VZCZCXRO1476
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDBU RUEHDF RUEHIK RUEHLH RUEHLN
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DE RUEHAH #0908 2011034
ZNR UUUUU ZZH
P 201034Z JUL 09
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 3166
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
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RUEHAK/AMEMBASSY ANKARA 5451
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RUEHIT/AMCONSUL ISTANBUL 3695
RUCNDT/USMISSION USUN NEW YORK 1058
RHMCSUU/CDR USCENTCOM MACDILL AFB FL
RUEHVEN/USMISSION USOSCE 3730
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UNCLAS ASHGABAT 000908 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/CEN; EEB 
PLEASE PASS TO USTDA DAN STEIN 
ENERGY FOR EKIMOFF/THOMPSON 
COMMERCE FOR HUEPER 
 
E.O. 12958: N/A 
TAGS: EPET PGOV EINV TX IR
SUBJECT: GERMAN RWE SIGNS PSA WITH TURKMENISTAN 
 
REF: A. Ashgabat 515 
 ¶B. Ashgabat 869 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY: On July 16, RWE AG, a German energy company (and 
Nabucco pipeline project shareholder) and the Government of 
Turkmenistan signed a production sharing agreement (PSA) for Block 
23 of the contractual territory located with Turkmenistan's Caspian 
Sea territorial waters.  According to the agreement, RWE has 
received a six-year license to conduct exploration on Block 23 and 
will receive a 25-year license authorizing the company to 
commercially develop hydrocarbons on Block 23 if sufficient reserves 
are discovered during the exploration process. END SUMMARY. 
 
¶3.  (SBU) Block 23 is located in the southeastern part of 
Turkmenistan's Caspian Sea territorial waters about 40 kilometers 
north of Iran's land border and is adjacent to Turkmenistan's coast. 
 It is triangle-shaped, with an area of about 940 square kilometers. 
 According to official Turkmen sources, the Block has potential 
reserves, primarily of natural gas.  An international company 
representative working in Turkmenistan told us that the Block is 
believed to be prospective mostly for gas and mentioned that there 
are doubts that discoveries of large hydrocarbon reserves will be 
made there. 
 
¶4.  (SBU) The PSA is part of a larger Memorandum on Long-term 
Cooperation (Memorandum) that RWE and the Government of Turkmenistan 
signed on April 16 (Ref A).  Yagshygeldi Kakayev, Director of the 
State Agency for the Management and Use of Hydrocarbon Resources, 
and RWE AG's Chairman Georg Schning, signed the PSA in President 
Berdimuhamedov's presence in Turkmenbashy.  Before the signing 
ceremony, President Berdimuhamedov discussed the implementation of 
the Memorandum's provisions in a meeting with J|rgen Grossman, RWE's 
Chairman of the Board, and Rudi Lamprecht, Director and founder of 
EWC East West Connect GmbH & Co. KG.  The clear involvement of Mr. 
Lamprecht, who also serves as Executive Advisor to the CEO of 
Siemens AG and as Vice Chairman of the Board of Nokia Siemens 
Networks, in RWE's deals with the Turkmen government, confirms our 
assumption that RWE has been able to enter Turkmenistan's markets, 
in part, due to the good relations that Siemens, and particularly 
Mr. Lamprecht, has managed to build with high-ranking Turkmen 
officials (Refs A and B). 
 
¶5.  (SBU) COMMENT:  The signing of the PSA is RWE's first serious 
step in implementing the Memorandum provisions.  It took the company 
exactly three months to move from the Memorandum to the PSA, rather 
fast given conditions in Turkmenistan.  The ceremony has not 
divulged details of the most intriguing Memorandum provision, which 
states that Turkmenistan and RWE will negotiate a long-term contract 
for the sale and purchase of Turkmen natural gas.  There is still no 
information regarding the status of that contract.  Block 23 itself 
will not make RWE a key energy partner of the Government.  The only 
real indicator of RWE's importance to the Turkmen government will be 
the progress the company is able to make in negotiating the 
long-term contract for the sale and purchase of Turkmen natural gas. 
END COMMENT 
 
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