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P 101306Z MAR 08
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UNCLAS SECTION 01 OF 02 ASHGABAT 000327 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/RUS, EUR/CARC, EEB 
PLEASE PASS TO USTDA DAN STEIN 
COMMERCE FOR HUEPER 
ENERGY FOR EKIMOFF/THOMPSON 
 
E.O. 12958: N/A 
TAGS: PREL EPET PGOV TX
SUBJECT:  TURKMENISTAN:  PRESIDENT VISITS SOUTH YOLOTEN AND OSMAN 
FIELDS 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY:  On March 4 President Berdimuhamedov visited the 
South Yoloten and Osman onshore oil and gas fields.  According to 
Turkmenistan media reports, the field has a potential of 3 trillion 
cubic meters of gas.  The timing of the trip to South Yoloten and 
Osman fields did not have an apparent explanation, since there has 
not been any significant change in the operations or reserve 
estimates.  The trip may have been organized on short notice to 
convince Berdimuhamedov that national companies can indeed 
successfully operate at depths of 4,500 meters.  There is also the 
possibility he felt the need to advertise internationally that 
Turkmenistan has plenty of gas to meet its commitments, and more. 
END SUMMARY. 
 
HOW MUCH GAS IS OUT THERE? 
 
¶3.  (U) During his day-long trip March 4 to the South Yoloten and 
Osman onshore oil and gas fields located 50 kilometers south of Mary 
city, President Berdimuhamedov visited one oil well and three gas 
exploration wells.  The first discoveries date back to 2006, but 
President Berdimuhamedov inaugurated the fields by torching gas 
flares and turning oil control valves at several of the wells. 
According to Turkmenistan media reports, the field has a potential 
of 3 trillion cubic meters of gas, reportedly making it one of the 
largest gas fields in the world.  The gas wells are reported to be 
as deep as 4,500 meters.  Initial tests ran on these wells yielded 
daily flow rates of 0.7 million cubic meters, 1 million cubic meters 
and 7 million cubic meters of natural gas.  Official reports also 
mention six more gas wells and three oil wells, also with good 
production rates.  No test result figures were provided regarding 
these wells.  The same reports indicate that the formation has a 
thickness of more than 600 meters, but fail to mention any 
information on thickness of actual reservoirs. 
 
¶3.  (U) Turkmenistani experts claim that South Yoloten and Osman, 
which were considered separate structures in the Soviet era, are one 
giant field.  In November 2006, several days after a massive 
blow-out of one of Osman's exploration wells, former President 
Niyazov announced that the Southern Yoloten-Osman had 7 trillion 
cubic meters of gas.  However, the current figure that Turkmenistan 
quotes is only 3 trillion cubic meters.  On December 26, 2007, 
President Berdimuhamedov instructed hydrocarbon officials to perform 
an international audit of the hydrocarbon reserves of South Yoloten 
and Osman fields, but the work has not yet commenced. 
 
¶5.  (U) Exploration of the South Yoloten field was first launched in 
2005, and a year later the field started to produce its first oil. 
However, the oil production remains insignificant.  It is supplied 
to the Seydi refinery by rail.  Exploration and production wells in 
the South Yoloten and Osman fields are drilled with the help of 
Parker Drilling/Chalik Enerji and the Chinese National Petroleum 
Company's (CNPC) Changqing Petroleum Exploration Bureau.  CNPC 
signed a service contract with Turkmengeology in April 2007 to drill 
12 natural gas wells within three years.  Post understands that both 
Parker Drilling and CNPC experienced blow outs while drilling. 
 
¶6.  (SBU) COMMENT.  The timing of the trip to South Yoloten and 
Osman fields did not have an apparent explanation, since there has 
not been any significant change in the operations or reserve 
estimates.  On the contrary, the announced potential gas volume is 
lower than had been first declared by President Niyazov in 2006. 
The visit occurred several days after Ambassador Mann's visit to 
Turkmenistan and discussions of Turkmenistan's technological 
capability to produce in the sub-salt Jurassic layers.  The trip may 
have been organized on short notice to convince Berdimuhamedov that 
national companies can indeed successfully operate at such depths. 
There is also the possibility he felt the need to advertise 
 
ASHGABAT 00000327  002 OF 002 
 
 
internationally that Turkmenistan has plenty of gas to meet its 
commitments, and more.  END COMMENT. 
 
HOAGLAND