TURKMEN PRESIDENT IS MIGHTILY ANNOYED WITH

C O N F I D E N T I A L ASHGABAT 000495

SIPDIS

DEPARTMENT FOR SCA/CEN

E.O. 12958: DECL: 04/20/2019
TAGS: PREL PGOV EPET ENRG ECON MARR OVIP RS TX
SUBJECT: TURKMEN PRESIDENT IS MIGHTILY ANNOYED WITH
GAZPROM; DOES NOT AGREE TO INCREASED OVER FLIGHTS BUT
LEAVES AN OPENING FOR FURTHER DISCUSSION

REF: A. ASHGABAT 469 (NOTAL)

B. MOSCOW 971 (NOTAL)

Classified By: Charge Richard Miles, reasons 1.4(b) and (d).


1. (C) SUMMARY. In a wide-ranging and lengthy meeting with
Assistant Secretary Boucher on April 15, Turkmen President
Berdimuhamedov expressed his appreciation for U.S. efforts in
Afghanistan as well as his satisfaction with the
Administration's Policy Review on Afghanistan and Pakistan.
Berdimuhamedov was accompanied by Foreign Minister Meredov.
Boucher was accompanied by Charge Miles. Berdimuhamedov
twice mentioned "evil forces" gathering together in Pakistan.
Boucher informed President Berdimuhamedov on a confidential
basis that an agreement has been reached with the Kyrgyz
Government to continue operations at Manas. Berdimuhamedov
reiterated his government's willingness to help with the
Coalition effort in Afghanistan but balked at Boucher's
repeated request to lift the cap on U.S. over flights to and
from that country. He cited "technical issues" as the reason
for his refusal rather than the usual, rationale of harm to
Turkmenistan's policy of "positive neutrality" thus leaving a
window open for further bilateral talks on these "technical
issues."


2. (C) Berdimuhamedov was indignant over the recent gas
pipeline explosion, an attitude he later expanded to raise a
more general criticism of Russia and Gazprom's previous
tactics with regard to energy cooperation with Turkmenistan.
Russians were &monopolists8 he said indignantly. Perhaps
not coincidentally, Berdimuhamedov said that he favored
increased cooperation with American companies, mentioning his
willingness to meet with Chevron. Note: This meeting and
requests for similar meetings with executives of other
American energy companies have been on the agenda for a very
long time.


3. (C) Berdimuhamedov described the improvement in the
energy-related relationship with Azerbaijan and he expressed
his gratitude to the U.S. for encouraging this progress. END
SUMMARY.


4. (C) Boucher began with a general description of the new
approaches of President Obama's Administration, emphasizing
the importance of the Afghanistan-Pakistan Policy Review but
also mentioning the Administration's desire to develop a
dialogue with Iran. Berdimuhamedov praised President Obama's
initiative saying that absent the Administration's approach
to the problem of Afghanistan and Pakistan, it would be
impossible to change things in those countries. Turkmen
policy toward Afghanistan and Pakistan would not change,
Berdimuhamedov said, "Whether Karzai or a different person
comes to power."

OVER FLIGHT ISSUES. MANAS.


5. (C) Boucher raised the issue of the Turkmen annual cap
of 1,600 over flights for U.S. aircraft en route to and from
Afghanistan. At this time, Boucher told Berdimuhamedov ) on
a confidential basis ) that we had successfully worked out
arrangements with the Kyrgyz Government which would allow
continued use of the Manas facilities. Boucher mentioned the
resumption of the "Gas and Go" operation at Ashgabat airport
noting that these stops bring substantial revenue to the
airport and the Turkmen civil aviation authority. While we
could pay landing fees at the airport plus, of course, the
cost of the fuel itself, we could not pay the USD 30,000
presently demanded by the Turkmen aviation authorities for a
few over flights not covered by the terms of the agreement on
"humanitarian" over flights. We could also discuss the
possible provision of necessary technical equipment or
training. Boucher then raised the larger issue of the annual
over flight cap. Sixteen hundred planes are not enough, he
said. We are ramping up our operations in Afghanistan. We


have already virtually reached the 1,600 limit and we still
have over six months to go before we renew the annual
agreement. We need, Boucher emphasized, no limits or a
greatly increased number of flights to support our efforts to
bring stability to Afghanistan. Berdimuhamedov said that
this had been discussed with General Petraeus, you know our
policy, he said, "under the aegis of humanitarian aid" we
have never refused your requests ) but on technical issues
such as the annual limit on flights, I have to ask my
experts. We want to be supportive, Berdimuhamedov said; we
are never against emergency landing or refueling. We will
continue our policy confidentially, Berdimuhamedov concluded.

AFGHANISTAN-PAKISTAN


6. (C) Boucher summarized the Administration's approach to
Afghanistan and Pakistan. We have an integrated military and
civilian approach, he said, and we want to work together with
the countries in the region. We will put in the necessary
support elements ) troops, civilian assistance and
infrastructure ) and we will come up with the financial
resources to do what needs to be done. We connected the
power lines with Uzbekistan this spring, Boucher went on; we
would like to move the Turkmen-Afghanistan power project
forward, maybe by bringing it to the Regional Economic
Conference in Islamabad in May.


7. (C) Berdimuhamedov said, "in all honesty," we want to
help but we're not getting any benefit out of this proposed
project. Right now, he said, we provide electricity at a
"humanitarian rate" of two cents per kilowatt hour. But our
commercial cost is seven cents a kilowatt hour.

The Economic Cooperation Organization (ECO)


8. (C) Berdimuhamedov then changed the subject, complaining
that the Economic Cooperation Organization was being
transformed from an economic organization to a political one.
At the end of the last session, said Berdimuhamedov, we said
we were getting out of the group. We will remain only as an
observer.

Pakistan


9. (C) Berdimuhamedov returned to the subject of Pakistan.
"Many evil forces are collecting in Pakistan," he said. They
are against U.S. policy. The "evil powers" of the extremists
are growing. There is a question about the reliability and
the stability of the Pakistan authorities. At any rate,
Berdimuhamedov said, we will stay firm on our policy of
support of the U.S.

Iran


10. (C) The conversation turned briefly to Iran and Russia.
Boucher described President Obama's desire to try to work
with Iran. We understand, he said, that there are a lot of
problems with Iranian behavior but the President wants to
deal with Iran directly. We want to work with the Russians
on a variety of issues such as non-proliferation and new arms
control arrangements. Problems remain, Boucher said, such as
Georgia; but we are working together on Afghanistan.
Supplies are coming in through Russian territory. We want to
work with all the countries of the region based on their
independence, sovereignty and state of their development.

Russian and Gazprom Policies on Energy Matters


11. (C) Berdimuhamedov had actually begun his meeting with
Boucher by waxing indignant on the recent gas explosion on
the pipeline to Russia. At 1800 on April 7, said the
President, Gazprom informed us of the impending reduction of
pressure on the line. At 1100 on April 8, they did reduce
the pressure sharply and the result was an explosion on the


line. If the explosion had occurred at a compression
station, said the President, there would have been
considerable loss of life. Berdimuhamedov said we want to
confirm with international experts ) including
representatives of American companies ) what actually
happened and who is guilty here. "Whoever is guilty, is
guilty," he emphasized. In response to Boucher's statement
that this incident demonstrated the need for diversification,
Berdimuhamedov said that Turkmenistan was for
diversification. "We have an open door policy," he said.
(Comment: This is far from true, but still an interesting
comment from Berdimuhamedov. End comment.) "This is just a
diversion," said the President, "part of the gas war."


12. (C) Berdimuhamedov said that his recent visit to Moscow
was successful in general but unsuccessful on one important
issue. Originally, he said the Russians had proposed
constructing and financing the proposed East-West pipeline
(from eastern Turkmen fields to the Caspian) with a
no-interest loan. In Moscow, however, the offer of a
no-interest loan was withdrawn plus the Russians insisted
that the western end of the pipeline connect only to the
proposed Caspian Littoral Pipeline to Russia. "So we returned
to Ashgabat," said the President, "and announced an
international tender for the East-West Pipeline."

Doing Business with American Companies


13. (C) Berdimuhamedov enthusiastically said that
Turkmenistan was always open to American companies. He
described his meeting with Honeywell Chairman and CEO, Cote,
in positive terms. Berdimuhamedov said that Cote had
responded favorably to his suggestion for a project to
process methane. In a reversal of his previous position,
Berdimuhamedov agreed to meet two senior executives of the
Chevron Corporation (Vice Chairman Watson and VP of Business
Development, Pryor) who will be in Ashgabat next week for a
conference. We will work more with American and western
companies, he concluded. Asked about a meeting with
Conoco-Phillips CEO Mulva, Berdimuhamedov responded
uncharacteristically harshly, "I was very cautious," he said,
because of their partnership with Lukoil. Why were they
working with the Russians, he asked. The Charge explained
that they thought a partnership with Lukoil would enhance
their ability to do business in Turkmenistan. Berdimuhamedov
shrugged, as though to dismiss this idea out of hand. Let
the American companies start to work on our terms, he said )
meaning only service contracts on shore - then we can expand
their activities.

Azerbaijan


14. (C) Berdimuhamedov noted that a good deal of progress
had been achieved with Azerbaijan. We have solved ninety
percent of our problems he said. He expressed warm gratitude
for American support for this. Noting that Azeri President
Aliev was in a different situation than he was,
Berdimuhamedov said that, nonetheless, "we understand each
other." But, he went on, if Aliev allows internal discussion
of the Caspian demarcation issue, we will never solve it.
U.S. policy should continue to support close ties between
Azerbaijan and Turkmenistan. It would be good, he said, if
Aliev could support Turkmenistan,s portion on cross-Caspian
cooperation or have the Azeri representative to next week's
Pipeline Security Conference do so. In that context,
Berdimuhamedov specifically asked whether Deputy Assistant
Secretary Krol, who will lead the U.S. Delegation to the
Conference, could favorably refer to Azeri-Turkmen progress
in resolving outstanding issues.

Russia Again


15. (C) Boucher asked whether Russia was playing a bigger
game. Turkmenistan has pushed up the price which Russia pays


it for gas; was this pipeline explosion part of an effort to
push the price back down? This provoked a real outburst from
Berdimuhamedov. "They have robbed us for many years!" he
said with considerable vigor. They were buying our gas for
forty dollars and selling it for three hundred.
Berdimuhamedov said he had worked out what then President
Putin had described as a "good, objective" position ) not on
price, but on the formula of the price. We have a contract;
they must keep it, he said. But, he went on, they ) the
Russians ) have continued their pressure on us -- including
"kompromat ) derogatory material." "We are not afraid of
this!" he declaimed. "Our gas fields are adequate, we don't
need the Russians." Anyhow, he concluded, "We have had our
difficulties but we always surmounted them."


16. (C) Boucher said he would recommend that DAS Krol make
the statement Berdimuhamedov desired and that, meanwhile, the
U.S. would continue to develop its cooperative projects with
Turkmenistan in such diverse fields as education, agriculture
and the development of an open society. Berdimuhamedov said
he wants to develop the relationship, including through
high-level visits such as one by himself.


17. (C) In parting, Berdimuhamedov spoke highly of recently
retired Ambassador Mann and asked that his personal greetings
be extended to him. He welcomed Boucher's announcement of
Ambassador Morningstar's appointment and said he looked
forward to an early visit by him to Turkmenistan.


18. (C) Comment: This was certainly the most free wheeling
of the three substantive meetings which the Charge has
participated in with Berdimuhamedov and also the one most
free of cant. Whether this was brought about temporarily
because of Berdimuhamedov's very obvious annoyance with the
Russians and with Gazprom or whether it was a result of his
continued travels and meeting with other foreign leaders and
ranking business executives, is impossible to say. Still, it
was refreshing and allowed a more frank exchange of views
than usual. On the important issue of the over flight cap, a
subsequent meeting (septel) with Foreign Minister Meredov
indicated that the window for discussion was somewhat more
narrow than had been implied by Berdimuhamedov. DAS Krol's
timely visit to Ashgabat next week may shed more light on a
possible resolution of this issue. End comment.


19. (U) Assistant Secretary Boucher has cleared this
message.
MILES