TURKMENISTAN: U/S JEFFERY'S APRIL 21 VISIT

C O N F I D E N T I A L SECTION 01 OF 03 ASHGABAT 000511

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

E.O. 12958: DECL: 04/22/2018
TAGS: PGOV PREL ECON EPET EAID TX
SUBJECT: TURKMENISTAN: U/S JEFFERY'S APRIL 21 VISIT

Classified By: CDA RICHARD E. HOAGLAND: 1.4 (B),(D)


1. (C) SUMMARY: Under Secretary for Economic, Energy, and
Agricultural Affairs and Coordinator for International Energy
Affairs Reuben Jeffery visited Ashgabat on April 21. The
overall tone of the visit was decidedly positive, even though
several of the meetings were head-bangingly Soviet. Although
several of these senior officials seemed relatively clueless,
the daily reality is certainly not grim. By building trust
through working relationships, we are finding more and more
officials just below the most senior level eager for real
cooperation and new-think. If we persist with patience (and
occasionally, a sense of humor),we will help achieve
Berdimuhamedov's goal of changing the mentality of the
country, which will be in our long-term interest. END
SUMMARY.

PRESIDENT BERDIMUHAMEDOV


2. (C) During a frank, open, and cordial meeting that lasted
1.5 hours on April 21, President Berdimuhamedov told Under
Secretary Jeffery he greatly values Turkmenistan's

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relationship with the United States and wants it to continue
to grow. "We have a lot more work to do together, he said."
He expressed pleasure with his brief meeting with President
Bush during the recent NATO Summit in Bucharest. He
emphasized, "We want real and reliable partners."


3. (C) Berdimuhamedov discussed his economic reform
initiatives and development priorities. He said he's well
aware of rumors that Turkmenistan is under Russia's umbrella,
but he emphasized, "We make our own decisions." Asserting
that Turkmenistan is now an independent country, he recalled
it was ruled by the USSR for 70 years, "when they took
everything from us -- our natural gas, our cotton, even our
fruits and vegetables. I recall as a boy working in the
summer to load boxes of apples onto the backs of trucks that
would take them off to Moscow." Returning to relations with
the United States, he said he wants good relations for the
long term. "You can help us change the mentality of the
country. It's the young generation that will make the real
difference. They need their views broadened."


4. (C) Berdimuhamedov made a pitch for the United States to
back his "pipeline security initiative" in the United
Nations, and briefly discussed various pipelines on the
drawing boards. The Under Secretary strongly advocated for a
role for major U.S. corporations like Chevron and
ConocoPhillips to help Turkmenistan meet its development
goals, not the least through training and education.
Berdimuhamedov said he wants companies like those working
with Turkmenistan in the Caspian, but not yet onshore. He
said, "Our national experts will do it themselves onshore,
although we might ask for some help through service
contracts. We do not want another Bridas experience. We
could consider Chevron onshore in the future, but we don't
need them now. It's more urgent to get gas flowing in the
Caspian." (NOTE: Natural gas issues discussed more fully
septel. END NOTE.)

THE TAGIYEV AND MURADOV SHOW


5. (C) In a first, the Turkmen schedulers had Deputy Prime
Minister for Oil and Gas Tachberdi Tagiyev and State
Hydrocarbon Agency Director Bayrammurat Muradov meet Under
Secretary Jeffery together, with the explanation that with

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multiple delegations in Ashgabat on the same day this was the

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only way for Jeffery to meet with both Tagiyev and Muradov.
As the higher-ranked official, Tagiyev totally dominated the
meeting, while Muradov looked alternately glum and annoyed.


6. (C) Tagiyev reverted to his vintage monosyllabic self
revealing almost nothing of interest. In a classic exchange,
Jeffery asked, "What challenges do you see for the
hydrocarbon sector in the future?" Tagiyev answered, "None."
Much of the rest of the time, when he said more than one
word at a time, he reverted to Soviet-style recitation of
unreliable and unconfirmed statistics. When Jeffery tried to
elicit Tagiyev's views on the possibility of a
Turkmenistan-Azerbaijan Caspian Sea production pipeline to
get Turkmenistan's gas flowing directly to the West, Tagiyev
smirked and asked, "Where's the pipeline? We're only
interested up to our border."


7. (C) Under Secretary Jeffery noted that U.S. corporations
like Chevron and ConocoPhillips can provide great technical
expertise and excellent training opportunities. Tagiyev
said, "We ourselves will produce onshore, although they can
apply for service contracts." He couldn't help noting once
again that "ExxonMobil ran away" in 1998. Jeffery noted that
the expertise and transparency of Western majors could lead
to excellent investment results for Turkmenistan. Tagiyev
replied that Turkmenistan has adequate capital for domestic
development. He recalled that not so long ago, Turkmenistan
was selling its natural gas to Russia for $18/tcm. By this
July, the price will reach $150/tcm, and by next year it will
be $300-350/tcm. Close to smirking he said, "We'll have
plenty of investment money." (COMMENT: It would seem that
Gazprom's newly proffered "world prices" have hardened the
position of dinosaurs like Tagiyev. END COMMENT.)

DEPUTY PRIME MINISTER FOR ECONOMY AND FINANCE


8. (C) Under Secretary Jeffery's meeting with newly
appointed Deputy Prime Minister for Economy and Finance
Hojamurat Geldimuradov was an hour of Soviet-style recitation
of statistics, projects, and plans. He was well-briefed, but
he seemed nervous and uncomfortable meeting with a senior
Western official. When Geldimuradov noted Turkmenistan's
longstanding relations with major U.S. companies like Boeing,
General Electric, John Deer, and Case New Holland, Jeffery
urged Turkmenistan to give serious consideration to Case New
Holland's current offer to supply agricultural equipment for
the next harvest.


9. (C) Geldimuradov recommended that the 2008 TIFA be held
in Ashgabat, apparently unaware that the decision has already
been made that Dushanbe will host. Throughout the meeting,
MFA Americas Director Serdar Bashimov, who was notetaker for
the Turkman side, looked more than a little bemused.

DEPUTY PRIME MINISTER/FOREIGN MINISTER MEREDOV


10. (C) In the final meeting of the day, Jeffery met with
Deputy Prime Minister/Foreign Minister Meredov. Meredov made
a point of noting approvingly that Jeffery had arranged his
itinerary to visit Ashgabat before Baku, and then Meredov
reprised the president's points from the morning meeting. In
response to his views on the status and future of the
U.S.-Turkmenistan relationship, Meredov recited from memory
and in considerable detail, and with evident approval,
current areas of cooperation. He expressed deep gratitude
for the work of the U.S. Embassy to develop the new bilateral
relationship, which he said he sees getting "better and

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better." He predicted the relationship would "accelerate
into new areas of cooperation." (COMMENT: Considering
Meredov's recent distance and testiness, this meeting was
most welcome. He was relaxed and, for him, unusually
cordial. END COMMENT.)


11. (C) COMMENT: Visits like Under Secretary Jeffery's are
essential for trust building and because they give us insight
to current top-level thinking. While some of this reported
above might sound grim, the daily reality is not at all grim.
By building trust through day-to-day working relationships,
we are finding more and more clued-in officials just below
the top level eager for real cooperation. If we persist with
patience and an occasional sense of humor, we will help
achieve Berdimuhamedov's goal of changing the mentality of
the country. END COMMENT.


12. (U) Under Secretary Jeffery has cleared this cable.
CURRAN