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