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Turkmenistan invites oil sector investment by Indian companies

Turkmenistan has invited Indian oil companies to acquire stakes in the country’s Caspian shelf oil and gas blocks through production-sharing contracts.

The invitation was extended during a meeting between petroleum minister Murli Deora and his Turkmen counterpart Baimurat Muradov at Asghabat, capital of the country. The two sides also agreed upon a roadmap to take forward cooperation in various activities in the hydrocarbon sector. Deora was accompanied by petroleum secretary, heads of public sector oil companies - Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC), ONGC Videsh Ltd (OVL) - along with senior officials of the petroleum ministry and ONGC enroute to Moscow.

Turkmenistan’s onshore oil and gas blocks are still not open for equity participation by foreigners and hence the invitation for the off-shore blocks, an official statement said. The Turkmen side specifically referred to the joint venture between ArcelorMittal and ONGC, which recently acquired 30% stake in two blocks on the Caspian Sea. Muradov assured full cooperation in completing the formalities for applying for production sharing agreements in the Caspian sector. Regarding on-shore facilities, he said that the Indian companies should sign service contracts by participating in tenders. He reiterated that Turkmenistan is interested in Indian participation owing to India’s known expertise in these sectors.

The Indian side proposed that the two countries should sign inter-governmental MoU for cooperation in both upstream and downstream activities where ONGC, IOC and GAIL could work with the Turkmen counterparts. Muradov proposed to identify the exact areas of cooperation and better understanding of each other before signing the MoU. Officials of Indian companies such as ONGC, Indian Oil Corp and GAIL (India) would visit Turkmenistan in the near future to apprise the Turkmen side about the potential in India. „This would be followed by memoranda of understanding during the second joint working group meeting on energy in the Q1 of 2008,” the statement said, adding that the potential for refineries would also be a part of this pact. The two sides also discussed the potential for setting up a gas pipeline from Turkmenistan through Afghanistan and Pakistan.

In Moscow, Deora will pitch for ONGC Videsh Ltd getting a stake in the giant Sakhalin-III oil and gas project in far-east Russia. Deora was to visit Moscow last month but cancelled the trip as crucial appointments, such as a meeting with Russian oil minister, could not materialize in time. With ONGC Videsh Ltd’s 20% stake in Sakhalin-I fields fetching the nation 2.4 million tons of crude per annum, Deora will use his visit to Moscow to push for OVL’s participation in the Sakhalin-III fields. Sakhalin-I and II projects have already been decided and Russia is planning to invite bids in future for Sakhalin-III, IV, V and VI projects in the vast energy-rich region. (