Identifier
Created
Classification
Origin
08ASHGABAT333
2008-03-12 11:29:00
CONFIDENTIAL
Embassy Ashgabat
Cable title:  

TURKMENISTAN: BHP BILLITON CONSIDERS ENTERING

Tags:  PGOV EPET TX 
pdf how-to read a cable
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C O N F I D E N T I A L ASHGABAT 000333 

SIPDIS

SIPDIS

STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HUEPER

E.O. 12958: DECL: 03/12/2018
TAGS: PGOV EPET TX
SUBJECT: TURKMENISTAN: BHP BILLITON CONSIDERS ENTERING
OIL AND GAS SECTOR, BUT NEEDS MORE HOMEWORK


Classified By: CDA Richard E. Hoagland: 1.4(B),(D).

C O N F I D E N T I A L ASHGABAT 000333

SIPDIS

SIPDIS

STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HUEPER

E.O. 12958: DECL: 03/12/2018
TAGS: PGOV EPET TX
SUBJECT: TURKMENISTAN: BHP BILLITON CONSIDERS ENTERING
OIL AND GAS SECTOR, BUT NEEDS MORE HOMEWORK


Classified By: CDA Richard E. Hoagland: 1.4(B),(D).


1. (C) BHP Billiton Petroleum, a Houston-based petroleum
company that identifies itself as one of the largest
producers in the Gulf of Mexico, is looking at bidding on one
of Turkmenistan's Caspian Sea blocks, according to Commercial
Director Larry Killion during a March 7 meeting with the
Charge. The company, which currently works in Australia,
Malaysia, the North Sea, Pakistan, and Algeria, has earmarked
about $750 million for petroleum exploration, and is seeking
to identify new opportunities that would allow it to increase
its production to 170 million barrels per day. It sees in
Turkmenistan a location offering both potential resources and
potential accessibility.


2. (C) BHP Billiton is looking at the offshore blocks in the
Caspian because its expertise is in deep-water oil
production. It has identified possibly productive fields in
blocks 4-5, blocks 21-22, block III (the Serdar field),and
block 18. Although it understands that most of these blocks
are already "taken" or being bid for by other companies, BHP
Billiton is still exploring possibilities for working these
fields jointly with other companies. (NOTE:
ConocoPhillips/Lukoil is seeking PSAs for blocks 19, 20 and
21, Buried Hill reportedly has an agreement to work block
III, and Rosneft reportedly is interested in block 18. END
NOTE.) Although Killion came to Turkmenistan prepared to
explore the possibilities of signing a technical evaluation
agreement, he had second thoughts when he heard that
Turkmenistan requires companies to sign production sharing
agreements (PSAs) before it will allow technical evaluation
to take place. BHP Billiton is now reconsidering its options.


3. (C) COMMENT: For all the Chevrons and ConocoPhillips
that are seeking to enter Turkmenistan's production sector,
there remain those who, like BHP Billiton, seem unprepared to
use their visits to maximum effect. As Killion noted, his
company is starting the process late, and is at a
disadvantage in getting an agreement on any of the
"preferred" Caspian Sea blocks, unless Turkmenistan decides
to abandon any of its on-going PSA negotiations. Post is
using Department of Commerce BFIF funds to send an officer to
meet with interested representatives of U.S. companies
attending the Atyrau (Kazakhstan) Oil and Gas Conference in
hopes of helping these companies better target their trips.
END COMMENT.
HOAGLAND