Identifier
Created
Classification
Origin
08ASHGABAT405
2008-04-01 08:08:00
CONFIDENTIAL
Embassy Ashgabat
Cable title:
TURKMENISTAN: EXXONMOBIL MOVING SLOWLY
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C O N F I D E N T I A L ASHGABAT 000405
SIPDIS
SIPDIS
STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HUEPER
E.O. 12958: DECL: 03/31/2018
TAGS: PREL EPET EINV TX
SUBJECT: TURKMENISTAN: EXXONMOBIL MOVING SLOWLY
Classified By: CDA RICHARD E. HOAGLAND: 1.4 (B),(D)
C O N F I D E N T I A L ASHGABAT 000405
SIPDIS
SIPDIS
STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HUEPER
E.O. 12958: DECL: 03/31/2018
TAGS: PREL EPET EINV TX
SUBJECT: TURKMENISTAN: EXXONMOBIL MOVING SLOWLY
Classified By: CDA RICHARD E. HOAGLAND: 1.4 (B),(D)
1. (C) On March 28, ExxonMobil Caspian Area Manager Robert
Young told the Charge that ExxonMobil is "struggling" to see
whether there are any big, tough, challenging hydrocarbon
production projects -- the type of project ExxonMobil does
best -- in Turkmenistan. Things are going slowly, because
there is not a good match-up between Turkmenistan's and
ExxonMobil's organizational structures. In addition,
ExxonMobil believes that Turkmenistan does not fully
appreciate the fact that ExxonMobil is different from most of
the mid-sized companies with which the country is currently
dealing.
2. (C) Young indicated that ExxonMobil is looking at
possibly doing work onshore. Offshore, there is little
prospect of big operations because there is too much sand and
not enough seals and structures. Onshore, the Murgab
depression, located in southeastern Turkmenistan, is
"interesting" -- there is a potential for big projects, sour
gas, and difficult situations. Even though Minister of Oil
and Gas Hojamuhammedov told gas conference participants March
28 that "at the moment" Turkmenistan is only considering
allowing foreign companies to work onshore in a service
capacity, ExxonMobil is prepared to go slowly to rebuild the
trust that it has been warned was lost when it withdrew from
Turkmenistan in the 1990's. (NOTE: Prior to 2002, Mobil had
an agreement to explore the right bank of the Amu Darya River
(where China National Petroleum Corporation now has a
production sharing agreement),and was considering the
feasibility of producing gas for a proposed pipeline to
China. After its merger with Exxon -- which had fields of
its own in southwestern Turkmenistan south of Nebitdag (now
Balkanabat),it opted to pull out, reportedly because a hole
that Mobil had drilled was dry. Its departure reportedly
left some in Turkmenistan, including the oil professional
like Deputy Premier Tagiyev and Turkmengaz Chairman Kakayev,
displeased. END NOTE.)
3. (C) COMMENT: ExxonMobil may face a steep uphill battle
to land a contract for the Murgab basin. Chevron, too, is
interested in working the same general area, and submitted a
full-fledged bid March 11. With ExxonMobil far behind its
competitor, its go-slow approach may hurt it, unless Chevron
decides to withdraw its bid because the Government of
Turkmenistan continues to reject the idea of offering a major
oil company a contract to work onshore. END COMMENT.
HOAGLAND
SIPDIS
SIPDIS
STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HUEPER
E.O. 12958: DECL: 03/31/2018
TAGS: PREL EPET EINV TX
SUBJECT: TURKMENISTAN: EXXONMOBIL MOVING SLOWLY
Classified By: CDA RICHARD E. HOAGLAND: 1.4 (B),(D)
1. (C) On March 28, ExxonMobil Caspian Area Manager Robert
Young told the Charge that ExxonMobil is "struggling" to see
whether there are any big, tough, challenging hydrocarbon
production projects -- the type of project ExxonMobil does
best -- in Turkmenistan. Things are going slowly, because
there is not a good match-up between Turkmenistan's and
ExxonMobil's organizational structures. In addition,
ExxonMobil believes that Turkmenistan does not fully
appreciate the fact that ExxonMobil is different from most of
the mid-sized companies with which the country is currently
dealing.
2. (C) Young indicated that ExxonMobil is looking at
possibly doing work onshore. Offshore, there is little
prospect of big operations because there is too much sand and
not enough seals and structures. Onshore, the Murgab
depression, located in southeastern Turkmenistan, is
"interesting" -- there is a potential for big projects, sour
gas, and difficult situations. Even though Minister of Oil
and Gas Hojamuhammedov told gas conference participants March
28 that "at the moment" Turkmenistan is only considering
allowing foreign companies to work onshore in a service
capacity, ExxonMobil is prepared to go slowly to rebuild the
trust that it has been warned was lost when it withdrew from
Turkmenistan in the 1990's. (NOTE: Prior to 2002, Mobil had
an agreement to explore the right bank of the Amu Darya River
(where China National Petroleum Corporation now has a
production sharing agreement),and was considering the
feasibility of producing gas for a proposed pipeline to
China. After its merger with Exxon -- which had fields of
its own in southwestern Turkmenistan south of Nebitdag (now
Balkanabat),it opted to pull out, reportedly because a hole
that Mobil had drilled was dry. Its departure reportedly
left some in Turkmenistan, including the oil professional
like Deputy Premier Tagiyev and Turkmengaz Chairman Kakayev,
displeased. END NOTE.)
3. (C) COMMENT: ExxonMobil may face a steep uphill battle
to land a contract for the Murgab basin. Chevron, too, is
interested in working the same general area, and submitted a
full-fledged bid March 11. With ExxonMobil far behind its
competitor, its go-slow approach may hurt it, unless Chevron
decides to withdraw its bid because the Government of
Turkmenistan continues to reject the idea of offering a major
oil company a contract to work onshore. END COMMENT.
HOAGLAND