VZCZCXRO9825
RR RUEHDBU
DE RUEHAH #0161 0331100
ZNY CCCCC ZZH
R 021100Z FEB 06
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 6949
INFO RUCNCIS/CIS COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 2502
RHEHNSC/NSC WASHDC
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEHBS/USEU BRUSSELS

C O N F I D E N T I A L ASHGABAT 000161 
 
SIPDIS 
 
SIPDIS 
 
SECSTATE FOR EUR DAS BRYZA, EUR/CACEN, SA DAS GASTRIGHT 
 
E.O. 12958: DECL: 02/01/2016 
TAGS: ECON EFIN ENRG EPET PGOV TX
SUBJECT: OIL EXPATS: GOTX OIL POLICY DYSFUNCTIONAL, BUT 
WE'LL HANG ON 
 
REF: ASHGABAT 144 
 
Classified By: AMBASSADOR TRACEY ANN JACOBSON FOR REASONS 1.4 (B),(D) 
 
¶1.   (SBU) A half-dozen of Ashgabat,s long-time oil-patch 
and other expat observers gave us their views on 
Turkmenistan,s oil/government scene over lunch January 27. 
The emphatic consensus was that GOTX channels for getting oil 
business done have become more dysfunctional than ever, with 
nil prospects for improvement.  All admitted their operations 
were feeling acutely squeezed.  Yet there was also apparent 
accord that, albeit the worsening climate will put off new 
Western oil ventures here, operations which are already 
rooted will stay, because pulling up stakes for them is not 
an option and fallow periods are a precondition for the big 
profits anyway. 
 
¶2.  (C) Maersk,s General Manager said he has &never seen a 
government try so hard8 to make foreign investors and 
companies unwelcome.  He spoke of the amount of time he has 
to spend with different government agencies just to enable 
his company to do the work it is here for.  All agreed that 
with the closure of the Competent Body and the removal of Oil 
and Gas Deputy Chairman Yolly Gurhanmuradov last year, there 
is now no GOTX mechanism or individual POC from whom 
companies can hope to get permissions or decisions.  Requests 
essential for operations and production go into &limbo.8 
 
¶3.  (SBU) The Merhav Rep said his company (in-country since 
1994) had not been paid for the entire last year.  Yet he was 
unfazed by this, characterizing one of his responsibilities 
as being to remind his company that such is the way of doing 
business in Turkmenistan.  The latter offers lucrative 
projects; one must accept and wait through the slow times to 
take advantage of the super-profitable opportunities when 
circumstances ripen, in his words.  Ebbs and flows in 
relations with the GOTX are par for the course.  There was 
general nodding.  Bertling's ethnic-Turkish Amcit Managing 
Director, as always, emphasized the potential for 
businesspeople who are patient and willing to do things 
according to local ways.   The oil and gas companies meet as 
a group to discuss their shared challenges:  a collective 
approach with the GOTX is imperative to being able to 
continue working in Turkmenistan. 
 
¶4.   (C) Niyazov/Putin:  Regarding strategic trends in the 
Central-Asian regional energy scene, all comments were deeply 
pessimistic.  The EU (Tacis) Rep didactically opined that 
Niyazov,s January 23 meeting with Putin had officially 
sealed the deal for Russia to get effectively all 
Turkmenistan,s natural-gas exports henceforth.  Others at 
the table demurred at the timing of this thesis, but none at 
its thrust.  All took it as a given that Niyazov is 
physically terrified of being cast into Moscow,s ultimate 
disfavor.  Someone argued that Niyazov,s old precondition of 
a billion-dollar fund for constructing a TCP was because he 
has real cause to fear that Moscow would cut off his gas 
exports were he to opt for a TCP:  without a reserve of cash 
to tide over GOTX social payments until the TCP was up and 
running, he would surely topple . 
 
¶5.  (SBU) We solicited observations on Niyazov,s brutal 
scale-back of pensions (Reftel).  All our guests believed he 
had taken the step because the GOTX budget is utterly empty. 
Agreeing that the pension measure's social impact was 
extraordinarily harsh, a couple suggested that it was an 
egregious case of incompetent and craven subordinates 
scrambling to carry out Niyazov,s order for a fiscal cutback 
without daring to alert him to the details and consequences. 
They suggested Niyazov might eventually reverse the cutbacks. 
 In any case, no-one foresaw any active social protest. 
JACOBSON