Cablegate: Turkmenistan: U.S. Energy Company Shows Savvy In

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DE RUEHAH #0244/01 0561112
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FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 4292
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RUEHVEN/USMISSION USOSCE 4432
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RHMCSUU/CDR USCENTCOM MACDILL AFB FL//CCJ2/HSE/CCJ5//

UNCLAS SECTION 01 OF 02 ASHGABAT 000244

SENSITIVE
SIPDIS

STATE FOR SCA/CEN, EEB
ENERGY FOR EKIMOFF/BURPOE/COHEN

E.O. 12958: N/A
TAGS: BTIO ENIV ENRG EPET PGOV TX
SUBJECT: TURKMENISTAN: U.S. ENERGY COMPANY SHOWS SAVVY IN
PURSUING AN OIL DEAL

REF: ASHGABAT 207

ASHGABAT 00000244 001.2 OF 002

1. (U) Sensitive but Unclassified. Not for public Internet.

2. (SBU) SUMMARY: Executives of recently-formed,
Houston-based TX Oil, whose directors include a son of the
41st U.S. President, met with Turkmen government officials,
including President Berdimuhamedov, on February 24-25. The
purpose of the meetings was to explore and advocate for
possible business opportunities in Turkmenistan's oil sector.
The company's directors were pleased with the tone of their
high-level meetings. Still, the meetings were exploratory
for both sides and the executives acknowledge the prospects
for cooperation remain uncertain. END SUMMARY

BACKGROUND

3. (SBU) One TX Oil director has considerable in-country
experience, having previously worked closely with
Schlumberger and Bridas in Turkmenistan. TX Oil is interested
in pursuing three different options in Turkmenistan:

i) An oil and gas deal on Turkmenistan's Caspian coast,
emulating the onshore Production Sharing Agreement (PSA)
Mobil once held;
ii) An oil intensification deal that would bring TX Oil's
technology and services to existing oil wells in order to
improve production; company representatives claim this type
of project could easily double Turkmenistan's oil production;
and
iii) A possible partnership with Buried Hill to develop the
Serdar field in the disputed region of the Caspian (reftel).

MEETING WITH THE PRESIDENT

4. (SBU) TX Oil directors, including a son of the 41st U.S.
President, met with President Berdimuhamedov and several
other Turkmen officials who deal with energy during their
brief February 24-25 trip to Ashgabat. The purpose of the
meetings was to explore and advocate for possible business
opportunities in Turkmenistan's oil sector. They immediately
recognized the emphasis on form over substance in
Turkmenistan and were both surprised and impressed at the
rapid pace of construction in the capital. TX Oil directors
hope to first build a more personal relationship with Turkmen
officials in hopes it will lead to some of the proposed
projects mentioned above.

5. (SBU) According to the TX Oil directors, Berdimuhamedov
had an impressive knowledge of the oil and gas sector in
Turkmenistan. They commented that the President discussed
specific projects and issues at a level of detail that even
surprised Deputy Chairman for Oil and Gas Baymyrat
Hojamuhammedov. The TX Oil officials were surprised by the
amount of deference Hojamuhammedov showed to Berdimuhamedov
during the meeting, constantly standing up when addressed and
straightening his suit jacket. The presidential meeting was
featured on the front page of "Neutral Turkmenistan"
newspaper on the following morning (February 25).

6. (SBU) COMMENT: While TX Oil might be a newcomer in the
oil business, its directors showed considerable savvy in
their approach to doing business in Turkmenistan. Arranging
a meeting with Berdimuhamedov has been well-nigh impossible
for the major Western energy companies. Bringing somone
with close ties to the U.S. political elite was also
well-aimed to get Berdimuhamedov's attention. Finally the
"wildcatter" aura of TX Oil is without a doubt far less
intimidating to the Turkmen that the massive projects

ASHGABAT 00000244 002.2 OF 002

proposed by the Western majors. If TX Oil is able to
convince the Turkmen of the benefits of its technology, it
might turn a positive introduction into a profitable business
venture. END COMMENT
CURRAN

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