Identifier
Created
Classification
Origin
09ASHGABAT1622
2009-12-17 03:53:00
CONFIDENTIAL
Embassy Ashgabat
Cable title:
TURKMENISTAN: EXXONMOBIL SETTING UP SHOP IN
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C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001622
SIPDIS
STATE FOR SCA/CEN; EEB;
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR DSTARKS/EHOUSE
E.O. 12958: DECL: 12/16/2019
TAGS: EPET ECON PGOV EINV BTIO TX
SUBJECT: TURKMENISTAN: EXXONMOBIL SETTING UP SHOP IN
ASHGABAT
REF: ASHGABAT 1495
Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d).
C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001622
SIPDIS
STATE FOR SCA/CEN; EEB;
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR DSTARKS/EHOUSE
E.O. 12958: DECL: 12/16/2019
TAGS: EPET ECON PGOV EINV BTIO TX
SUBJECT: TURKMENISTAN: EXXONMOBIL SETTING UP SHOP IN
ASHGABAT
REF: ASHGABAT 1495
Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d).
1. (C) On December 15, EconOff met with ExxonMobil
representatives tasked with opening an office in Ashgabat.
Company reps expressed frustration with finding available
office space in the Turkmen capital, adding that they did not
find anyone who seemed "excited to rent." They asserted that
they had opened many offices across the world, but the
perceived indifference by Turkmen landlords took them aback.
They added that they had the impression that potential
landlords seemed to be "holding out" for bigger opportunities
down the road, but company reps were not sure what landlords
were waiting for.
According to ExxonMobil reps, they were told that given the
shortage of office space in the capital, foreign companies
generally do not negotiate on price. At the same time, U.S.
businesses which already have offices in Ashgabat have
indicated that agreeing on the rental price is generally the
main sticking point, stressing that Turkmen landlords are
aware that demand for good office space is high and supply is
low, resulting in fairly high rent for foreign companies.
2. (C) ExxonMobil was recently registered by the GOTX as an
official foreign company with permission to conduct business
in Turkmenistan, since selling its interest in a production
sharing agreement to the British Burren Energy in 2000. Over
the last year, ExxonMobil executives renewed their interest
in Turkmenistan, particularly in the area of developing the
country's vast natural gas deposits. Company officials felt
that opening an office was the next logical step in
rebuilding commercial relations with the Turkmen (reftel).
(NOTE: Although ExxonMobil reps have told us that the GOTX
will not hold ExxonMobil's 2000 decision to leave the country
against them, GOTX officials still raise the issue in
meetings with company reps. END NOTE.)
GOTX REQUIREMENTS FOR OPENING AN OFFICE
3. (C) Once ExxonMobil finds suitable office space, it still
will have several governmental requirements that all
companies must meet before officially opening the office.
First, the company must submit an application to establish a
representative office, signed by the head of the office. The
company must include its intended line(s) of business in
Turkmenistan and information about the company with an
overview of the company's business activities. The head of
the office must also provide a written and signed decision to
open an office along with the application. Next, the office
head must submit two signed copies of the office charter in
Turkmen and Russian.
4. (C) The office head must also submit a personal
information form and provide a 3X4 cm photo, as well as a
copy of his/her passport. A duly certified power of attorney
for the head of the representative office must be registered
with the government. Finally, a copy of the company's
Turkmen license to operate, an original copy of the company's
official Turkmen registration, and an official financial
status report must be legalized by a Turkmen consulate or
embassy overseas, or by the Ministry of Foreign Affairs in
Ashgabat. Failure to provide any of the above documentation
will delay or could prevent the office from being approved.
Local contacts involved in real estate businesses in Ashgabat
have told us that the many bureaucratic requirements for
opening offices exist primarily to create opportunities for
graft.
5. (C) COMMENT. The ExxonMobil reps noted that just
ASHGABAT 00001622 002 OF 002
registering the company took nearly a year, and they were
concerned that opening an office could take several months or
more. In 2009, the World Bank ranked Turkmenistan near the
bottom of its Ease of Doing Business list (137 out of 145
countries) -- a fact borne out by the experiences of
ExxonMobil and other U.S. companies attempting to open
offices in Ashgabat. END COMMENT.
CURRAN
SIPDIS
STATE FOR SCA/CEN; EEB;
ENERGY FOR EKIMOFF/BURPOE/COHEN
COMMERCE FOR DSTARKS/EHOUSE
E.O. 12958: DECL: 12/16/2019
TAGS: EPET ECON PGOV EINV BTIO TX
SUBJECT: TURKMENISTAN: EXXONMOBIL SETTING UP SHOP IN
ASHGABAT
REF: ASHGABAT 1495
Classified By: Charge Sylvia Reed Curran for reasons 1.4 (b) and (d).
1. (C) On December 15, EconOff met with ExxonMobil
representatives tasked with opening an office in Ashgabat.
Company reps expressed frustration with finding available
office space in the Turkmen capital, adding that they did not
find anyone who seemed "excited to rent." They asserted that
they had opened many offices across the world, but the
perceived indifference by Turkmen landlords took them aback.
They added that they had the impression that potential
landlords seemed to be "holding out" for bigger opportunities
down the road, but company reps were not sure what landlords
were waiting for.
According to ExxonMobil reps, they were told that given the
shortage of office space in the capital, foreign companies
generally do not negotiate on price. At the same time, U.S.
businesses which already have offices in Ashgabat have
indicated that agreeing on the rental price is generally the
main sticking point, stressing that Turkmen landlords are
aware that demand for good office space is high and supply is
low, resulting in fairly high rent for foreign companies.
2. (C) ExxonMobil was recently registered by the GOTX as an
official foreign company with permission to conduct business
in Turkmenistan, since selling its interest in a production
sharing agreement to the British Burren Energy in 2000. Over
the last year, ExxonMobil executives renewed their interest
in Turkmenistan, particularly in the area of developing the
country's vast natural gas deposits. Company officials felt
that opening an office was the next logical step in
rebuilding commercial relations with the Turkmen (reftel).
(NOTE: Although ExxonMobil reps have told us that the GOTX
will not hold ExxonMobil's 2000 decision to leave the country
against them, GOTX officials still raise the issue in
meetings with company reps. END NOTE.)
GOTX REQUIREMENTS FOR OPENING AN OFFICE
3. (C) Once ExxonMobil finds suitable office space, it still
will have several governmental requirements that all
companies must meet before officially opening the office.
First, the company must submit an application to establish a
representative office, signed by the head of the office. The
company must include its intended line(s) of business in
Turkmenistan and information about the company with an
overview of the company's business activities. The head of
the office must also provide a written and signed decision to
open an office along with the application. Next, the office
head must submit two signed copies of the office charter in
Turkmen and Russian.
4. (C) The office head must also submit a personal
information form and provide a 3X4 cm photo, as well as a
copy of his/her passport. A duly certified power of attorney
for the head of the representative office must be registered
with the government. Finally, a copy of the company's
Turkmen license to operate, an original copy of the company's
official Turkmen registration, and an official financial
status report must be legalized by a Turkmen consulate or
embassy overseas, or by the Ministry of Foreign Affairs in
Ashgabat. Failure to provide any of the above documentation
will delay or could prevent the office from being approved.
Local contacts involved in real estate businesses in Ashgabat
have told us that the many bureaucratic requirements for
opening offices exist primarily to create opportunities for
graft.
5. (C) COMMENT. The ExxonMobil reps noted that just
ASHGABAT 00001622 002 OF 002
registering the company took nearly a year, and they were
concerned that opening an office could take several months or
more. In 2009, the World Bank ranked Turkmenistan near the
bottom of its Ease of Doing Business list (137 out of 145
countries) -- a fact borne out by the experiences of
ExxonMobil and other U.S. companies attempting to open
offices in Ashgabat. END COMMENT.
CURRAN