TURKMENISTAN ENERGY: CONOCOPHILLIPS/LUKOIL HOPE

C O N F I D E N T I A L ASHGABAT 000829 SIPDIS SIPDIS STATE FOR SCA/CEN, EUR/CARC, EUR/RUS, EEB PLEASE PASS TO TDA DAN STEIN E.O. 12958: DECL: 08/10/2017 TAGS: PGOV PREL EPET EINV RS TX SUBJECT: TURKMENISTAN ENERGY: CONOCOPHILLIPS/LUKOIL HOPE FOR AGREEMENT BY SEPTEMBER REF: ASHGABAT 0774 Classified By: CDA RICHARD E. HOAGLAND FOR REASONS 1.4 (B) AND (D) ¶1. (C) Charge met briefly late evening August 9 with ConocoPhillips Russia Inc. executives President for Russia and Caspian Region Don Wallette and Vice President for Exploration Tim Wallace. Houston-based Vice President for Upstream Bill Berry had already departed Turkmenistan. The meeting was brief and late because their meeting schedule had been disrupted all week since Turkmenistan's major oil and gas figures were in Kazakhstan drafting agreements for the Caspian Littoral and Central Asia Three Pipelines to meet the Tripartite Summit's September deadline for "concrete results." ConocoPhillips and LukOil are 50-50 partners, with ConocoPhillips holding "negative control" -- it can prevent but not force forward policies. ¶2. (C) Wallette said the purpose of their visit was to push access for their partner, LukOil, to Caspian blocs 19, 20, and 21. Wallace commented they hope their "aggressive schedule" will lead to an agreement by September. Asked why they are optimistic, Wallette responded they are taking advantage of a "window of exclusivity," since Turkmenistan is not inviting new competition. ¶3. (SBU) State Agency for the Use of Hydrocarbon Resources Myradov told them on August 9 Turkmenistan does not want joint ventures and is only in the business of providing licences for exploration and extraction activities. ¶4. (C) COMMENT: Wallette and Wallace gave the impression they are relying on their LukOil partner to give them a leg up. They gave no indication LukOil's interest in off-shore exploration has waned recently, as TNK/BP executives speculated reftel. END COMMENT. HOAGLAND