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C O N F I D E N T I A L SECTION 01 OF 04 ASHGABAT 001258 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, EEBN 
PLEASE PASS TO USTDA DAN STEIN 
ENERGY FOR EKIMOFF/THOMPSON 
 
E.O. 12958: DECL: 11/21/2017 
TAGS: PGOV PREL PINR EPET EINV RS TK AJ KZ TX
SUBJECT:  TURKMENISTAN'S PRESIDENT BERDIMUHAMEDOV AND SCA 
PDAS MANN:  ENERGY ISSUES (11/16/07) 
 
Classified By: CHARGE RICHARD E. HOAGLAND FOR REASONS 1/4 (B), (D) 
 
¶1.  (U) U.S. PARTICIPANTS: 
 
SCA PDAS Steven Mann 
Charge d,affaires Richard Hoagland 
 
TURKMENISTAN PARTICIPANTS: 
 
President Gurbanguly Berdimuhamedov 
Deputy Prime Minister/Foreign Minister Rashit Meredov 
 
¶2.  (C) SUMMARY:  During a nearly 90-minute meeting on 
November 16 with SCA PDAS Steven Mann, President 
Berdimuhamedov 
 
-- suggested Turkmenistan can go it alone with Azerbaijan on 
the question of Caspian Sea delimitation; 
 
-- claimed he, in contrast to Azerbaijan President Aliyev, 
had stood up to Russian President Putin at the recent Caspian 
Sea Summit in Tehran; 
 
-- affirmed his support for a Trans-Caspian Pipeline and 
agreed to consider sending "early gas" westwards; 
 
--  said previously proposed U.S. energy consultations should 
take place in Turkmenistan; 
 
-- agreed that Turkmenistan Ambassador to the U.S. Orazov 
should take the lead to organize an investment delegation; 
 
-- reiterated his desire to develop Turkmenistan,s 
petrochemical industry; and 
 
-- agreed further work is needed to create comfortable 
business conditions for international investors. 
 
This meeting was important for advancing U.S. views directly 
and unfiltered with President Berdimuhamedov.  Although he 
might not change policies overnight, we believe he takes U.S. 
views into consideration when they are delivered by a senior 
official from Washington.  We were struck by Foreign Minister 
Meredov,s assertion that Azerbaijan "does not want a 
Trans-Caspian Pipeline."  We,d suggest this is all the more 
reason for Presidents Aliyev and Berdimuhamedov to 
communicate directly face to face.  END SUMMARY. 
 
¶3.  (SBU) PDAS Mann congratulated President Berdimuhamedov on 
the success of the Turkmenistan International Oil and Gas 
Exhibition (TIOGE-2007), saying it was the best TIOGE in 
memory, a potential turning point for Turkmenistan, and "a 
world-class event." 
 
¶4.  (C) In turn, Berdimuhamedov thanked Mann for the careful 
U.S. preparation and organization for his September trip to 
New York in conjunction with the UN General Assembly.  He 
said he had had an excellent impression of America -- "quite 
frankly, a much better impression" than he gained from his 
November 5-7 visit to Brussels -- "the difference between 
heaven and earth.  Europe doesn,t understand us as well as 
you do."  The President laughed, "One official in Brussels 
even asked me,  So, how,s Tajikistan?,  He recovered, but 
by then the train had left the station." 
 
¶5.  (SBU) Berdimuhamedov flagged his intent to take on 
internal reform, and pointed to eliminating the dual exchange 
rate.  Agricultural reform is next on his list but this is 
 
ASHGABAT 00001258  002 OF 004 
 
 
the most complicated.  But in any case, reform in general is 
"trickling" forward.  "Your interest and support pleases me." 
 
 
ENERGY CONSULTATIONS 
 
¶6.  (C) Mann noted that Berdimuhamedov in New York had 
proposed U.S.-Turkmenistan experts, meetings on legal and 
financial aspects of hydrocarbon development.  Mann said 
Washington is ready to move forward and would appreciate the 
President,s view when and where this should occur. 
Berdimuhamedov responded it would be best in Turkmenistan -- 
either in Ashgabat or Turkmenbashy.  He suggested Mann follow 
up details with Deputy Prime Minister for Gas and Oil 
Tachberdy Tagiyev. 
 
INVESTMENT DELEGATION 
 
¶7.  (C) Mann noted Berdimuhamedov while in New York had 
proposed a U.S.-Turkmenistan business council and a U.S. 
investment delegation to Turkmenistan for various sectors. 
Mann said the U.S. side is ready to follow up and would like 
to work on this with Turkmenistan Ambassador to the U.S. 
Orazov.  Berdimuhamedov concurred, noting that Turkmenistan 
is creating a new agency to support such efforts. 
 
PETROCHEMICAL AND AGRICULTURAL INDUSTRIES 
 
¶8.  (C) Mann said the United States is aware of 
Berdimuhamedov,s desire to develop Turkmenistan,s 
petrochemical industry.  He said the U.S. Trade and 
Development Agency could look at the possibility of a study. 
Berdimuhamedov responded he really wants more refined 
products for Turkmenistan to sell on the world market from 
its hydrocarbon resources.  He said he is concerned 
Turkmenistan is wasting much too much natural gas through 
flare-offs, and added Turkmenistan,s recent interest in 
acquiring solar energy technology.  Mann also referred to 
earlier international studies for value-added production in 
the agricultural sector.  Berdimuhamedov was receptive to new 
ideas, commenting, "But I want to make sure we are dealing 
with quality companies." 
 
TURKMENISTAN-AZERBAIJAN RELATIONS 
 
¶9.  (C) Mann told the President he wished to brief him on his 
recent meeting with Azerbaijan Foreign Minister Elmar 
Mammadyarov.  Mann reported Mammadyarov had noted Azerbaijan 
had good contacts and a decent atmosphere with Turkmenistan 
on the question of bilateral Caspian Sea delimitation.  Mann 
said Mammadyarov had proposed a short declaration between the 
two nations, centered on two points:  support for the 
median-line concept of delimitation and agreement to have a 
group of experts clarify the median line.  Mann added 
Mammadyarov had also proposed a summit in the nearest future 
of Presidents Aliyev (Azerbaijan), Nazarbayev (Kazakhstan), 
and Berdimuhamedov to bless the median-line principle, with 
expert-level follow up.  Mann noted the United States would 
be willing to support this and agreed with Mammadyarov that 
the United States could help but should keep a low profile. 
Mann added Mammadyarov also noted the need for Turkmenistan 
to send an ambassador to Baku to facilitate bilateral work. 
 
¶10.  (C) President Berdimuhamedov thanked PDAS Mann for his 
briefing and added that he very much values the U.S. view. 
"The Azeris are good people, and we want to be real friends." 
 However, he said, Ashgabat-Baku work is continuing on its 
own.  He said Ashgabat would send "an experienced ambassador" 
 
ASHGABAT 00001258  003 OF 004 
 
 
to Baku, but he didn,t say when. 
 
TEHRAN CASPIAN SEA SUMMIT 
 
¶11.  (C) Berdimuhammedov then segued into briefing on the 
recent Caspian Sea Summit in Tehran.  He said he had told 
President Aliyev they could decide resource issues 
bilaterally.  "Who could be against that?  Russia!  Moscow 
raises  ecological concerns, about the Caspian, but I 
don,t really think that,s their main concern, is it?" 
Berdimuhamedov asked ironically.  According to his account, 
at the leader-plus-one session in Tehran, Putin had proposed 
requiring full consensus of the five litoral states for 
development of Caspian Sea projects, but Berdimuhamedov said 
he told Putin at the table he did would not agree to that. 
Berdimuhamedov added that he then looked across to Aliyev for 
support, "but Aliyev didn,t say a word.  At the end, Putin 
raced out to be the first with the journalists -- not very 
nice." 
 
¶12.  (C) Intense at this point, Berdimuhamedov added as an 
aside, "Turkey,s President Gul was just in Baku and 
recommended we sell our gas West.  What right does he have to 
give us advice from Baku?"  (NOTE:  President Gul will visit 
Ashgabat the first week of December.  END NOTE.) 
 
¶13.  (C) Berdimuhamedov concluded, "I,m not at all against 
selling our gas West.  I strongly support that.  But we 
ourselves have to work out the details with Azerbaijan.  We 
have a bilateral commission to do just that.  It,s an issue 
of practical questions.  And it,s not a very nice thing (ne 
ochen priyatno) when others tell us what to do.  We have our 
own firm positions."  The President said that there was no 
need to involve Kazakhstan; the issue is with Azerbaijan, and 
the issue can be settled if Azerbaijan pays the debts it owes 
for the Osman/Chirag field.  PDAS Mann suggested positions 
can evolve over time and reiterated U.S. willingness to 
support negotiations if that would be helpful or, 
alternatively, to remain aloof if the parties desire that. 
 
¶14.  (C) Foreign Minister Meredov joined the conversation for 
the first time:  "In Tehran, the President said clearly 
pipelines can be bilateral, and Kazakhstan supports that 
position.  But Azerbaijan didn,t respond.  Azerbaijan 
doesn,t want a Trans-Caspian Pipeline."  PDAS Mann passed to 
President Berdimuhamedov the Russian-language U.S.-prepared 
1999 study on Caspian delimitation.  Berdimuhamedov said, 
"Azerbaijan is simply making excuses.  We need a strong Azeri 
ambassador here."  Mann agreed it,s important to strengthen 
Turkmenistan-Azerbaijan relations.  He assured Berdimuhamedov 
the United States would carefully study his views.  The 
President commented, "Better to measure seven times and cut 
only once." 
 
TRANS-CASPIAN PIPELINE AND OTHER OPTIONS 
 
¶15.  (C) Mann noted that a Trans-Caspian Pipeline, which 
President Berdimuhamedov supports, would be a "grandiose 
project" but cannot proceed without reliable, long-term 
commitments of gas volumes.  That said, Petronas, Burren, and 
Dragon Oil are already producing relatively modest amounts of 
gas from the Caspian that would be sent West through a 
smaller pipeline that would be a step toward the larger goal. 
 
 
¶16.  (C) Berdimuhamedov asked, "Why not start with the entire 
TCP project?"  Mann reaffirmed U.S. support for a large-scale 
TCP but advised that the existing offshore volumes offer an 
 
ASHGABAT 00001258  004 OF 004 
 
 
immediate opportunity.  He proposed that the U.S. and 
Turkmenistan work together on a business study for these 
"early gas" volumes while continuing to look toward a 
large-scale TCP.  Berdimuhamedov gave his assent: "All right. 
 Discuss this further with (Deputy Prime Minister for Oil and 
Gas) Tagiyev and (Director of the State Agency for 
Hydrocarbon Use) Muradov. 
 
¶17.  (C) Mann stressed the importance of bringing in top-tier 
firms for development of the Turkmen energy sector.  He made 
a pitch for the quality and profitability of American firms 
and conveyed to the President a sheet of paper listing, in 
summary form, eight criteria for evaluating investment 
proposals. 
 
FIRST THINGS INVESTORS NEED 
 
¶18.  (C) PDAS Mann passed to Berdimuhamedov a selection of 
comments businessmen had made during TIOGE-2007.  The 
President took time to read the document and commented, "This 
is reality."  Mann said two issues are at the top of the 
list:  difficulty getting visas, and lack of adequate 
information flow, especially Internet access.  On visas, he 
added that the Foreign Ministry is not the problem -- the 
problem is the system.  Berdimuhamedov said, "All right.  We 
will look at this." 
 
¶19.  (C) Mann turned to the wider issue of intelligence 
bodies, persistent interference in business and surveillance 
of business people.  The Soviet-style security controls are 
incompatible with a modern economy.  "This is holding back 
growth."  He urged Berdimuhamedov to draw the distinction 
between bona fide security threats -- terrorists, the 
Taliban, narcotraffickers -- and imaginary ones. 
 
¶20.  (C) Berdimuhamedov commented, "We can solve the visas 
and Internet issues, but security is a difficult question." 
Mann persisted, "We understand you have legitimate security 
concerns, but foreign business people here feel  Stalinist 
control.,"  Berdimuhamedov replied, "We will look at this." 
 
¶21.  (C) COMMENT:  This meeting was important for advancing 
U.S. views directly and unfiltered with President 
Berdimuhamedov.  It was notable that the sometimes-prickly 
President accepted calmly both the discussion of investment 
criteria and businesspersons, reactions and the papers 
summarizing them.  Although he might not change policies 
overnight, we believe he takes U.S. views into consideration 
when they are delivered by a senior official from Washington. 
 We were struck by Berdimuhamedov,s readout of the Teheran 
Summit, both by his assertion that he had taken a firm (and 
USG-friendly) line with Putin, as with his sense of letdown 
from Aliyev.  If fully true, that,s a welcome stance on a 
key issue, though we understand that cross-Caspian pipelines 
and delimitation accords will not be simply achieved.  It 
argues as well that there is all the more reason for 
Presidents Aliyev and Berdimuhamedov to communicate directly 
and more frequently. The overall impression was one of a 
leader intent on bringing wider and better energy development 
to Turkmenistan but still unsure of the ways in which the 
global private sector works to do this. END COMMENT. 
HOAGLAND