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Identifier
Created
Classification
Origin
06ASHGABAT1054
2006-10-05 13:52:00
CONFIDENTIAL
Embassy Ashgabat
Cable title:  

ARE TURKMENISTAN'S AMU DARYA RIGHT BANK OIL AND

Tags:   EPET  ECON  PREL  TX 
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VZCZCXRO0911
PP RUEHDBU
DE RUEHAH #1054/01 2781352
ZNY CCCCC ZZH
P 051352Z OCT 06
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 7880
INFO RUCNCIS/CIS COLLECTIVE
RUEHLM/AMEMBASSY COLOMBO 0036
RUEHKA/AMEMBASSY DHAKA 0062
RUEHIL/AMEMBASSY ISLAMABAD 1685
RUEHBUL/AMEMBASSY KABUL 0421
RUEHKT/AMEMBASSY KATHMANDU 0037
RUEHNE/AMEMBASSY NEW DELHI 0487
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
						C O N F I D E N T I A L SECTION 01 OF 03 ASHGABAT 001054 

SIPDIS

SIPDIS

DEPT FOR SCA/CEN (PERRY)

E.O. 12958: DECL: 10/04/2016
TAGS: EPET ECON PREL TX
SUBJECT: ARE TURKMENISTAN'S AMU DARYA RIGHT BANK OIL AND
GAS RESERVES GOING UP IN FLAMES?

REF: A. A) 04 TASHKENT 2993


B. B) ASHGABAT 1044

C. C) ASHGABAT 1011

D. D) ASHGABAT 957

Classified By: ADCM Heather Troutman for Reasons 1.4 (B) and (D)

Summary
-------



1. (C) The Yashyldepe Oil and Gas Development Organization
(YOGDO) took operational control of Turkmenistan's portion of
the Yashyldepe oil and natural gas field from Uzbekistan in


2005. YOGDO officials ascribe the flaring of oil and gas by
Uzbekistan across the border as spiteful retribution for the
change in field control, and also blame Uzbek actions for the
significant decrease in field strength. A network of
pipelines is planned to link a liquefied natural gas unit
currently under construction to distribution facilities on
Turkmenistan's side of the border. Turkmenistan's pledges to
feed a Chinese natural gas pipeline by 2009 with 30 billion
cubic meters from Amu Darya right bank reserves seem unlikely
without tapping into larger fields elsewhere in Turkmenistan.
End summary.

Parting Ways on the Right Bank


--------------------------





2. (SBU) During a September 29 visit to the right bank of
the Amu Darya River, embassy personnel met representatives of
the Yashyldepe Oil and Gas Development Organization (YOGDO)
and subsequently toured the Yashyldepe field along the Uzbek
border. Turkmenistan Ministry of Foreign Affairs (MFA) and
National Security representatives accompanied embassy during
the visit.



3. (SBU) YOGDO chief Toydurdy Durdyev told embassy that
Uzbekistan developed the Yashyldepe field in the 1990s.
Uzbek personnel, he explained, built all water, natural gas
processing and related field infrastructure and operated the
field through facilities mostly located on the Uzbek side of
the border until May 2005. According to Durdyev, President
Niyazov established the YOGDO and simultaneously transferred
Turkmenistan's Yashyldepe wells to the YOGDO in November


2004. (Note: The Yashyldepe field is also called Kokdumalak
on the Uzbek side of the border. Reftel A provides some
additional context. End Note.) The YOGDO began operating 15
of the 36 wells in November 2005.

This Land Was Not Made for You and Me


--------------------------





4. (SBU) The May 2005 ejection of the Uzbeks from
Turkmenistan's portion of the Yashyldepe field has not, in
Durdyev's view, prevented the Uzbeks from depleting
Turkmenistan's oil and gas reserves. "This is not a
conclusion," Durdyev added, "this must be the case." "Why
else," he reasoned, "would the natural gas field strength
have decreased so much?" As "proof," Durdyev cited a
decrease in natural gas pressure from 530 atmospheres to the
current range of 150-170 atmospheres. "When you visit the
field," he cautioned embassy, "don,t be alarmed by all of
the fires. We don,t know why the Uzbeks are burning

everything." Durdyev intimated that the Uzbeks were drawing
down and burning oil and gas from the shared field to spite
Turkmenistan. He noted that local crude oil has a high
sulfur content, which combined with prevailing wind patterns,
meant that the Uzbeks were polluting Turkmenistan. Durdyev
added that the Uzbeks had adopted a similar strategy at the
Samandepe field north of Yashyldepe.



5. (SBU) As embassy officer approached the Yashyldepe field,
located two hours' drive southeast of Turkmenabat, about 20
flares, nearly a third of which burned smoky oil, heralded
our arrival. All but two of the flares were on the Uzbek
side of the border. (Note: Our on-site guide estimated the
two Turkmen natural gas flares burn 30,000 cubic meters
daily. End Note.) Contrary to assurances by our MFA minder

ASHGABAT 00001054 002 OF 003


that border disagreements in the Yashyldepe region had been
settled, personnel working the field claimed that the Uzbeks
had seized two Turkmen wells by moving the fence demarcating
the border. Watchtowers and edgy border guards underscored
tensions local personnel described in the area.

Starting from Scratch


--------------------------





6. (SBU) Within site of the Uzbek storage tank farm, natural
gas compressor station, oil treatment facilities and other
infrastructure across the border, a Turkish firm has begun
laying the foundations for a combined desulfurization and
liquefied natural gas (LNG) unit to be built by the Canadian
firm Thermo Design on Turkmenistan's side of the field.
Durdyev confirmed that the YOGDO is still waiting for new
pipes to connect Yashyldepe to a terminal facility at the Amu
Darya river town of Palvart. Given Yashyldepe's daily crude
oil production of 1,500 tons, a small diameter pipeline
currently transports Yashyldepe's crude oil from the on-site
10,000-ton storage facility to the Palvart rail terminal.
(Note: Palvart also has a crude oil storage capacity of
10,000 tons. Yashyldepe crude oil loaded at Palvart supplies
roughly half of the Seydi refinery's feeder stock. Reftel B
discussed the Seydi facility. End Note.)

Wishing Well


--------------------------





7. (SBU) In addition to 15 oil and condensate wells, the
YOGDO operates two natural gas wells to fuel field
operations. As previous operations steered natural gas
production to the Uzbek side of the border, the remaining 19
(mostly natural gas) wells lack links to infrastructure on
Turkmenistan's side of the border. As a result, these wells
remain idle. Durdyev noted that the natural gas wells
require substantial work, but anticipated recommissioning
them once infrastructure work is completed.



8. (SBU) Although commentators at Ashgabat's late September
oil and gas conference (reftel C) predicted annual Amu Darya
right bank natural gas production of 30 billion cubic meters
(bcm), Durdyev refused to estimate the size of Amu Darya
right bank natural gas reserves. However, he admitted having
only limited drilling and surveying data from the Yashyldepe
field. When asked about regional survey data compiled by
Exxon Mobil during the 1990s, Durdyev speculated that the
data might be in Tashkent or Ashgabat.

The Chinese Are Coming?


--------------------------





9. (SBU) Amidst plans to construct a pipeline to transport
30 bcm of Amu Darya right bank natural gas to China annually
starting in 2009, embassy asked Durdyev to outline his
understanding of Chinese activities in the area. Durdyev
expressed ignorance of the issue, and suggested that the
Chinese might be in contact with one of the two research
institutes affiliated with the Ministry of Oil and Gas.
Embassy observed no evidence of a Chinese presence on the
right bank of the Amu Darya during this visit, but did not
have time to survey the entire area.

Comment


--------------------------





10. (C) Although there may be geological explanations for
decreased Yashyldepe field pressure, YOGDO personnel seem
convinced that the Uzbeks are to blame. Embassy understands
that disagreements over the sharing of field production may
have precipitated the May 2005 ejection of the Uzbeks from
Turkmenistan's side of the field. Given the size of Uzbek
operations across the border and the amount of flaring
observed, it is feasible that the Uzbeks are pushing ahead
full throttle in developing the field regardless of any
objections from Turkmenistan.



11. (C) As any pipeline constructed to transport right bank

ASHGABAT 00001054 003 OF 003


Amu Darya natural gas to China starting in 2009 would cross
Uzbek territory, Uzbekistan's tacit agreement to the deal
would be required. If Turkmenistan is committed to this deal
with China, it may have to tolerate continued Uzbek depletion
of Turkmenistan's border fields or else risk Uzbek
interference in the transit of natural gas from Turkmenistan
through Uzbekistan to China. While other fields and
infrastructure can be developed by 2009, the state of
Turkmenistan's Yashyldepe field raises questions about
Turkmenistan's ability to supply China solely from the Amu
Darya's right bank alone. In light of scarce data regarding
Turkmenistan's Amu Darya right bank reserves, the Chinese may
be interested in sourcing natural gas from the mammoth
Dovletabad natural gas field. However, as Dovletabad is a
main source of natural gas for the CAC pipeline network and
the recent Gazprom deal (reftel D), Chinese demands on
Dovletabad might conflict with Turkmenistan's supply
guarantees to Gazprom. Embassy will continue to focus
attention on Dovletabad and Amu Darya natural gas
developments. End Comment.
BRUSH