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RR RUEHBI RUEHCI RUEHDBU RUEHLH RUEHNEH RUEHPW
DE RUEHAH #1025/01 2251239
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R 131239Z AUG 09
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 3288
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 5536
RUEHBJ/AMEMBASSY BEIJING 3256
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RUEATRS/DEPT OF TREASURY WASHDC
RHMFISS/USCENTCOM SPECIAL HANDLING MACDILL AFB FL
RUEHVEN/USMISSION USOSCE 3794
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RUEKJCS/SECDEF WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001025 
 
SIPDIS 
 
STATE FOR SCA/CEN; EEB 
ENERGY FOR EKIMOFF/THOMPSON 
COMMERCE FOR HUEPER 
 
E.O. 12958: DECL: 08/13/2019 
TAGS: EPET PGOV EINV PBTS AZ TX
SUBJECT: TNK-BP WAITING AND HOPING IN TURKMENISTAN 
 
REF: ASHGABAT 995 
 
Classified By: Charge Richard Miles, reasons 1.4 (b) and (d). 
 
¶1. (C) SUMMARY.  Russian-British co-owned TNK-BP remains one 
of a handful of foreign oil and gas companies attempting to 
break into the well-guarded Turkmen hydrocarbon sector with 
little success to date.  TNK-BP's Program Director for 
Turkmenistan Oleg Lonovenko attributed TNK-BP's current lack 
of success mainly to frequent turnover of ranking officials 
in the Turkmen Government, and the unwillingness of President 
Berdimuhamedov to meet with representatives of foreign 
companies.  Lonovenko stressed that despite little 
Turkmenistan Government movement toward a deal, TNK-BP would 
keep its Ashgabat office open indefinitely, noting that 
future business opportunities far outweighed the costs of 
maintaining an office.  Lonovenko did not feel that strained 
Turkmen-Russian relations over gas, nor the disputed 
territory in the Caspian between Turkmenistan and Azerbaijan, 
had negatively impacted TNK-BP's chances. Instead, he 
believed that Turkmenistan's standing policy toward all 
foreign companies was TNK-BP's biggest hurdle.  END SUMMARY. 
 
¶2. (C) On August 12, Economic Officer met with TNK-BP country 
representative for Turkmenistan Oleg Lonovenko to discuss 
TNK-BP's chances of eventually striking an offshore deal with 
the Turkmen.  TNK-BP is fifty percent owned by the Russian 
company TNK, while British Petroleum (BP) owns the other 
half.  When asked how both TNK-BP and BP could both be 
competing for contracts in Turkmenistan, Lonovenko explained 
that TNK-BP would of course use BP technology and equipment 
in the event that TNK-BP landed a deal, so BP is in a win/win 
situation by having TNK-BP in the country.  Lonovenko was 
eager to show off TNK-BP's large, fully staffed, modern 
office, stating that TNK-BP was committed to staying in 
Ashgabat for the long haul.  However, Lonovenko was also 
downbeat on TNK-BP's current prospects, stating that all of 
the foreign oil companies in Ashgabat he knew of had little 
to brag about. 
 
¶3. (C) Lonovenko attributed TNK-BP's inability to get a 
contract primarily to the frequent turnover of key officials 
at the State Agency for Management and Use of Hydrocarbon 
Resources.  He stated that since 2007, TNK-BP had been close 
to getting a business proposal for offshore exploration 
approved through the agency twice, and both times key 
officials were fired at the last minute, forcing TNK-BP to 
start all over with new officials.  He added that the new 
appointees were leery of meeting with foreign companies, and 
it took TNK-BP almost six months to get a meeting with the 
new Agency officials. 
 
¶4. (C) Lonovenko was also disappointed that TNK-BP has not 
been able to get the necessary support from President 
Berdimuhamedov.  He added that it had been nearly two years 
since his company met with the President.  When asked why 
TNK-BP was unable to meet with the president, Lonovenko 
opined that Berdimuhamedov purposely avoids meetings with 
foreign oil and gas companies mainly because the president 
believes he must provide a deliverable. 
 
¶5. (C) When asked about the impact on TNK-BP of strained 
relations between Russia and Turkmenistan over gas, Lonovenko 
stated there was no impact.  He asserted that all foreign 
companies receive basically the same attention in 
Turkmenistan -- little attention.  He described TNK-BP's 
chances of getting a deal in Turkmenistan, despite its 
Russian affiliation, as equal to those of other companies, 
adding that overall, TNK-BP enjoyed a good relationship with 
the GOTX, and the GOTX did not associate TNK-BP with Gazprom. 
 
¶6. (C) Lonovenko also did not believe that the disputed 
hydrocarbon fields in the Caspian between Turkmenistan and 
Azerbaijan would impact TNK-BP regardless of the outcome 
 
ASHGABAT 00001025  002 OF 002 
 
 
(reftel).  He estimated that there is enough gas and oil 
outside of the disputed area and onshore to make Turkmenistan 
extremely attractive to foreign companies. 
 
¶7. (C) COMMENT.  TNK-BP is one of only a handful of foreign 
oil and gas companies that has committed the resources to 
open and maintain an office in Ashgabat.  TNK-BP admitted 
that the Turkmen bureaucracy is extremely slow and tricky and 
that the President must personally give the green light to 
TNK-BP before any deals can be reached.  Since TNK-BP has not 
met with Berdimuhamedov in almost two years, TNK-BP does not 
know where it stands.  However, TNK-BP's strategy is simply 
to maintain an office in Ashgabat for as long as necessary, 
allowing the company to be ready on the ground if and when 
Turkmenistan becomes more willing to do business with foreign 
energy companies.  END COMMENT. 
MILES