TURKMENISTAN/AZERBAIJAN: U.S. BUSINESSMAN CLAIMS

C O N F I D E N T I A L ASHGABAT 001067 SIPDIS STATE FOR SCA/CEN, EUR/CARC, EEB ENERGY FOR EKIMOFF/THOMPSON COMMERCE FOR HUEPER E.O. 12958: DECL: 08/15/2018 TAGS: PREL PGOV EPET AJ IR TX SUBJECT: TURKMENISTAN/AZERBAIJAN: U.S. BUSINESSMAN CLAIMS MORE THAN ONE GUNBOAT EPISODE REF: A. ASHGABAT 973 ¶B. ASHGABAT 964 ¶C. ASHGABAT 958 ¶D. ASHGABAT 884 Classified By: Charge d'Affaires Sylvia Reed Curran for reasons 1.4(B) and (D). ¶1. (C) The AMCIT country manager for Bertling Logistics, a Houston-based firm that provides logistical support for many of the foreign oil companies active in Turkmenistan, said during an August 15 meeting that he has been told that there has been more than one incident involving Azeri gunboats in and around Turkmenistan's Caspian block III in recent months. (NOTE: Turkmenistan's block III contains the Serdar/Kyapaz and Omar-Osman/Azeri-Chirag-Guneshli (ACG) fields, whose possession is disputed by Turkmenistan and Azerbaijan. The Azeri claim line runs through the eastern part of block III between the Serdar/Kyapaz field and block I, which borders block III in the east. END NOTE.) Claiming that he received this information from Canadian oil company Buried Hill, a client and the company which has a contract with the Government of Turkmenistan to work block III, he said that in addition to the April incident that took place in Turkmenistan's (undisputed) block I, there has been at least one more incident, in May. In the second episode, the Azeri gunboats again intercepted a vessel that Buried Hill had hired to do some research in block III related to its plans to begin drilling in the first quarter of 2009. Buried Hill told him this time calls were made from Ashgabat to Baku, and that the Azeri vessels subsequently backed off. According to Buried Hill, there were also Iranian vessels in the area at the time of the interception. ¶2. (C) The Bertling country manager noted that there are rumors and strong speculation circulating among foreign oil firms that BP, the company drilling in ACG, may have drilled a diagonal spur off its main bore hole toward the Serdar/Kyapaz field. This, he suggested, would explain why the Iranian vessels were in the area -- and why the Azeri coast guard appears to be so jumpy about any vessels that are not clearly in transit. However, he added, these incidents are also continuing to underline to both Turkmenistan and the foreign companies working in its Caspian blocks that there is not the naval capacity to protect hydrocarbon rigs and infrastructure in Turkmen waters. ¶3. (C) COMMENT: The country manager could not give specifics -- either dates, the number of vessels involved in the May incident or the name of the research vessel hired by Buried Hill involved in the second incident. However, this information would go far in explaining the two very different perceptions: while the Azeris may feel that they did their part in calling off their gunboats in the second incident, the fact that it occurred at all -- and that Turkmenistan was incapable of responding -- undoubtedly would be grating to President Berdimuhamedov. The manager's suggestion that BP might be drilling diagonally toward the Serdar field would also help to explain why Turkmenistan's officials are continuing to claim that "they (the Azeris) are stealing our gas." END SUMMARY. CURRAN