TURKMENISTAN: CHEVRON OFFER OF TRAINING

C O N F I D E N T I A L ASHGABAT 001425 SIPDIS STATE FOR SCA/CEN, EEB PLEASE PASS TO USTDA DAN STEIN ENERGY FOR EKIMOFF, THOMPSON COMMERCE FOR HUEPER E.O. 12958: DECL: 10/30/2018 TAGS: PREL ECON EPET TX SUBJECT: TURKMENISTAN: CHEVRON OFFER OF TRAINING POTENTIALLY BEARING FRUIT REF: ASHGABAT 1354 Classified By: Charge Sylvia Reed curran for reasons 1.4 (b) and (d). ¶1. (C) The Chevron Amcit country manager told Charge October 30 that the company's proposals to provide training to Turkmen officials may be starting to bear some fruit. In early October, he sent a letter to State Agency for the Management and Use of Hydrocarbon Resources Director Yagshygeldi Kakayev, requesting the nomination of 30 participants to attend a two-day workshop on carbonate reservoirs, drilling in salt environments and operations in high-pressure, high-temperature, high H2S environments. In addition, he had proposed to Turkmen Gas head Baymurat Hojamuhammedov a workshop on project management, also for 30 officials (reftel). Although he is yet to hear back from Kakayev, Hojamuhammedov sent him a letter accepting the offer. The project management workshop is now scheduled for December 2-4. ¶2. (C) On October 29, the country manager met with Hojamuhammedov to follow up. The country manager said difference between this meeting and previous ones with the Turkmen Gas official was like night and day. He was more friendly and relaxed and was extremely appreciative of the workshop. When the country manager broached the idea of Chevron working onshore, Hojamuhammedov brought out a schematic that showed plans for developing South Yoloten and Osman. Eight facilities - seven in South Yoloten and one in Osman - will be built. Pipes from wells will feed into the facilities, each of which will be designed to handle 10 bcm/year. Gas from the facilities will feed into a desulfurization/final processing facility to prepare the gas for export. ¶3. (C) Hojamuhammedov said that Turkmen officials are in negotiations with Turkish, Chinese, and South Korean companies to construct these facilities and to work as service providers. They are also in negotiations with one of these companies to handle production in one 10 bcm area. The Chevron country manager suggested that his company provide coordination for the entire complex, an idea Hojamuhammedov reportedly found intriguing. Nevertheless, Hojamuhammedov said a PSA would not be possible. Looking for a possible way forward, the Chevron manager asked if there could be an agreement where payment would be based on the level of success. He said as long as the agreement was long-term, it could be doable for Chevron. He then offered to provide Hojamuhammedov a model agreement to have a better idea of what he meant. Hojamuhammedov said he would welcome the model agreement and would respond after reviewing it. ¶4. (C) COMMENT: One has to be creative to be successful in Turkmenistan. One thing Hojamuhammedov had asked Chevron in a meeting months ago was, "what can you do for us?" Hopefully, providing training is one answer to that question, and will serve as an incentive for the Turkmenistan government to find a mutually beneficial way for Chevron to work onshore. END COMMENT. CURRAN