TURKMENISTAN: EXXONMOBIL INCHING FORWARD

C O N F I D E N T I A L ASHGABAT 000740 SIPDIS STATE FOR SCA/CEN, EEB PLEASE PASS TO USTDA DAN STEIN USEU FOR SPECIAL ENVOY GRAY ENERGY FOR EKIMOFF/THOMPSON COMMERCE FOR HUEPER E.O. 12958: DECL: 06/09/2018 TAGS: PREL PGOV EPET TX SUBJECT: TURKMENISTAN: EXXONMOBIL INCHING FORWARD Classified By: CDA RICHARD E. HOAGLAND: 1.4(B),(D). ¶1. (C) ExxonMobil's Caspian Manager Rob YOung (please protect) told the Charge June 6 that his company is still hoping to get a contract to work in Turkmenistan's onshore gas fields, but has not yet submitted a bid. ExxonMobil wants to get a better sense of what the Government of Turkmenistan wants, and will tailor its bid to meet those requirements. "If they want us to call ourselves a contractor, we'll do it," he said, though ExxonMobil needs to be able to book proven reserves as a basis for any contract. ExxonMobil understands the need to reassure the government about its intentions, and so the company is pushing for a meeting for its Executive Vice President of Exploration with President Berdimuhamedov. It also is planning a series of technical workshops to allow Turkmenistan's hydrocarbon experts to see the depth of ExxonMobil's technical expertise. Once the company sees whether there is a basis for business, it will establish a small office with two expatriate personnel. ¶2. (C) According to Young, ExxonMobil sees a niche for itself in Turkmenistan's energy sector. Reminding the Charge that ExxonMobil is the largest privately owned producer of electricity in the world, he said that his company wants to package its services as an extraction-to-power producer. ExxonMobil would simply propose to expand the electrical production facilities that it would need to power its facilities to include electricity for Turkmenistan's people. ExxonMobil is also hoping to bring to the bargaining table its technology for reinjecting H2S to maintain the well's pressure, rather than dumping tons of sulphur on the surface, as has been done in Kazakhstan. ¶3. (C) COMMENT: ExxonMobil's slow, deliberate pace of engagement with Turkmenistan's authorities is a gamble. It is behind Chevron, which also wants to work onshore, and other players like Marathon (septel) are coming on stage. Turkmen officials are slow, cautious, and inexperienced dealing with Western energy majors, fearing they'll be taken advantage of. But we are encouraged they continue to climb their learning curve. Positive decisions won't come overnight, but we are confident they will, indeed, come. END COMMENT. HOAGLAND