TURKMENISTAN: BERDIMUHAMEDOV'S FIRST TRIP TO

UNCLAS ASHGABAT 001498

SENSITIVE
SIPDIS

STATE FOR SCA/CEN; EEB

E.O. 12958: N/A
TAGS: PGOV EINV EPET TX
SUBJECT: TURKMENISTAN: BERDIMUHAMEDOV'S FIRST TRIP TO
SOUTH KOREA OPENS DOOR TO GREATER COOPERATION


1. (SBU) SUMMARY: South Korea hosted the president of
Turkmenistan for a two-day visit that centered on developing
the economic relationship. The two countries explored
cooperation in a variety of areas, including energy
development and infrastructure modernization. A Korean
diplomat in Ashgabat offered the opinion that both sides are
pleased with the fast-developing relationship, and suggested
that a Korean presidential visit may be in the planning
stages for spring 2009. Turkmen officials will likely be
enthusiastic to have another player competing for a role in
the country's energy development, and may be hopeful that a
Korean national energy company, in particular, will soon
become another reliable partner. END SUMMARY.


2. (SBU) On November 6 and 7, President Berdimuhamedov made
his first official visit to South Korea. In a press
conference, the Turkmen leader said that his country will
support South Korea's efforts to acquire reliable energy
supplies and other resources. Korean officials, for their
part, indicated readiness to participate in the refurbishment
of Turkmenistan's infrastructure and facilities within its
oil and gas sector. The Turkmen president also traveled to
Ulsan and Pusan, toured a shipmaking complex, an auto
manufacturing plant, an oil refinery, and Pusan's modern port
facilities.


3. (SBU) POLOFF met November 17 with Korean First Secretary
Son Jin Hwa, who said that the bilateral relationship has
been developing at a fast pace, and both sides a re pleased.
A South Korean embassy opened in Turkmenistan just this year,
in January. Korean Prime Minister Han Seung-soo visited
Turkmenistan in May to initiate the discussion on energy
development cooperation, and the embassy is planning for a
"very senior Korean official" to visit Turkmenistan in Spring

2009. Son said that his government was thrilled to hear that
Berdimuhamedov's trip dominated Turkmen press for five days.


4. (SBU) Korean companies are interested in projects to
refurbish the oil refineries at Seidi and Turkmenbashy,
construction of desulfurization facilities near the South
Iolatan gas field, construction of a factory to manufacture
gas pipe, and refurbishment of several provincial airports.
South Korean energy companies have also expressed interest in
competing for the right to develop several oil and gas blocks
in the Caspian, including the Korean National Oil
Corporation. Son said that most of the Korean companies
interested in working in Turkmenistan were private, although
some national companies were weighing the costs and benefits
of investing in Turkmenistan as well.


5. (SBU) COMMENT: There has been no reporting thus far
regarding which specific Caspian Sea blocks interest the
Korean companies, but Turkmen officials are likely pleased to
have another country competing for a role in energy
development here. If a Korean national energy company is
interested, the government of Turkmenistan will certainly
prefer it as a potential energy development partner, since
national companies are more likely to work on projects that
earn little or no profit, and are able to come up with
capital for major projects more easily than private firms.
Private Korean companies competing for other energy and
infrastructure projects, however, will have to deal with the
same business challenges that other foreign companies are
faced with here. END COMMENT.
MILES