TURKMENISTAN: CHEVRON REP DISCUSSES MEETING WITH

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001159 SIPDIS STATE FOR SCA/CEN; EEB; NEA/IR ENERGY FOR EKIMOFF/BURPOE/COHEN COMMERCE FOR EHOUSE E.O. 12958: DECL: 09/11/2019 TAGS: EPET PGOV EINV ECON TX SUBJECT: TURKMENISTAN: CHEVRON REP DISCUSSES MEETING WITH DEPUTY OIL AND GAS CHAIRMAN REF: ASHGABAT 0815 Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d). ¶1. (C) SUMMARY: The Chevron Representative in Ashgabat met with the Charge on September 11 to update her on Chevron's recent meeting with Turkmen Deputy Chairman for Oil and Gas Baymyrat Hojamuhammedov. The Chevron rep reiterated Chevron's plans to pursue a partnership with Turkmen state energy companies to develop the Minara, South Yolotan, and Osman deposits. He described Hojamuhammedov's views on Russia, China, Caspian delimitation issues, and Turkmen business prospects for U.S. oil and gas companies, as well as Hojamuhammedov's "gatekeeper" role in keeping foreign companies off the President's radar. Chevron reported that it had a confirmed meeting with the Turkmen President on the margins of the United Nations General Assembly (UNGA) this month in New York. In addition, the Chevron rep repeated his request to have Chevron mentioned by name in any high-level meetings between the Turkmen President and USG officials scheduled to take place at UNGA. END SUMMARY. ¶2. (C) The Chevron Representative in Ashgabat met with the Charge on September 11 to update her on Chevron's recent meeting with Turkmen Deputy Chairman for Oil and Gas Baymyrat Hojamuhammedov. The Chevron rep told the Charge that Chevron is pushing its proposal to develop onshore gas deposits in the Minara, South Yolotan, and Osman fields, and that Deputy Chairman for Oil and Gas Baymyrat Hojamuhammedov had recently agreed to meet with Chevron to discuss the proposal. He also identified Head of the State Agency for Management and Use of Hydrocarbon Resources Yagshygeldi Kakayev -- like Hojamuhammedov -- as a "gatekeeper," who has not yet advocated on behalf of Chevron to the Turkmen President. ¶3. (C) The Chevron rep reported that Hojamuhammedov tried to seem indifferent when asked if Turkmenistan and Russia would reach a new gas agreement this month. Hojamuhammedov asserted that Turkmenistan has other customers besides Russia now--Iran and China, and Turkmenistan was not going to push a deal with Russia unless it was beneficial to the Turkmen. The Chevron rep also recounted that a company employee in Moscow had reported that Russia was very interested in striking a new gas deal and would sweeten the pot with promises to fund the Caspian Littoral Pipeline in return for a significant portion of future upstream opportunities. He opined that Russia was working hard to regain influence it might have lost over Turkmenistan because of the ongoing gas dispute. ¶3. (C) With regard to China, the Chevron rep recounted that Hojamuhammedov did not find Turkmenistan's business relationship with China National Petroleum Corporation (CNPC) a positive one. Hojamuhammedov said, "We will work with the Chinese for now, and then get rid of them later." Hojamuhammedov also said that the Turkmen had grown tired of the "China INC." model of business, in which the Chinese brought their goods, services, and manpower with them instead of using Turkmen material and human resources. Although the Chinese agreed to build the Central Asia-China gas pipeline to strike a deal with the Turkmen, Hojamuhammedov expressed "buyer's remorse," toward the deal with CNPC, the Chevron rep added (reftel). ¶4. (C) According to the Chevron rep, Hojamuhammedov said that Turkmen President Gurbanguly Berdimuhamedov and Azerbaijani President Ilham Aliyev get along very well and could easily resolve the Caspian delimitation dispute. However, in order to renegotiate the maritime boundary, Aliyev would have to amend the Azerbaijani constitution. Hojamuhammedov was ASHGABAT 00001159 002 OF 002 certain that Aliyev would not be willing to amend the Azerbaijani constitution as Aliyev's father and former Azerbaijani President Heydar Aliyev reportedly claimed that any future Azerbaijani president who tried to amend the constitution would be a "traitor" and an "idiot." The Chevron rep said Hojamuhammedov thought international arbitration might be the only viable solution for the Azerbaijanis and that the GOTX was busy preparing its case should both countries decide on arbitration. ¶5. (C) Moreover, the Chevron rep said that Hojamuhammedov considers himself to be "the oil and gas gatekeeper to the President," and that all potential hydrocarbon deals must have his blessing before the President even learns about them. The Chevron rep said that Hojamuhammedov appeared very confident about his role during the meeting and the Deputy Chairman asserted that "The President does not know the difference between a service contract, a risk service agreement, and a production sharing agreement, and that is the way I would like to keep it; if the President needs to know anything about oil and gas, I will tell him." The Chevron rep did tell the Charge that Hojamuhammedov still receives inquiries from President Berdimuhamedov as to why Turkmenistan does not have a deal with a large U.S. energy company. The Chevron rep stated that if Hojamuhammedov is ready to do business, then Berdimuhamedov will most likely follow suit. ¶6. (C) COMMENT: Chevron continues to work tirelessly against Turkmen intransigence in an attempt to get a lucrative onshore deal. If Deputy Chairman Hojamuhammedov was shooting straight with the Chevron rep, then it appears that Hojamuhammedov would have to develop a willingness to do business with U.S. companies before any proposals will reach the President for consideration. In addition, Hojamuhammedov's reported indifference to Russia, and newly-disclosed dislike for doing business with the Chinese, no doubt reflect the ongoing dispute with Russia and Turkmen uneasiness over the Chinese way of doing business. END COMMENT. CURRAN