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Pentagon Fuel Supply Agreement Could Strain Relationship With Kyrgyzstan

In a move that could strain Washington’s relationship with Kyrgyzstan, a key Central Asian ally, the Pentagon opted November 3 to award a new fuel-supply contract to a company that is already at the center of a US congressional probe.

The Defense Logistics Agency (DLA) gave Mina Corp “a maximum $315,180,960 fixed price with economic price adjustment, requirements-type contract for jet fuel” at the Manas Transit Center. Mina Corp beat out eight other bidders, according to the DLA award. “The date of performance completion is Nov. 2, 2011,” the Pentagon announcement stated.

The Manas base near Bishkek is a key logistical hub for the US-led war in Afghanistan. Gibraltar-registered Mina Corp, an affiliate of the previous contract holder, Red Star, has supplied TS-1 jet fuel to Manas since 2007.

Representatives of Mina Corp did not have any immediate comment about the Pentagon’s contract decision.

In July 2009, Mina Corp secured a three-year supply contract worth up to $730.9 million. But following the April collapse of former president Kurmanbek Bakiyev’s administration, coupled with the launch of the congressional probe in Manas contracting practices, the DLA chose not to exercise an annual option with Mina Corp. On June 9, 2010, a new tender for the supply of jet fuel was opened. Mina Corp, however, has continued to supply fuel the base on a month-to-month basis.

It was not immediately clear how Kyrgyz officials in Bishkek will react to Mina Corp’s win. Sources told EurasiaNet.org that Pentagon officials were prepared for the award to be “misinterpreted” and “unpopular.” But a DC insider warned the Pentagon has underestimated the extent of Kyrgyz antipathy towards Mina Corp.

“The question is whether Kyrgyzstan is prepared to allow [Mina Corp] to operate on its territory. I suspect the answer will be a simple ‘No,’” he said.

Some powerful Kyrgyz politicians, including the Social Democratic Party chairman, Almazbek Atambayev, and the Respublika Party leader, Omurbek Babanov, are noted opponents of Mina Corp’s fuel supply role. Both Atambayev and Bananov may soon occupy influential positions in the Kyrgyz cabinet, depending on the outcome of coalition talks in Bishkek.

Interim President Roza Otunbayeva has publicly denounced Mina Corp, and is on record as wanting a significant change in fuel-supply arrangements at Manas. Otunbayeva reportedly lobbied US President Barack Obama to authorize a new fuel-supply arrangement at the base, one involving a joint Kyrgyz-Russian entity.

On September 24, the DLA’s fuel tender was amended to give the Pentagon agency the ability to grant “by other means” 20 percent of the supply contract to a state-owned Kyrgyz enterprise in partnership with Russia’s GazpromNeft, beginning in February 2011.

The Kyrgyz-Russian entity’s supply share could rise to 50 percent by July 2011, the amendment added.

By. Deirdre Tynan

Originally published by EurasiaNet.org

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