International news outlets were intrigued by an August 13th announcement by the Turkmen president at a government meeting indicating that Turkmenistan would review proposals for offshore drilling from the companies Chevron, TX Oil, Mubadala, and ConocoPhilips. Yet the statement was not yet a commitment, and the notice came at the end of a 2,900-word summary record of a meeting calling to discuss national development projects which mainly focused on the prospects for the Turkmenistan-Afghanistan-India-Pakistan (TAPI) pipeline. Somewhere after a discussion of fishing industry developments and plans to attract investment in carbamide plants, President Berdymukhamedov briefly mentioned foreign oil majors. He asked recently-appointed acting Deputy Premier Yagshigeldy Kakayev to "place under strict oversight" existing projects in the Caspian Sea run by Itera of Russia and RWE of Germany and to speed up environmental impact assessments.
Itera has long enjoyed friendly relations with the Turkmen leadership in contrast with Gazprom, the Russian gas monopoly with which Ashgabat has had difficulties since an explosion on a pipeline last April and protracted negotiations over the price of Turkmen gas. The Itera CEO regularly meets with President Berdymukhamedov. Germany's RWE, part of the Nabucco pipeline consortium, was the first Western company to be given an offshore drilling permit and appeared to enjoy close cooperation with Turkmen officials. But earlier this year, the Turkmen government berated RWE officials for seeming to jump the gun on an announcement of possible Turkmen participation in Nabucco. RWE was forced to announce later that any possible involvement in Nabucco was delayed at least until the end of 2010, despite a memorandum of understanding made in 2009 with plans to bring Turkmen gas to international markets. And while these companies would likely follow international standards for environmental assessments, yet after the BP oil spill in the U.S. Ashgabat may want to redouble its inspection efforts.
After mentioning the Russian and German companies, President Berdymukhamedov then assigned his ministers to "select the most appropriate proposals to Turkmenistan to exploit the [Caspian] sea blocks no. 9 and no. 20 which have come from the companies Chevron, TX Oil, Mubadala and ConocoPhilips."
TX Oil is chaired by Neil Bush, brother of George Bush, who travelled to Ashgabat earlier this year to meet with President Berdymukhamedov. Turkmenistan has not allowed any foreign companies except China to obtain onshore drilling permits, and limits land exploration to its own state oil and gas companies.
The call merely to take a look at proposals is not yet a commitment to the U.S.; there is already a precedent when Ashgabat announced an international tender to build the East-West pipeline, shortly after President Berdymukhamedov had an unsuccessful summit with Russian President Dmitry Medvedev, and disabused the Kremlin of the notion that the project would be solely theirs. After postponing the tender's deadline several times, and likely taking bids from foreign companies that have not been publicized, Ashgabad later changed its mind, cancelled the tender, and decided to build the East-West pipeline itself, using its own specialists.
ConocoPhillips and Mubadala, a company backed by ConocoPhillips and Abu Dhabi, have a joint venture to explore a Kazakh block in the Caspian, and are believed also to have a plan to team up on accessing Turkmenistan, a source told Bloomberg. None of the companies have commented on the Turkmen announcement.
For years, President Berdymukhamedov has talked vaguely about the need to "diversify" the routes to market for his country's considerable gas and oil wealth, and the benefits of a "multi-vector policy" without getting into much detail about what this would entail. Countless times he has met with Western leaders and oil majors and somehow failed to make firm verbal or political commitments to the Western projects of Nabucco and Trans-Caspian. Indeed, it took China entering the picture with a $4 billion loan last year to get Ashgabat out of its dependency on Russian routes. Now, Turkmenistan is evidently seeking an additional $4.1 billion loan needed to get to the second phase of the Chinese pipeline project, already pumping gas since December -- and likely in part because Russia, its former main partner, dramatically reduced its purchases. China is helping to develop and deliver the gas fields of Southern Yolotan. This year, about 6 billion cubic meters (bcm) was pumped to China, and the amount is expected to go up to 40 bcm in 2015, reports Associated Press.
In another development that bodes well for Turkmen-Azeri cooperation, BP Azerbaijan has announced that Turkmen oil, brought to Baku on tankers from Turkmenistan, is now flowing through the Baku-Tbilisi-Ceyhan pipeline. This enables Turkmenistan to export oil via a route that does not pass through Russia.
Turkmen border guards reportedly shot and killed a 32-year-old Uzbek man who was carrying gasoline he had purchased in Turkmenistan back over the border to Uzbekistan. While the Central Asian nations seem rich with hydrocarbon wealth, their own people, especially in rural areas, lack access to affordable fuel, even with state subsidies. The discrepancy in gas prices between the two countries has served as a magnet for Uzbek traders to engage in contraband in regions near the Turkmen border. There have been an increasing number of border killings in recent years as Turkmenistan tightens up its security near Iran, Uzbekistan, and Afghanistan. Radio Free Europe/Radio Liberty has reported on a number of killings of Afghan cowherds who may have fell victim to overactive Turkmen border guards.
The U.S. has extended an agreement on cooperation in narcotics control which involves training of Turkmen border guards. The State Counter-Narcotics Service of Turkmenistan has received English-language training.
The Turkmen government continues to stop university students from going to study abroad. Radio Free Europe/Radio Liberty reported last week that some 650 students, mainly from Lebap province, who had been evacuated from Kyrgyzstan during unrest last month in Osh are being summoned by officials and urged to sign written statements pledging not to return to Kyrgyzstan. Parents have sent an appeal to President Berdymukhamedov.
Catherine A. Fitzpatrick compiles the Turkmenistan weekly roundup for EurasiaNet. She is also editor of EurasiaNet's Sifting the Karakum blog. To subscribe to the weekly email, write firstname.lastname@example.org