TURKMENISTAN'S GAS CONFERENCE AND EXHIBITION FAILS TO

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SUBJECT: TURKMENISTAN'S GAS CONFERENCE AND EXHIBITION FAILS TO
ATTRACT MAJOR INTEREST



1. (U) Sensitive but unclassified. Not for public Internet.


2. (SBU) SUMMARY: Acting on President Berdimuhamedov's instruction
to have more exhibitions, Turkmenistani state petroleum agencies
decided to hold three separate events in 2008 -- on gas, on oil, and
one comprehensive exhibition and conference. The first of these
events -- the "Exploration and Development of Turkmenistan's Gas
Fields and Mineral Resources International Conference and
Exhibition" -- was March 27-29. According to Turkmenistani media
sources, the exhibition and conference brought over 50 foreign
companies. However, the event's organization, scale, and content
paled beside last year's Turkmenistan International Oil and Gas
Exhibition (TIOGE). END SUMMARY.

THE ORGANIZERS


3. (SBU) The first of three separate oil and gas exhibitions in
2008, the "Exploration and Development of Turkmenistan's Gas Fields
and Mineral Resources International Conference and Exhibition," was
held March 27-29. (The other two exhibitions will be a
comprehensive one that includes a conference, and one specifically
dedicated to oil issues.) The conference and exhibition were
organized by Turkmengaz, Turkmenneftegazstroy, Turkmengeologiya, the
Chamber of Commerce and Industry of Turkmenistan and Russian
Petroleum Investor (RPI). RPI had been Turkmenistan's petroleum
events organizer until last year, when the UK's ITE was awarded the
contract. Many participants shared a view that the choice of the
organizer was not successful. The event itself was poorly
advertised, and invitations went out only a few weeks in advance. A
number of companies, including major oil firms, could not
participate since they did not have adequate advance notice. (NOTE:
A representative of ExxonMobil told the Charge that it normally
takes at least six months to import trade show booths. END NOTE.)

THE PARTICIPANTS


4. (SBU) The exhibition hall was visibly less full than during the
2007 Turkmenistan International Oil and Gas Exhibition (TIOGE),
occupying only one floor. (The Exhibition Hall's ground floor only
had a non-trade automobile exhibit.) Due to the short notice, only
Turkmenistan's traditional partners -- Mitro, Burren, Dragon,
Wintershall/Maersk, CNPC and its subsidiaries, Gazprom, and Itera --
had displays. Russian companies -- mostly in the construction
machinery sector -- had a strong presence. Petronas, which
currently is undergoing an internal audit due to the departure of
its former country manager, did not participate. Of the majors,
only France's TOTAL exhibited -- and only paired with the French
construction company, Bouygues, which is active in Turkmenistan.
ExxonMobil and Shell had pamphlet exhibits next to the conference
hall a level above the regular exhibition area. U.S. exhibitors
included Zeppelin/Caterpillar and Western Geco, both of which
maintain a presence in Turkmenistan.


5. (SBU) Conference attendance was little better and was largely
Russian in nature. By the afternoon of March 28th, the few western
representatives attending the event had largely chosen to pursue
other activities, leaving the conference hall so empty that the
organizers decided to bus in students to help fill seats.

GOVERNMENT SPEAKERS


6. (SBU) The conference sessions did little to inspire interest.
While the topics were potentially interesting -- -- there were
presentations on geological and geophysical exploration, reservoir
modeling, exploration drilling, advanced technology and equipment
for deep drilling and production -- most presenters, particularly
those from companies hoping to do business in Turkmenistan, sought
to play their cards very close to their vests. Their presentations

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were very general and promotional in nature, and many concentrated
solely on the value to Turkmenistan of their companies'
technologies. No presentations provided overviews of companies'
current operations or future plans.


7. (SBU) The speeches by the Minister of Oil and Gas and Mineral
Resources, Baymurad Hojamuhammedov, and Executive Director of the
State Agency for the Management and Use of Hydrocarbon Resources,
Byrammurad Muradov, were the most anticipated and heavily attended.
Executive Director Muradov gave an overview of the investment
framework and export opportunities in Turkmenistan, echoing
President Berdimuhamedov's statement last May that the Trans-Caspian
pipeline is "still not off the agenda." He also reiterated
Turkmenistan's desire to adopt a UN resolution on energy pipeline
security, and indicated that the PSA mechanism will remain the main
vehicle for developing the country's Caspian oil and gas resources.
Without referring specifically to the Caspian offshore blocks, he
specifically said that he does not see any adequate alternatives to
the PSA arrangement in cooperating with large international
companies in long-term, high-cost oil and gas projects.


8. (SBU) Minister Hojamuhammedov said Turkmenistan "for now" is only
interested in having foreign companies work onshore under service
contracts, suggesting that in the future Turkmenistan might consider
onshore agreements that go beyond service contracts. The Minister
explained that the onshore PSA with the China National Petroleum
Corporation (CNPC) was awarded in 2007 in connection with the gas
pipeline to China. The Bagtiyarlik license territory, he said, was
identified as the source of gas supply for the pipeline.


9. (SBU) Minister Hojamuhammedov repeated his Government's estimates
of petroleum resources - 45 billion tons of oil equivalent,
including 27 billion tons onshore and 18 billion tons offshore.
Neither he nor any other speaker indicated whether the audit of the
Yoloten-Osman group of fields has begun.


10. (SBU) COMMENT: After the very successful TIOGE 2007, the gas
conference came off as a disappointing second-rate event. This was
evident from both the scope of participants and the content.
Companies not present in the country used the event as an
opportunity to visit and have additional discussions with the
Government. Those already operating in Turkmenistan saw little
value in participating. The Government of Turkmenistan continues to
use international fora to illustrate that its policies are
successful and supported by the international community. Yet,
because of the way the conference was structured and the abysmal
organization, this event did little to burnish Turkmenistan's
prestige as a new Central Asian hydrocarbon center. END COMMENT.


HOAGLAND