Identifier
Created
Classification
Origin
08ASHGABAT422
2008-04-03 12:46:00
CONFIDENTIAL
Embassy Ashgabat
Cable title:
TURKMENISTAN: TNK-BP'S NEGOTIATIONS MOVING SLOWLY
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C O N F I D E N T I A L ASHGABAT 000422
SIPDIS
SIPDIS
STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
COMMERCE FOR HUEPER
ENERGY FOR EKIMOFF/THOMPSON
E.O. 12958: DECL: 04/03/2018
TAGS: PREL EPET EINV TX
SUBJECT: TURKMENISTAN: TNK-BP'S NEGOTIATIONS 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 000422
SIPDIS
SIPDIS
STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
COMMERCE FOR HUEPER
ENERGY FOR EKIMOFF/THOMPSON
E.O. 12958: DECL: 04/03/2018
TAGS: PREL EPET EINV TX
SUBJECT: TURKMENISTAN: TNK-BP'S NEGOTIATIONS MOVING SLOWLY
Classified By: CDA Richard E. Hoagland: 1.4(B),(D).
1. (C) During an April 2 meeting with Charge, TNK-BP Vice
President for International Affairs Shawn McCormick (former
U.S. National Security Council staffer) and Country Manager
Oleg Lonovenko reported their company set up its office in
Ashgabat in September 2007, separate from the office that BP
is only now beginning to set up. TNK-BP is negotiating
production sharing agreements (PSAs) to work several offshore
Caspian blocks. When asked which blocks TNK-BP was
particularly interested in, McCormick demurred, stating only
that they want to bid on several blocks in which several
other companies also are interested. (NOTE: This likely
means that TNK-BP is bidding for blocks 19, 20 and 21 -- for
which Lukoil/ConocoPhillips have been negotiating -- and/or
blocks 22 and 23. END NOTE.) McCormick enthusiastically
stated that his company likes competition, because TNK-BP can
bring advantages to the table that trump what others can
deliver.
2. (C) According to McCormick, TNK-BP eventually wants to
work onshore, but -- like other foreign companies -- has been
told by the authorities that Turkmenistan is not ready to
approve any onshore PSAs. For now, TNK-BP is prepared to
take that statement at face value, and instead, is working on
demonstrating to the government that it can deliver. The
company has submitted an offer to assist Turkmenistan with
oil recovery in old fields, and has carried out 3-D seismic
imaging of the (onshore) Kotur Tepe field, south of the
Cheleken Peninsula. According to TNK-BP's data, there is
still a good deal of oil left in the field, and there could
be good results if a company were to use modern technology.
The company has taken Turkmenistan officials to one of its
fields in western Siberia, where TNK-BP could discuss its
(mostly U.S.) high-tech approach in Russian -- something that
led to a good dynamic, according to McCormick.
3. (C) During his briefing, Lonovenko off-handedly commented
that TNK-BP would be investing in Turkmenistan's free tourist
zone, Avaza, on the Caspian coast, but has not yet decided
what form its investment will take. Charge asked him what he
really thinks about Avaza. Lonovenko paused, blushed, and
then said, "The only difference between adults and children
is the cost of their toys."
4. (C) COMMENT: Although TNK-BP is far ahead of most of the
other large oil companies in establishing an office here, it
seems to be lagging in concluding any PSA negotiations.
Increasingly, we are hearing from foreign businessmen already
working in Turkmenistan that the Turkmen government is not
eager to allow Russian hydrocarbon companies a foothold in
Turkmenistan. No matter how much McCormick emphasized the
company's links to the United States, most here in
Turkmenistan consider TNK-BP to be primarily a Russian,
rather than a U.S., entity. END COMMENT.
HOAGLAND
SIPDIS
SIPDIS
STATE FOR SCA/CEN, EEB
PLEASE PASS TO USTDA DAN STEIN
COMMERCE FOR HUEPER
ENERGY FOR EKIMOFF/THOMPSON
E.O. 12958: DECL: 04/03/2018
TAGS: PREL EPET EINV TX
SUBJECT: TURKMENISTAN: TNK-BP'S NEGOTIATIONS MOVING SLOWLY
Classified By: CDA Richard E. Hoagland: 1.4(B),(D).
1. (C) During an April 2 meeting with Charge, TNK-BP Vice
President for International Affairs Shawn McCormick (former
U.S. National Security Council staffer) and Country Manager
Oleg Lonovenko reported their company set up its office in
Ashgabat in September 2007, separate from the office that BP
is only now beginning to set up. TNK-BP is negotiating
production sharing agreements (PSAs) to work several offshore
Caspian blocks. When asked which blocks TNK-BP was
particularly interested in, McCormick demurred, stating only
that they want to bid on several blocks in which several
other companies also are interested. (NOTE: This likely
means that TNK-BP is bidding for blocks 19, 20 and 21 -- for
which Lukoil/ConocoPhillips have been negotiating -- and/or
blocks 22 and 23. END NOTE.) McCormick enthusiastically
stated that his company likes competition, because TNK-BP can
bring advantages to the table that trump what others can
deliver.
2. (C) According to McCormick, TNK-BP eventually wants to
work onshore, but -- like other foreign companies -- has been
told by the authorities that Turkmenistan is not ready to
approve any onshore PSAs. For now, TNK-BP is prepared to
take that statement at face value, and instead, is working on
demonstrating to the government that it can deliver. The
company has submitted an offer to assist Turkmenistan with
oil recovery in old fields, and has carried out 3-D seismic
imaging of the (onshore) Kotur Tepe field, south of the
Cheleken Peninsula. According to TNK-BP's data, there is
still a good deal of oil left in the field, and there could
be good results if a company were to use modern technology.
The company has taken Turkmenistan officials to one of its
fields in western Siberia, where TNK-BP could discuss its
(mostly U.S.) high-tech approach in Russian -- something that
led to a good dynamic, according to McCormick.
3. (C) During his briefing, Lonovenko off-handedly commented
that TNK-BP would be investing in Turkmenistan's free tourist
zone, Avaza, on the Caspian coast, but has not yet decided
what form its investment will take. Charge asked him what he
really thinks about Avaza. Lonovenko paused, blushed, and
then said, "The only difference between adults and children
is the cost of their toys."
4. (C) COMMENT: Although TNK-BP is far ahead of most of the
other large oil companies in establishing an office here, it
seems to be lagging in concluding any PSA negotiations.
Increasingly, we are hearing from foreign businessmen already
working in Turkmenistan that the Turkmen government is not
eager to allow Russian hydrocarbon companies a foothold in
Turkmenistan. No matter how much McCormick emphasized the
company's links to the United States, most here in
Turkmenistan consider TNK-BP to be primarily a Russian,
rather than a U.S., entity. END COMMENT.
HOAGLAND