Turkmenistan’s Hydrocarbon Agency: “Help!”

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¶1. (U) Sensitive but unclassified. Not for public Internet.

¶2. (SBU) SUMMARY: In a remarkable meeting with EEB
Assistant Secretary Sullivan, Turkmenistan’s top energy
negotiator, who is close to Berdimuhamedov, made crystal
clear he is feeling overwhelmed by his responsibility and
lack of institutional capacity. Turkmenistan’s policy is
clear: it wants Western companies and wants to export to the
West. But it needs help. Septel will make recommendations.
END SUMMARY

¶3. (SBU) EEB Assistant Secretary Daniel Sullivan told State
Agency for Hydrocarbon Resources Executive Director
Bayrammyrat Myradov on August 14 that diversification of
energy flows supports Turkmenistan’s neutrality policy. The
United States has a strong interest to invest not only in the
Caspian but also on-shore. We bring world-class experience,
technology, and training. Upstream investment opportunities
lead to investment in pipelines.

OVERWHELMED

¶4. (SBU) Myradov responded, “Very interesting presentation,”
and then — to make his point — tried to recruit the embassy
POL/ECON FSN who was translating. He said, “You’re young,
bright, and have international experience. Come join my
team.” Myradov made clear his point was that his agency, as
well as other parts of the government, is floundering under
the onslaught of governments and businesses flocking to
Ashgabat because of President Berdimuhamedov’s new openness.

¶5. (SBU) Clearly cranked up, Myradov did not hide his
frustration. He asked Sullivan, “Do you want a short answer
or a long answer to your points? The short answer is I agree
with everything you said. That’s what we should be doing.
My longer answer: where are your concrete proposals? What
are the next steps? We really want to diversify our energy
exports. You (the United States) have the capability to
provide world-class technology, training, and management. We
don’t have it, and we want it.”

¶6. (SBU) Calming down, Myradov said, “We’re starting (new
cooperation with the West) in the Caspian because those
fields are technologically complex. But as I told Ambassador
Mann (reftel), we are open to any, I emphasize any, on-shore
proposal. But let’s start with the Caspian, and that will
lead to more. Those companies that succeed off-shore will be
able to succeed on-shore.”

CASPIAN DELIMITATION

¶7. (SBU) Sullivan noted we want to help create the
conditions for private-sector development. Also, our offer
of technical assistance for Caspian Sea delimitation remains
on the table.

¶8. (SBU) The mention of delimitation set Myradov off again.
“What are we supposed to do, talk for another 15 years? What
technical assistance do you mean? Tell me concretely. I’ve
recently spoken to four different international lawyers on
this issue, and each told me something different. Speaking
as a citizen, not a bureaucrat, Turkmenistan and Azerbaijan
could probably sit down and solve this, but not so long as
British Petroleum continues to operate in the disputed area.
Let the consortium suspend activity until we get this solved.”

“WE NEED YOUR HELP”

¶9. (SBU) Sullivan raised the issue of finding ways to
transport Turkmenistan’s hydrocarbon resources across the
Caspian. He asked Myradov about Turkmenistan’s timelines for
concluding new Caspian and on-shore deals.

ASHGABAT 00000865 002 OF 002

¶10. (SBU) Myradov replied Turkmenistan is already
negotiating with several Western companies for Caspian PSA
deals. “We want to speed up the negotiations. It’s
important for serious, big companies to start working in the
Caspian.”

¶11. (SBU) Then his frustration rose again. “But a quick
decision can’t mean a wrong decision. Economics is our first
priority. But these companies are negotiating from a very
pessimistic viewpoint, as if oil is still $10-15 a barrel.
To help them minimize their risk, why should we maximize our
risk? We seriously tell these companies we want to work to
international standards, but at the same time we don’t want
to be taken advantage of.” Looking at Sullivan, Myradov said
bluntly, “We are waiting for you to train our staff how to
negotiate to international standards. Right now, we are
enormously transparent and tell these companies exactly what
terms we want. In return, we want them to be open and honest
with us. We need your help.” Sullivan noted that these kind
of negotiations with large American energy companies can seem
difficult because they drive hard bargains, but that Myradov
should not lose sight of the longer term benefits that
American firms will bring, such as world class technology and
management training for Turkmen citizens, and access to
significant capital for economic development.

¶12. (SBU) Myradov thanked Sullivan for listening patiently
and carefully to his views. He added, “All companies are
taking us more seriously now because we are talking to
Western companies.”

¶13. (SBU) COMMENT: This was a valuable meeting, remarkable
for its frankness. Myradov, who is close to Berdimuhamedov,
is feeling overwhelmed by his responsibility and lack of
institutional capacity. Turkmenistan’s policy is clear: it
wants Western companies, and wants to export to the West.
But it needs help, and it needs it soonest. Septel will make
recommendations. END COMMENT.

¶14. (U) A/S Sullivan has cleared this cable.
HOAGLAND