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RUCNMEM/EU MEMBER STATES COLLECTIVE
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UNCLAS SECTION 01 OF 02 ASHGABAT 000238 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN 
ENERGY FOR EKIMOFF/BURPOE/COHEN 
COMMERCE FOR EHOUSE/DSTARKS 
 
E.O. 12958: N/A 
TAGS: EPET PGOV EINV TX
SUBJECT: FMC PLANS TO EXPAND BUSINESS IN TURKMENISTAN 
 
ASHGABAT 00000238  001.2 OF 002 
 
 
¶1. (U) Sensitive but Unclassified. Not for Public 
Internet. 
 
¶2. (SBU) SUMMARY: FMC Technologies (FMC), a U.S.-based 
oil drilling equipment provider, has supplied 
equipment to Dragon Oil in Turkmenistan for seven 
years.  The company is now considering plans to 
establish an office here.  FMC is looking for 
additional opportunities to provide drilling equipment 
and services to national and international companies 
working in Turkmenistan.  An FMC representative 
believes the increasing need for deep high-pressure 
drilling in Turkmenistan will trigger the demand for 
FMC's state-of-the-art equipment.  END SUMMARY. 
 
¶3. (SBU) On February 23, poloff met with a regional 
sales manager from FMC Technologies to discuss FMC's 
desire to pursue additional service contracts and open 
an office in Turkmenistan.  According to the FMC 
official, within FMC's corporate structure, 
Turkmenistan falls under the jurisdiction of the 
company's subsidiary based in France, which has 
largely failed to pursue opportunities in the Turkmen 
market.  However, FMC's Asia Pacific-Middle East 
(APME) subsidiary, through its branch office in Dubai, 
has operated "under the radar" in Turkmenistan for the 
past seven years through its contract with Dragon Oil. 
The APME branch hopes to convince FMC headquarters in 
Houston to allow it to open an office in Turkmenistan 
in order to pursue opportunities with national and 
international companies in Turkmenistan. 
 
¶4. (SBU) According to the FMC rep, he is pushing his 
headquarters to register an office in Turkmenistan. 
He recognizes that establishing an in-country presence 
would be crucial for expanding its business in the 
country.  Moreover, Dragon Oil is a major FMC customer 
with 78 wells currently in operation.  The FMC rep 
said a client the size of Dragon would have typically 
required FMC to maintain a permanent in-country 
presence to supply and service its wells.  FMC is 
concerned that there may come a time when its 
personnel may not be able to obtain Turkmen visas in 
time to perform its obligations under the 
Dragon Oil contract.  Opening a local office would 
help to avoid this.  In consulting with numerous 
sources, the FMC rep was told that it could take 
anywhere from 2-12 months to register his company in 
Turkmenistan. 
 
¶5. (SBU) FMC supplies and services various drilling 
equipment, including well heads and trees, whose 
service life is typically 15-20 years.  While FMC is 
not a low-cost provider, the FMC rep pointed out that, 
in the area of advanced drilling equipment, "you get 
what you pay for."  FMC believes there will be 
high demand for its advanced equipment as more and 
more deep, high-pressure wells are drilled in 
Turkmenistan to tap new gas deposits.  According to 
the FMC official, less expensive drilling equipment, 
provided mostly by Chinese and Russian companies, will 
not hold up to the demands of deep high-pressure 
drilling. 
 
¶6. (SBU) FMC hopes to capitalize on its existing 
relationships with several IOCs, in the event they 
obtain onshore or offshore contracts.  The rep 
mentioned close ties with UAE-based Petrofac that 
recently signed an agreement with Turkmengas to 
 
ASHGABAT 00000238  002.2 OF 002 
 
 
develop part of the South Yoloten field.  He also 
noted that CNPC has bought FMC drilling through the 
company's Singapore office.  Although CNPC did not 
disclose the ultimate destination of the equipment, 
the rep thought it was likely that at least some 
of the FMC equipment was being used by CNPC in 
Turkmenistan.  FMC also expects opportunities to 
work with Turkmen national oil and gas companies 
as a service and equipment provider.  FMC sees 
tremendous potential for its services at the South 
Yoloten field.  Petrofac officials in Dubai told 
the FMC rep that Petrofac plans to drill about 
100 wells during its phase of South Yoloten 
development, with the ultimate total in South 
Yoloten reaching 200 wells.  Such high numbers 
of technically challenging wells could generate 
significant demand for FMC's products and services. 
 
¶7. (SBU) COMMENT: FMC's greatest opportunity in 
Turkmenistan will likely come through expanding its 
business with foreign companies that operate here.  As 
for working with Turkmenistan's national companies, 
FMC will have to come up with a special marketing 
strategy that educates host-country officials about 
the advantages of its high cost, state-of-the-art 
equipment and services.  FMC will also need to adjust 
to local business practices and be responsive to the 
needs of state-controlled companies in order to 
achieve the success that some of its competitors have 
already seen.  END COMMENT. 
 
CURRAN