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Suitors line up in London to court Turkmen oil wealth

Energy rich Turkmenistan, emerging from decades of self-imposed isolation, took its oil and gas industry’s coming-out party on the road, offering energy partnerships to an overflowing hall of oil majors and Western diplomats on Thursday.

“In the future we hope our oil and gas sector will determine our economy as a whole,” Bayrammurad Muradov, executive director of the state agency for management and use of hydrocarbon resources, told an army of oil executives and diplomats from North America, Europe, Central Asia and the Middle East. “There is a place for foreign investors in this process.” The previous day, Muradov and two other senior Turkmen government officials held talks with European oil majors BP and Shell, and met British Energy Minister Malcolm Wicks.

Last week a European Union delegation visited the Turkmen capital of Ashgabat to discuss energy supplies. Turkmenistan is emerging from decades of Soviet-era isolation followed by 21 years of autocratic rule under Sapurmurat Niyazov, best known for banning gold false teeth and renaming the month of January after himself. The country took its first steps to open up its energy industry after the election of President Kurbanguly Berdymukhamedov following Niyazov’s death in December 2006. It opened the door in November 2007 with a conference in Ashgabat. Two more meetings are planned this year.

In presentations and promotional film featuring folk dancing in Ashgabat streets and acres of glistening pipe, Turkmen officials outlined their ambitions for the industry, ranging from output growth to formaldehyde production. The country aims to triple gas output to 250 billion cubic meters per year by 2030 and raise oil output to 2.2 million barrels per day. “Those are targets that everyone in this room will cheer,” Steven Mann, the Eurasian Energy Diplomacy Coordinator at the US Department of State, told the conference. Under Niyazov, Turkmenistan sold its gas to Russia at a discount price and opened its doors to just a tiny handful of foreign investors. As a result, the country’s hydrocarbon reserves remain largely untapped. Deputy Prime Minister Tachberdi Tagiev said, that of the country’s 150 known oil and gas fields, only 50 are currently in production.

Faced with the rare prospect of a share in untapped oil riches, global majors, confronted elsewhere with declining reserves and challenges from partner states demanding a bigger share of the spoils, lined up to court the Turkmen delegation with technology and development assistance. “I think our partnerships might be more properly called friendships,” Jay Pryor, the vice president of Chevron, which operates one of central Asia’s oldest oil joint ventures, told the conference.

While Turkmenistan negotiates diplomatic rivalries between Russia, China and the West, promising to increase deliveries to the former while negotiating with the European Union, it is keen to reduce its energy exposure to Russia. A representative for EU External Relations Commissioner Benita Ferrero Waldner called for a meeting of Caspian states to discuss a trans-Caspian pipeline route which would carry gas from central Asia to Europe, bypassing Russia. The European Union is ready to sign a memorandum of understanding with the central Asian country outlining a framework energy cooperation, including exhange of information, energy security, efficiency and technology, Pierre Morel, EU special representative for Central Asia, told the conference. Neither EU nor Turkmen officials would comment on a newspaper report earlier this month that Turkmenistan had earmarked 10 billion cubic meters per year for delivery to the European Union. (Reuters)