Identifier
Created
Classification
Origin
07ASHGABAT1260
2007-11-21 11:03:00
CONFIDENTIAL
Embassy Ashgabat
Cable title:
SECRETARY OF ENERGY SAMUEL W. BODMAN'S MEETING
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C O N F I D E N T I A L SECTION 01 OF 03 ASHGABAT 001260
SIPDIS
SIPDIS
STATE FOR SCA/CEN, EUR/CARC, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
E.O. 12958: DECL: 11/21/2017
TAGS: PGOV PREL EPET EINV AF AJ KZ RS TX
SUBJECT: SECRETARY OF ENERGY SAMUEL W. BODMAN'S MEETING
WITH TURKMENISTAN'S DEPUTY PRIME MINISTER FOR OIL AND GAS
TACHBERDI TAGIYEV (11/15/07)
Classified By: CHARGE RICHARD E. HOAGLAND FOR REASONS 1.4 (B),(D)
C O N F I D E N T I A L SECTION 01 OF 03 ASHGABAT 001260
SIPDIS
SIPDIS
STATE FOR SCA/CEN, EUR/CARC, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
E.O. 12958: DECL: 11/21/2017
TAGS: PGOV PREL EPET EINV AF AJ KZ RS TX
SUBJECT: SECRETARY OF ENERGY SAMUEL W. BODMAN'S MEETING
WITH TURKMENISTAN'S DEPUTY PRIME MINISTER FOR OIL AND GAS
TACHBERDI TAGIYEV (11/15/07)
Classified By: CHARGE RICHARD E. HOAGLAND FOR REASONS 1.4 (B),(D)
1. (U) U.S. PARTICIPANTS:
Secretary of Energy Samuel W. Bodman
SIPDIS
Senior Adviser Molly Williamson
Assistant Secretary Karen Harbert
Public Affairs Director Andrew Beck
Charge d,affaires Richard Hoagland
TURKMENISTAN PARTICIPANTS:
Deputy Prime Minister for Oil and Gas Tachberdi Tagiyev
Minister for Oil and Gas Baymurat Hojamuhammedov
Chairman of TurkmenOil Garyagdy Tashliyev
Chairman of TurkmenGas Yagshygeldi Kakayev
Chairman of TurkmenGeologika Sapargeldi Jumayev
2. (C) SUMMARY: Secretary of Energy Bodman encouraged
Deputy Prime Minister Tagiyev to work together with
Azerbaijan and Kazakhstan to develop Caspian energy
resources, and to consider a Trans-Caspian Pipeline (TCP) so
that Turkmenistan can sell its gas directly to the West.
Tagiyev said a TCP has not been ruled out. He added that "so
far" Turkmenistan sells its gas at its borders. If this &so
far8 was not a slip of the tongue, it could indicate this
until now hard-and-fast policy might be under discussion
behind closed doors. END SUMMARY.
3. (SBU) U.S. Secretary of Energy Samuel W. Bodman met for
45 minutes on November 15 with Deputy Prime Minister for Oil
and Gas Tachberdy Tagiyev, who expressed his government,s
gratitude for the Secretary,s visit and for his speech
earlier in the day at the Turkmenistan International Oil and
Gas Exhibition (TIOGE-2007). Tagiyev cited Turkmenistan,s
publicly available statistics of its hydrocarbon reserves.
He said Turkmenistan intends to produce annually by 2030 110
million tons of oil and 250 billion cubic meters of natural
gas. He explained that Turkmenistan currently sells the
lion,s share of its natural gas to Russia "because that,s
where the existing pipelines go." He said that
Turkmenistan,s door is wide open to international energy
investors in the Caspian Sea -- of 32 blocks available, only
four are currently being exploited.
4. (SBU) Tagiyev noted that Turkmenistan has been producing
oil for over 130 years. The Scandinavian Nobel arrived in
Chelikan in 1864 and began extracting near-surface oil.
After independence in 1991, Turkmenistan began buying most of
its energy-sector equipment from the United States. He
encouraged Secretary Bodman to think of the current
development of the energy sector as in sync with the
development of the city of Ashgabat. In earlier days, you
could see nothing but broken-down Soviet cars on the streets,
but now the streets are packed with expensive European and
Japanese sedans and SUVs.
5. (C) Tagiyev noted Turkmenistan has excellent relations
with U.S., European, and Japanese energy companies. He
commented ExxonMobil in the 1990s had the first on-shore PSA,
but "ran away for some reason, maybe Afghanistan.
Turkmenistan does not want that to happen this time around."
TAGIYEV REPEATS THE TALKING POINTS
6. (SBU) Tagiyev reiterated Turkmenistan,s current
policies: priority will be given to gas and oil refining for
ASHGABAT 00001260 002 OF 003
finished products, the city and port of Turkmenbashy will be
fully modernized, the Saydi Refinery at Turkmenabat will be
modernized and enlarged, and existing on-shore fields will
boost production with the help of foreign-company service
contracts.
7. (C) He confirmed that "very soon" Turkmenistan will sign
an agreement that the ConocoPhillips/Lukoil partnership will
develop Caspian blocks 19, 20, and 21.
8. (U) He proudly noted domestic natural gas, electricity,
water, and salt are free for Turkmenistanis, and gasoline is
cheaper than anywhere else in the world -- $1 for 50 liters.
9. (U) Tagiyev said President Berdimuhamedov pays "special
attention" to education and new technologies and has "huge
plans" for these sectors. He noted Turkmenistan understands
it needs foreign companies and foreign investment.
Therefore, Turkmenistan,s doors are open to everyone.
TRILATERAL COOPERATION
10. (C) Secretary Bodman noted Turkmenistan,s friendship
with Kazakhstan and Azerbaijan, and encouraged the three
countries to work together to seize the current
opportunities, which Secretary Bodman said he can "smell in
the air." He said the problem with Kashegan in Kazakhstan is
that Kazakhstan had made a wrong initial choice of operator,
and he encouraged Turkmenistan to do careful due diligence in
choosing its new partners.
TRANS-CASPIAN PIPELINE
11. (C) Secretary Bodman noted the importance of developing
the Trans-Caspian Pipeline to enable Turkmenistan to deliver
its natural gas to the West. He emphasized this view is not
anti-Russia, but rather pro-Turkmenistan. Countries are more
successful when they have multiple partners. Those reliant
on a single partner can be subject to "external political
will." The Secretary noted that even Europe has come around
to this position and now has a real desire for more sources
of gas. He said, "My main message to you and to your
President is that higher prices through multi-partner
competition will be in your own interest." He added that the
United States frankly doesn,t care if Turkmenistan,s new
energy partners are European or American. The important
point is that Turkmenistan diversify its partners. "This is
not in our interest; it,s in your interest."
12. (C) Tagiyev replied, "You are right. President
Berdimuhamedov has emphasized we need a number of pipelines,
and TCP should be one of them -- although that is still an
open issue. We want to sell our gas in all directions, but
the situation in Afghanistan and Pakistan is hindering any
plans to sell southward." He then added, "So far (poka),we
sell our gas at the border."
13. (C) Secretary Bodman concluded, "It is important for
Turkmenistan to take advantage of current market
opportunities. The results for your people will be
extraordinary. The future of the country is in your hands."
14. (C) COMMENT: Tagiyev is a conservative technocrat. He
had nothing especially new to say beyond Turkmenistan,s
well-known talking points. Except for one thing, which may
have been a slip of the tongue, or could be significant: "So
far, we sell our gas at the border." We have never before
ASHGABAT 00001260 003 OF 003
heard a Turkman official say "so far." An optimistic
interpretation is that this policy is now being debated
behind closed doors. END COMMENT.
15. (U) Secretary Bodman's party did not have an opportunity
to clear this cable.
HOAGLAND
SIPDIS
SIPDIS
STATE FOR SCA/CEN, EUR/CARC, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
E.O. 12958: DECL: 11/21/2017
TAGS: PGOV PREL EPET EINV AF AJ KZ RS TX
SUBJECT: SECRETARY OF ENERGY SAMUEL W. BODMAN'S MEETING
WITH TURKMENISTAN'S DEPUTY PRIME MINISTER FOR OIL AND GAS
TACHBERDI TAGIYEV (11/15/07)
Classified By: CHARGE RICHARD E. HOAGLAND FOR REASONS 1.4 (B),(D)
1. (U) U.S. PARTICIPANTS:
Secretary of Energy Samuel W. Bodman
SIPDIS
Senior Adviser Molly Williamson
Assistant Secretary Karen Harbert
Public Affairs Director Andrew Beck
Charge d,affaires Richard Hoagland
TURKMENISTAN PARTICIPANTS:
Deputy Prime Minister for Oil and Gas Tachberdi Tagiyev
Minister for Oil and Gas Baymurat Hojamuhammedov
Chairman of TurkmenOil Garyagdy Tashliyev
Chairman of TurkmenGas Yagshygeldi Kakayev
Chairman of TurkmenGeologika Sapargeldi Jumayev
2. (C) SUMMARY: Secretary of Energy Bodman encouraged
Deputy Prime Minister Tagiyev to work together with
Azerbaijan and Kazakhstan to develop Caspian energy
resources, and to consider a Trans-Caspian Pipeline (TCP) so
that Turkmenistan can sell its gas directly to the West.
Tagiyev said a TCP has not been ruled out. He added that "so
far" Turkmenistan sells its gas at its borders. If this &so
far8 was not a slip of the tongue, it could indicate this
until now hard-and-fast policy might be under discussion
behind closed doors. END SUMMARY.
3. (SBU) U.S. Secretary of Energy Samuel W. Bodman met for
45 minutes on November 15 with Deputy Prime Minister for Oil
and Gas Tachberdy Tagiyev, who expressed his government,s
gratitude for the Secretary,s visit and for his speech
earlier in the day at the Turkmenistan International Oil and
Gas Exhibition (TIOGE-2007). Tagiyev cited Turkmenistan,s
publicly available statistics of its hydrocarbon reserves.
He said Turkmenistan intends to produce annually by 2030 110
million tons of oil and 250 billion cubic meters of natural
gas. He explained that Turkmenistan currently sells the
lion,s share of its natural gas to Russia "because that,s
where the existing pipelines go." He said that
Turkmenistan,s door is wide open to international energy
investors in the Caspian Sea -- of 32 blocks available, only
four are currently being exploited.
4. (SBU) Tagiyev noted that Turkmenistan has been producing
oil for over 130 years. The Scandinavian Nobel arrived in
Chelikan in 1864 and began extracting near-surface oil.
After independence in 1991, Turkmenistan began buying most of
its energy-sector equipment from the United States. He
encouraged Secretary Bodman to think of the current
development of the energy sector as in sync with the
development of the city of Ashgabat. In earlier days, you
could see nothing but broken-down Soviet cars on the streets,
but now the streets are packed with expensive European and
Japanese sedans and SUVs.
5. (C) Tagiyev noted Turkmenistan has excellent relations
with U.S., European, and Japanese energy companies. He
commented ExxonMobil in the 1990s had the first on-shore PSA,
but "ran away for some reason, maybe Afghanistan.
Turkmenistan does not want that to happen this time around."
TAGIYEV REPEATS THE TALKING POINTS
6. (SBU) Tagiyev reiterated Turkmenistan,s current
policies: priority will be given to gas and oil refining for
ASHGABAT 00001260 002 OF 003
finished products, the city and port of Turkmenbashy will be
fully modernized, the Saydi Refinery at Turkmenabat will be
modernized and enlarged, and existing on-shore fields will
boost production with the help of foreign-company service
contracts.
7. (C) He confirmed that "very soon" Turkmenistan will sign
an agreement that the ConocoPhillips/Lukoil partnership will
develop Caspian blocks 19, 20, and 21.
8. (U) He proudly noted domestic natural gas, electricity,
water, and salt are free for Turkmenistanis, and gasoline is
cheaper than anywhere else in the world -- $1 for 50 liters.
9. (U) Tagiyev said President Berdimuhamedov pays "special
attention" to education and new technologies and has "huge
plans" for these sectors. He noted Turkmenistan understands
it needs foreign companies and foreign investment.
Therefore, Turkmenistan,s doors are open to everyone.
TRILATERAL COOPERATION
10. (C) Secretary Bodman noted Turkmenistan,s friendship
with Kazakhstan and Azerbaijan, and encouraged the three
countries to work together to seize the current
opportunities, which Secretary Bodman said he can "smell in
the air." He said the problem with Kashegan in Kazakhstan is
that Kazakhstan had made a wrong initial choice of operator,
and he encouraged Turkmenistan to do careful due diligence in
choosing its new partners.
TRANS-CASPIAN PIPELINE
11. (C) Secretary Bodman noted the importance of developing
the Trans-Caspian Pipeline to enable Turkmenistan to deliver
its natural gas to the West. He emphasized this view is not
anti-Russia, but rather pro-Turkmenistan. Countries are more
successful when they have multiple partners. Those reliant
on a single partner can be subject to "external political
will." The Secretary noted that even Europe has come around
to this position and now has a real desire for more sources
of gas. He said, "My main message to you and to your
President is that higher prices through multi-partner
competition will be in your own interest." He added that the
United States frankly doesn,t care if Turkmenistan,s new
energy partners are European or American. The important
point is that Turkmenistan diversify its partners. "This is
not in our interest; it,s in your interest."
12. (C) Tagiyev replied, "You are right. President
Berdimuhamedov has emphasized we need a number of pipelines,
and TCP should be one of them -- although that is still an
open issue. We want to sell our gas in all directions, but
the situation in Afghanistan and Pakistan is hindering any
plans to sell southward." He then added, "So far (poka),we
sell our gas at the border."
13. (C) Secretary Bodman concluded, "It is important for
Turkmenistan to take advantage of current market
opportunities. The results for your people will be
extraordinary. The future of the country is in your hands."
14. (C) COMMENT: Tagiyev is a conservative technocrat. He
had nothing especially new to say beyond Turkmenistan,s
well-known talking points. Except for one thing, which may
have been a slip of the tongue, or could be significant: "So
far, we sell our gas at the border." We have never before
ASHGABAT 00001260 003 OF 003
heard a Turkman official say "so far." An optimistic
interpretation is that this policy is now being debated
behind closed doors. END COMMENT.
15. (U) Secretary Bodman's party did not have an opportunity
to clear this cable.
HOAGLAND