Identifier
Created
Classification
Origin
08ASHGABAT1237
2008-09-16 13:31:00
CONFIDENTIAL
Embassy Ashgabat
Cable title:
TURKMENISTAN: AUSTRIAN ENERGY COMPANY OMV SMELLS
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C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001237
SIPDIS
STATE FOR SCA/CEN; EEB
PLEASE PASS TO USTDA DAN STEIN
USEU BRUSSELS FOR SPECIAL ENVOY GRAY
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HUEPER
E.O. 12958: DECL: 09/15/2018
TAGS: PGOV PREL EPET TX AU
SUBJECT: TURKMENISTAN: AUSTRIAN ENERGY COMPANY OMV SMELLS
FEAR AMONG TURKMEN OFFICIALS AFTER GEORGIA
REF: A. ASHGABAT 0771
B. ASHGABAT 1205
Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d).
C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001237
SIPDIS
STATE FOR SCA/CEN; EEB
PLEASE PASS TO USTDA DAN STEIN
USEU BRUSSELS FOR SPECIAL ENVOY GRAY
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HUEPER
E.O. 12958: DECL: 09/15/2018
TAGS: PGOV PREL EPET TX AU
SUBJECT: TURKMENISTAN: AUSTRIAN ENERGY COMPANY OMV SMELLS
FEAR AMONG TURKMEN OFFICIALS AFTER GEORGIA
REF: A. ASHGABAT 0771
B. ASHGABAT 1205
Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d).
1. (C) SUMMARY: The Austrian energy company OMV has been
having trouble communicating its development ideas to
government officials in Ashgabat, and its regional
representative believes that the Russian military actions in
Georgia may be causing some hand wringing at the highest
levels. A key element of OMV's proposed work here relates to
building a gas pipeline connecting Turkmen gas fields to
Azerbaijan's infrastructure. OMV believes the project might
constitute a calculated risk on the part of Turkmen officials
who possibly fear a negative Russian reaction could come in
response. This heightened sensitivity may be one reason for
the government's silence on a number of energy development
decisions, as it ponders its foreign and economic policy
options. END SUMMARY.
2. (C) Austrian energy company OMV's Caspian region country
manager Wolfgang Sporrer met with POLOFF September 15. He
described the Turkmen government representatives at the
conference as uncommunicative and cold. He said that none of
the Turkmen officials had met with a single private company
representative during the course of the conference.
Officials had met with high-level representatives of national
companies SOCAR and Gazprom, but had rebuffed requests to
meet with anyone else.
3. (C) Sporrer said he and others in the corporate oil and
gas community have become aware of a new level of sensitivity
on the part of Turkmen energy officials about making energy
development decisions that will upset the Russians. He noted
that local Turkmen with whom he spoke recently had become
very concerned that Russia's deployment of troops into
Georgia last month proved that Russia is still ready to act
to protect its interests in the near abroad, and he is
convinced that the events have perceptibly altered government
officials' views on energy development and the potential
export of resources westward.
4. (C) Although OMV has not yet submitted any formal
proposals to the State Agency for the Management and Use of
Hydrocarbon Resources, they are interested in constructing an
"inter-connector" pipeline between Turkmenistan and
Azerbaijan. The company is most interested, at this point,
in buying Turkmen gas from the Livanov field in Block I,
currently being worked by Petronas, connecting the field's
production to existent infrastructure at nearby
Azerbaijan-controlled gas fields such as Chirag, thus putting
Turkmen gas into westward gas transport infrastructure. It
is also interested in onshore work in the Amu Darya basin.
(COMMENT: Turkmen officials have indicated to U.S. officials
and separately to Chevron that the country prefers that
Turkmen companies work onshore. septels. END COMMENT.)
5. (C) Since OMV has not had good success getting meetings
with Turkmen energy officials here, the company has
petitioned the Austrian President Heinz Fischer to raise the
company's development ideas with President Berdimuhamedov
when he makes an official visit to Vienna, possibly in early
November.
6. (C) Sporrer indicated that OMV still has plans to open
an office in Ashgabat, but the process is moving slowly. He
refused to name the company's potential local representative,
because salary negotiations are still in play, but he
ASHGABAT 00001237 002 OF 002
acknowledged that the representative would ultimately be
"quite expensive." (NOTE: OMV is probably preparing to hire
Murad Nepesov, a young, talented "oil trader" who may have
business connections to former President Niyazov's son,
Murad. (Ref A). END NOTE.)
7. (C) COMMENT: Sporrer is not the first Western energy
representative to describe "arms length" treatment by the
Turkmen and ascribe it to Turkmen concern about Russian
reaction/pressure in the wake of the Georgia conflict.
Hungary's Nabucco ambassador Mihaly Bayer told us the same
thing (Ref B). Despite any possible chill, companies are
continuing to knock on the door, hoping someone will answer
soon. END COMMENT.
CURRAN
SIPDIS
STATE FOR SCA/CEN; EEB
PLEASE PASS TO USTDA DAN STEIN
USEU BRUSSELS FOR SPECIAL ENVOY GRAY
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HUEPER
E.O. 12958: DECL: 09/15/2018
TAGS: PGOV PREL EPET TX AU
SUBJECT: TURKMENISTAN: AUSTRIAN ENERGY COMPANY OMV SMELLS
FEAR AMONG TURKMEN OFFICIALS AFTER GEORGIA
REF: A. ASHGABAT 0771
B. ASHGABAT 1205
Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d).
1. (C) SUMMARY: The Austrian energy company OMV has been
having trouble communicating its development ideas to
government officials in Ashgabat, and its regional
representative believes that the Russian military actions in
Georgia may be causing some hand wringing at the highest
levels. A key element of OMV's proposed work here relates to
building a gas pipeline connecting Turkmen gas fields to
Azerbaijan's infrastructure. OMV believes the project might
constitute a calculated risk on the part of Turkmen officials
who possibly fear a negative Russian reaction could come in
response. This heightened sensitivity may be one reason for
the government's silence on a number of energy development
decisions, as it ponders its foreign and economic policy
options. END SUMMARY.
2. (C) Austrian energy company OMV's Caspian region country
manager Wolfgang Sporrer met with POLOFF September 15. He
described the Turkmen government representatives at the
conference as uncommunicative and cold. He said that none of
the Turkmen officials had met with a single private company
representative during the course of the conference.
Officials had met with high-level representatives of national
companies SOCAR and Gazprom, but had rebuffed requests to
meet with anyone else.
3. (C) Sporrer said he and others in the corporate oil and
gas community have become aware of a new level of sensitivity
on the part of Turkmen energy officials about making energy
development decisions that will upset the Russians. He noted
that local Turkmen with whom he spoke recently had become
very concerned that Russia's deployment of troops into
Georgia last month proved that Russia is still ready to act
to protect its interests in the near abroad, and he is
convinced that the events have perceptibly altered government
officials' views on energy development and the potential
export of resources westward.
4. (C) Although OMV has not yet submitted any formal
proposals to the State Agency for the Management and Use of
Hydrocarbon Resources, they are interested in constructing an
"inter-connector" pipeline between Turkmenistan and
Azerbaijan. The company is most interested, at this point,
in buying Turkmen gas from the Livanov field in Block I,
currently being worked by Petronas, connecting the field's
production to existent infrastructure at nearby
Azerbaijan-controlled gas fields such as Chirag, thus putting
Turkmen gas into westward gas transport infrastructure. It
is also interested in onshore work in the Amu Darya basin.
(COMMENT: Turkmen officials have indicated to U.S. officials
and separately to Chevron that the country prefers that
Turkmen companies work onshore. septels. END COMMENT.)
5. (C) Since OMV has not had good success getting meetings
with Turkmen energy officials here, the company has
petitioned the Austrian President Heinz Fischer to raise the
company's development ideas with President Berdimuhamedov
when he makes an official visit to Vienna, possibly in early
November.
6. (C) Sporrer indicated that OMV still has plans to open
an office in Ashgabat, but the process is moving slowly. He
refused to name the company's potential local representative,
because salary negotiations are still in play, but he
ASHGABAT 00001237 002 OF 002
acknowledged that the representative would ultimately be
"quite expensive." (NOTE: OMV is probably preparing to hire
Murad Nepesov, a young, talented "oil trader" who may have
business connections to former President Niyazov's son,
Murad. (Ref A). END NOTE.)
7. (C) COMMENT: Sporrer is not the first Western energy
representative to describe "arms length" treatment by the
Turkmen and ascribe it to Turkmen concern about Russian
reaction/pressure in the wake of the Georgia conflict.
Hungary's Nabucco ambassador Mihaly Bayer told us the same
thing (Ref B). Despite any possible chill, companies are
continuing to knock on the door, hoping someone will answer
soon. END COMMENT.
CURRAN