea and Tigray.
The UN's refusal to meet rebel demands for
advance notification of relief convoys and its reluctance to request
government military escorts illustrate the donors' dilemma. Both of
these steps would slow the delivery of food aid and risk politicizing
relief operations, without reducing the threat to future convoys. Other
options, such as airlifting food, would impose higher costs at a time of
growing budgetary constraints.
In 1988, unlike 1984-85, budgetary problems among donor countries
are likely to seriously constrain relief efforts. Aid funds are being cut
in most Western countries, and some donors have expressed concern
about embarking on another protracted and costly relief program in
Ethiopia, according to the Embassy. At the same time, humanitarian
organizations, which implement most of the relief work in the field,
also have reduced funding and are turning to the bilateral donors to
make up the deficit.
14
Top Secret
3 November 1987
Declassified in Part - Sanitized Copy Approved for Release 2013/12/31 : CIA-RDP88T01422R000100020012-3
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Declassified in Part - Sanitized Copy Approved for Release 2013/12/31 : CIA-RDP88T01422R000100020012-3
Top Secret
Selected Middle East Oil Facilities
* ANKARA
Turkey
Turkey pipeline
Batman
Cayhan:ei 2nd Iraq-Turkey pipeline
'wkw
? Denya
NICOSh;
Crikruf?,
Mechtemmean.122121.
Lebanon
Sea BEIRUT*
Sidoei
lame
Tal Ayiv..Yato / I
I
?/
Egyp
Gt at
Au .ba
Iraq-Turkey-pipeline
est. 1.0
Syria
rap' le-happ,,-
*DAMASCUS
ordan
Armistice
Line
Al 'Ag sh
PAR Kuwait-Saudi
\....fAcirnrnodrative
Boundary
Sudan
Yanhu'
at Bahr
Ayn
Zal6h
Iraq".
pipeline
0.07
.???
oxy,,, 42
Iraq
aline 1.0
Phase II-Ir
Ethiopia
Boundary rInsieseniallOn ia
not necessarily euthoritative
Top Secret
Soviet Union
*
BAGHDAD
,o.
moi,
Ar Rumayloh
Az Zuboyr
Iraq-Saudi Arabia
Neutral Zone
Phase I-Iraq-Saudi
Spurline 0.5-1.6
-Saudi PiPoline i.6
5 Kilometers
5 Miles
North
'-)1111141111
ank Farm
So h
ank Mi a a
Ash,Shu'aybah
Farmi-
in8"Abd Allah
Persian
Gull
North Pier Sea Island
taimm
outh Pier
tailmat
single-
point
mooring
buoy
avid
.Gorrah
Ganivalt
it Khark,,
1=1
'U WAIT
Kuwait-
Saudi
pipeline
0.5
We at
Khalil
Iran
3n
Pakistan
Persian
Gulf
...Bahrain
MANAMA
HS t:,.. t 0;
DuhayyAL'
di
/ Riymm station 3
l...) Al DOHA`A..9 tar ABU DHABI
* "-Popp
Saudi East-West pipeline- Glinver --*,;..,":----!---, (
Petroline est. 2.6 United MO
utna
i-LKhawr
?Fakkan
, Gulf of Oman
Saudi Arabia
*SAA
Y.A.R.
N. Yemen)
Djibouti
DJIBOUTI
f."
3 November 1987
Admmistruteve\
P.D.R.Y.
(S. Yemen)
*MUSCAT
.1alutiyit
Oman (1-fllazfrat
Maakah
Arabian Sea
Proposed oil pipeline
? ? ? Oil pipeline under construction
Existing oil pipeline
Oilfield
Oil terminal
Oil refinery
2 Proposed pipeline capacity
.0
(million b/d)
Note: Pipeline alignments are approximate.
o 300 Kilometers
C)
It
0
300 Miles
711708
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Declassified in Part - Sanitized Copy Approved for Release 2013/12/31 : CIA-RDP88T01422R000100020012-3
Top Secret
Special Analysis
KUWAIT: Oil Export Strategies
Iran's Silkworm attacks on Kuwait's Sea Island oil-loading facility
highlight the vulnerability of both the country's oil facilities and
the tankers loading in Kuwaiti waters. Kuwait's diversification of
its export system, along with its large foreign financial reserves
and the steps Kuwait has taken to protect its oil exports reduce
the economic impact of the limited Iranian attacks.
Kuwait has greatly increased the use of oil shuttle operations in
response to Iranian ship attacks. Nearly 80 percent of Kuwaiti crude
exports?about 1.5 million barrels per day in September?are
shuttled to Khawr Fakkan, well above the 20 percent earlier this year.
Most petroleum products are shipped directly from Kuwait to their
destinations.
Use of Foreign-Flagged Ships
Foreign flag tankers constitute the majority of the crude oil shuttle
fleet. The Kuwait Oil Tanker Company primarily uses UK- and
Liberian-flagged supertankers,. . The
_ _
temporary loss of the US-ref lagged Bridgeton, damaged by an Iranian
mine in July, had no impact on Kuwaiti crude exports because of the
availability of other tankers.
The regime plans to increase product exports early next year from
500,000 b/d to more than 600,000 b/d. US-reflagged tankers carry
about 100,000 b/d, and Soviet-flagged chartered tankers carry
another 30,000 b/d. Nearly 70 percent of Kuwait's liquefied petroleum
gas exports of about 70,000 b/d are carried by US-ref lagged tankers.
Options To Increase Protection
If unescorted tankers stop loading at Kuwait, the Kuwait Oil Tanker
Company could maintain almost all of its crude and product exports
by using US- or UK-flagged tankers in a shuttle operation to Khawr
Fakkan. The Bridgeton, along with several UK-reflagged or chartered
supertankers, could deliver more than 600,000 b/d of crude to Khawr
Fakkan. In addition, the Kuwait Oil Tanker Company could add the
Maryland?a chartered, US-flagged supertanker.
continued
Top Secret
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15 3 November 1987
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Declassified in Part - Sanitized Copy Approved for Release 2013/12/31 : CIA-RDP88T01422R000100020012-3
Too Secret
An expanded shuttle system is technically feasible but would create
logistic problems if Kuwaiti production continues at current high
levels. Loading delays associated with increased use of the North and
South Piers would increase costs and put more tankers at risk from
Silkworm missiles. Kuwait can continue to export up to 1 million b/d
of crude oil from the North Pier facility, although draft restrictions
there limit each tanker cargo to 250,000 tons or less.
Kuwait is considering building an export pipeline to the Red Sea to
increase the security of its oil exports. Government officials, however,
have been reluctant to make a firm decision because of the cost.
Construction would take at least two years and probably could not
begin until late 1988.
Outlook
Kuwait's oil export facilities and refineries will continue to be
vulnerable to Iranian missile attacks or sabotage. More than
30 percent of Kuwait's population is Shia, many with strong ties to
Tehran. Iranian-backed Kuwaiti Shias planted bombs at domestic oil
facilities three times this year. So far, Kuwait has been the target of at
least eight Silkworm missiles, and continued successful missile
attacks on tankers and key facilities may limit Kuwaiti exports.
Moreover, Tehran's unsuccessful attack on the Ra's al Khafji export
facilities emphasizes Iranian resolve to strike Kuwaiti interests using a
variety of tactics.
Nonetheless, even the temporary loss of Kuwait's Sea Island export
facility will not severely disable the country's export operations or the
economy. The duplication built into Kuwait's export system reduces
the likelihood of a complete disruption of exports. Other than shifting
crude oil loading operations to its North Pier terminal, Kuwait is
reactivating a single-mooring export buoy near the Sea Island with a
capacity of about 500,000 b/d. Kuwait's three product export
refineries have separate loading terminals.
The regime has sufficient financial reserves to meet domestic
expenditures and repair costs. Kuwait can also limit revenue loss by
using alternate oil export facilities. In recent years investment income
has surpassed oil export receipts as the primary source of
government revenues.
Top Secret
16 3 November 1987
Declassified in Part - Sanitized Copy Approved for Release 2013/12/31 : CIA-RDP88T01422R000100020012-3
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Declassified in Part - Sanitized Copy Approved for Release 2013/12/31 : CIA-RDP88T01422R000100020012-3
Top Secret
Top Secret
Declassified in Part - Sanitized Copy Approved for Release 2013/12/31 : CIA-RDP88T01422R000100020012-3