TURKMENISTAN: SOME TURKISH VIEWS ON TURKMENISTAN

C O N F I D E N T I A L ASHGABAT 000210 SIPDIS SIPDIS STATE FOR SCA/CEN, EEB STATE PLEASE PASS TO USTDA DAN STEIN ENERGY FOR HUEPER/THOMPSON COMMERCE FOR HEUPER E.O. 12958: DECL: 02/08/2018 TAGS: PGOV PREL ECON EPET TU AJ TX SUBJECT: TURKMENISTAN: SOME TURKISH VIEWS ON TURKMENISTAN AND CASPIAN ENERGY ISSUES REF: A. ASHGABAT 0170 ¶B. ASHGABAT 0173 Classified By: CDA RICHARD E. HOAGLAND: 1.4 (B),(D) ¶1. (C) On February 1, Turkish Ambassador Hakki Akil met with the Charge to discuss regional energy issues (reftels). He said it is important to explain to Turkmenistan that allowing major Western companies to work in the Caspian and onshore would promote the country's economic and political independence. Big companies are able to lobby in the West on behalf of issues here. In addition, these companies will bring new technology and know-how. Akil said Turkmenistan needs another major export route for its gas so that it can bargain for better prices. However, he said, if there is no economic incentive for the big companies, they will have no interest. Akil said he had heard from Western oil companies that Turkmenistan possesses huge reserves. While there may not be as much as 33 trillion cubic meters of natural gas as Turkmenistan asserts, there is indeed a lot. Akil doubted the Turkmen will allow major Western companies to work on the right bank of the Amu Darya River, because of the agreement with the Chinese. ¶2. (C) Regarding Turkey's role in resolving delimitation issues between Turkmenistan and Azerbaijan, Akil said the Turkmen do not ask directly for Ankara's help dealing with Baku, but the Turks try to be helpful when they can. For example, the Turkish Prime Minister asked Ilham Aliyev to accompany him on the Turk's plane to former President Niyazov's funeral. He did this because Turkey believes that regional cooperation, especially between Turkmenistan and Azerbaijan, is important. Turkey always shares that message with both sides, and the Turkmen have thanked them for that. ¶3. (C) Akil said the Government of Turkmenistan had asked British Petroleum (BP) to work with Azerbaijan to find a solution to the Osman-Osmar and Serdar oil-fields dispute in the Caspian. He said the Turkmen need BP because they want the oil companies to carry their water with the Azeris. The best solution would be to let the consortium working in the area also work in the integrated area. CHINA, RUSSIA, AND GAS ¶4. (C) Turkmenistan will have problems fulfilling its commitments to Russia, China, and Iran, Akil said. Turkmenistan will start supplying gas to China in 2009 at the same time it will increase what it sends to Russia. He believed Gazprom had reached the point of no return regarding the Prikaspiskyy (Caspian littoral) Pipeline, because Putin had invested a lot in it politically. He did not believe Russia would help fund the Prikaspiskyy Pipeline without a guarantee of gas supplies. About China, Akil said Turkmenistan has to reimburse the Chinese if they are forced to buy gas from another source because Turkmenistan is unable to meet its commitment. Therefore, the deal provides China with a secure supply. ¶5. (C) COMMENT: Most of Akil's comments reflect common wisdom here in Turkmenistan. Turkey would benefit greatly if Turkmenistan agrees to allow construction of a Trans-Caspian Pipeline and the major Western hydrocarbon companies to work onshore, both of which would help promote increased gas production and construction of the Nabucco pipeline, netting Turkey some hefty transit fees. Given Turkey's reputation in Ashgabat for self-promotion, however, it is probably well that Turkey so far has limited its assistance to indirect measures. END COMMENT. HOAGLAND