Identifier
Created
Classification
Origin
08ASHGABAT1390
2008-10-22 11:44:00
CONFIDENTIAL
Embassy Ashgabat
Cable title:
TURKMENISTAN: CONOCOPHILLIPS SENSES ITS PROSPECTS
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C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001390
SIPDIS
STATE FOR SCA/CEN, EEB
E.O. 12958: DECL: 10/21/2018
TAGS: EPET PGOV PREL TX
SUBJECT: TURKMENISTAN: CONOCOPHILLIPS SENSES ITS PROSPECTS
FOR BLOCK 21 ARE FADING
REF: ASHGABAT 1325
Classified By: Charge d'Affaires a.i. Sylvia Reed Curran for reasons
C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001390
SIPDIS
STATE FOR SCA/CEN, EEB
E.O. 12958: DECL: 10/21/2018
TAGS: EPET PGOV PREL TX
SUBJECT: TURKMENISTAN: CONOCOPHILLIPS SENSES ITS PROSPECTS
FOR BLOCK 21 ARE FADING
REF: ASHGABAT 1325
Classified By: Charge d'Affaires a.i. Sylvia Reed Curran for reasons 1.
4 (B) and (D).
1. (C) SUMMARY: Stonewalling by the State Agency for
Management and Use of Hydrocarbon Resources, combined with
reports of Turkmenistan government negotiations with BP, have
made ConocoPhillips concerned that its prospects for Block 21
are slipping away. Moreover, despite repeated overtures by
the company, it has not been able to engage with Turkmen
officials about its offshore proposal for months. In the
meantime, the company is moving ahead with the procedure
necessary to open an office in Ashgabat, but is noncommittal
about when it might be staffed. END SUMMARY.
CLOSER TO OPENING AN ASHGABAT OFFICE
2. (C) On October 21, ConocoPhillips External Affairs
Director Raikhan Ismailova met with poloff to provide an
update on the status of ConocoPhillips' activities in
Turkmenistan. The Ministry of Economics and Development has
given preliminary approval to ConocoPhillips' registration
package that will allow the company to open an Ashgabat
office. Ismailova was in town to pay a $3,000 registration
fee and visit potential office locations. She mentioned it
will still be several months before all necessary
documentation, for example a tax identification number and
import/export licenses, can be obtained. The company will
also have to hire a chief accountant locally, as required by
law, before it can open the office. Ismailova declined to
predict when an expat ConocoPhillips employee might take up
residence in Ashgabat.
STATE AGENCY STILL STONEWALLING ON OFFSHORE BLOCKS
3. (C) Ismailova reported that she had met with her contact
at the State Agency for Management and Use of Hydrocarbon
Resources, an employee named Meylis, and that she proposed
November 3 as the date for a meeting between ConocoPhillips
officials and State Agency Chief Yagshygeldi Kakayev to
discuss the company's offshore proposal. Meylis indicated
that Kakayev was not ready to see company officials and
conduct negotiations.
BP REPORTEDLY HAS INSIDE TRACK ON BLOCK 21
4. (C) According to Ismailova, the Turkmenistan government is
currently negotiating with BP for rights to Block 21. She
thinks a deal with BP will be announced during the November
20-21 Turkmenistan International Oil and Gas Exhibition. She
referred to rumors that President Berdimuhamedov has already
made the decision in BP's favor. Meylis had confirmed to
Ismailova that there were active negotiations with BP. When
Ismailova asked that ConocoPhillips be given the courtesy of
a meeting to be informed about any decision on Block 21 prior
to an announcement, Meylis said he couldn't comment, except
to say that "deals are being done above (his) level."
5. (C) Ismailova suspects that Kakayev might be putting off a
meeting with ConocoPhillips officials because he knows the
president has already made the decision in favor of BP. She
asserted that BP has had previous contact with President
Berdimuhamedov, including a "verbal exchange for something
significant." BP hosted a team of Turkmen oil and gas
officials in London around the time of the April conference
on Turkmenistan oil and gas, including a visit to offshore
drilling rig operations.
CONOCOPHILLIPS' PLANS FOR TIOGE
6. (C) ConocoPhillips plans to send a 10-person delegation to
TIOGE. However, if company officials are unable to meet with
Kakayev before that event, Ismailova suggested the company
might send a higher-level official in hopes that Kakayev
ASHGABAT 00001390 002 OF 002
would agree to a meeting. Ismailova added that the company
still wants to arrange a meeting for CEO Jim Mulva with the
president before the end of the year, which is when
ConocoPhillips' MOU is due to expire.
7. (C) COMMENT: While access to the highest levels of the
Turkmenistan government is crucial to ConocoPhillips' chances
for success, such access remains elusive. At the same time,
the Turkmen need foreign partners to develop the entirety of
their resources, not just Block 21. As such, the Turkmen
government would serve its own interests by remaining engaged
with companies that could be useful partners down the road.
END COMMENT.
CURRAN
SIPDIS
STATE FOR SCA/CEN, EEB
E.O. 12958: DECL: 10/21/2018
TAGS: EPET PGOV PREL TX
SUBJECT: TURKMENISTAN: CONOCOPHILLIPS SENSES ITS PROSPECTS
FOR BLOCK 21 ARE FADING
REF: ASHGABAT 1325
Classified By: Charge d'Affaires a.i. Sylvia Reed Curran for reasons 1.
4 (B) and (D).
1. (C) SUMMARY: Stonewalling by the State Agency for
Management and Use of Hydrocarbon Resources, combined with
reports of Turkmenistan government negotiations with BP, have
made ConocoPhillips concerned that its prospects for Block 21
are slipping away. Moreover, despite repeated overtures by
the company, it has not been able to engage with Turkmen
officials about its offshore proposal for months. In the
meantime, the company is moving ahead with the procedure
necessary to open an office in Ashgabat, but is noncommittal
about when it might be staffed. END SUMMARY.
CLOSER TO OPENING AN ASHGABAT OFFICE
2. (C) On October 21, ConocoPhillips External Affairs
Director Raikhan Ismailova met with poloff to provide an
update on the status of ConocoPhillips' activities in
Turkmenistan. The Ministry of Economics and Development has
given preliminary approval to ConocoPhillips' registration
package that will allow the company to open an Ashgabat
office. Ismailova was in town to pay a $3,000 registration
fee and visit potential office locations. She mentioned it
will still be several months before all necessary
documentation, for example a tax identification number and
import/export licenses, can be obtained. The company will
also have to hire a chief accountant locally, as required by
law, before it can open the office. Ismailova declined to
predict when an expat ConocoPhillips employee might take up
residence in Ashgabat.
STATE AGENCY STILL STONEWALLING ON OFFSHORE BLOCKS
3. (C) Ismailova reported that she had met with her contact
at the State Agency for Management and Use of Hydrocarbon
Resources, an employee named Meylis, and that she proposed
November 3 as the date for a meeting between ConocoPhillips
officials and State Agency Chief Yagshygeldi Kakayev to
discuss the company's offshore proposal. Meylis indicated
that Kakayev was not ready to see company officials and
conduct negotiations.
BP REPORTEDLY HAS INSIDE TRACK ON BLOCK 21
4. (C) According to Ismailova, the Turkmenistan government is
currently negotiating with BP for rights to Block 21. She
thinks a deal with BP will be announced during the November
20-21 Turkmenistan International Oil and Gas Exhibition. She
referred to rumors that President Berdimuhamedov has already
made the decision in BP's favor. Meylis had confirmed to
Ismailova that there were active negotiations with BP. When
Ismailova asked that ConocoPhillips be given the courtesy of
a meeting to be informed about any decision on Block 21 prior
to an announcement, Meylis said he couldn't comment, except
to say that "deals are being done above (his) level."
5. (C) Ismailova suspects that Kakayev might be putting off a
meeting with ConocoPhillips officials because he knows the
president has already made the decision in favor of BP. She
asserted that BP has had previous contact with President
Berdimuhamedov, including a "verbal exchange for something
significant." BP hosted a team of Turkmen oil and gas
officials in London around the time of the April conference
on Turkmenistan oil and gas, including a visit to offshore
drilling rig operations.
CONOCOPHILLIPS' PLANS FOR TIOGE
6. (C) ConocoPhillips plans to send a 10-person delegation to
TIOGE. However, if company officials are unable to meet with
Kakayev before that event, Ismailova suggested the company
might send a higher-level official in hopes that Kakayev
ASHGABAT 00001390 002 OF 002
would agree to a meeting. Ismailova added that the company
still wants to arrange a meeting for CEO Jim Mulva with the
president before the end of the year, which is when
ConocoPhillips' MOU is due to expire.
7. (C) COMMENT: While access to the highest levels of the
Turkmenistan government is crucial to ConocoPhillips' chances
for success, such access remains elusive. At the same time,
the Turkmen need foreign partners to develop the entirety of
their resources, not just Block 21. As such, the Turkmen
government would serve its own interests by remaining engaged
with companies that could be useful partners down the road.
END COMMENT.
CURRAN