Books on Turkmenistan
Update No: 295 - (26/07/05)
Turkmenistan is a North Korea-like dictatorship, run by former
Communist Party chief Saparmurat Niyazov. The republic of 5 million has the
world's fifth-largest natural gas reserves. Even if Turkmenistan continues
intensive gas production, its reserves will last for a long time, as its proven
reserves are estimated at 22.5 trillion cubic meters.
But the country has no observable public politics. Experts say the crunch will
come when Niyazov dies, and rumours, not to be relied upon, persist that he may
Turkmen ambition to diversify export markets for its gas
In September 2005, Ukraine and Turkmenistan might sign a 25-year contract on
supplies of Turkmen natural gas to Ukraine, which will turn the Central Asian
republic into Ukraine's main gas supplier. "I have handed over Ukrainian
President Viktor Yushchenko's invitation to President Saparmurat Niyazov of
Turkmenistan to visit our country and sign the contract on natural gas
deliveries to Ukraine for the period of 25 years," Alexei Ivchenko, the
board chairman of Naftogaz, Ukraine's national oil and gas company, told a news
briefing at the end of June.
Ivchenko said Niyazov had given his verbal agreement to visit Ukraine in
September. This would be a bold move by Niyazov, who is normally too frightened
of a domestic upheaval in his absence to go in for foreign travel. Recent events
in Kyrgyzstan and Uzbekistan, one would have thought, would have made him even
more nervous here. Still, the trip has yet to happen.
There are certainly big issues at stake. "Ukraine is drafting the
contract," said Ivchenko. "We expect Turkmenistan to supply 60 billion
cubic meters of natural gas (a year) to Ukraine." Ivchenko did not disclose
how much the contract was worth, saying it was a commercial secret.
He said the contract might come into force in 2007.
Turkmenistan supplies natural gas to Ukraine via Russia and satisfies about 50%
of the country's demand for the fuel.
Russia and Turkmenistan have signed a 25-year agreement on cooperation in the
natural gas sector already, and Gazexport, an affiliate of the Russian gas giant
Gazprom, currently buys Turkmen gas at US$44 per a thousand cubic meters. In
2007, Turkmenistan will start selling gas to Russia at world prices, or the two
countries could switch to a payment scheme used in contracts with Western
partners, which is linked to the "oil products basket."
Turkmenistan has been energetically developing its natural gas exports. It has
signed a contract on gas exports to Iran for the period till 2018. However, the
republic is not able to deliver more than 13 billion cubic meters of natural gas
a year to the country for technological reasons. At the same time, Turkmenistan
delivers 30-40 billion cubic meters, at US$42 per 1,000 cubic meters, to Ukraine
every year. Turkmen officials have repeated their country intends to increase
gas exports to 100 billion cubic meters a year overall by 2010, with output at
120 billion cubic meters.
Even if Turkmenistan continues intensive gas production, its reserves will last
for a long time, as its proven reserves are estimated at 22.5 trillion cubic
Niyazov: Strengthening ties with European countries a priority
Niyazov is clearly trying to end the isolation of his regime in economic
although not in political and religious affairs, something he had previously
seemed almost to cherish. For example he fully backed a conference,
"International Commercial Arbitration," that started in Ashgabat on
June 3rd. It was organised by the Turkmen government, and the German and British
embassies, in association with the German Association of Technical Cooperation.
The participants comprised representatives of the judiciary, the general
prosecutor's office, the ministry of trade and consumer cooperation, other state
organisations of Turkmenistan as well as international experts, including Robert
Briner, the president of international arbitration court under the international
chamber of commerce and Yan Paulson, the president of the London court of
international arbitration, the professor of law of the University of Breman
association for technical cooperation (GTZ) Rolf Knipper.
A steady growth in trade turnover between Turkmenistan and the EU countries
interested in purchasing world-standard oil products and high quality textile
products is evidence of the significant boost in the Turkmen-European
relationship. Turkmenistan pays a great deal of attention to legal matters in
trade relations and investments in the process of integration into the world
economy. Niyazov expressed interest to start joint work on training highly
qualified national specialists for the country's judicial system.
The conference participants discussed the arbitration court international
practice in Turkmenistan. At the conference, the centre of discussion was
related to issues like the role and importance of arbitration disputes, ensuring
their lawfulness in the sphere of international trade-economic relations
especially in the sphere of trade and attraction of investments. Niyazov
informed the international experts on the major directions of Turkmenistan's
domestic and foreign policies, noting the priority of the task on strengthening
mutually beneficial cooperation with the European countries. At the same time,
he underlined that these goals have to serve the long-term interest of his
On accepting this proposal, Briner said a special programme could be drawn up
for training of Turkmen law specialists on a broad mutually advantageous basis.
During the talks, both discussed prospects of bilateral partnership. Knipper who
has been consulting local specialists for over 12 years expressed his hope that
a regional centre for solving arbitration issues could be set up in Ashgabat. In
an interview with the state news agency, the participants in the conference
noted that during the meeting both sides discussed several interesting and
specific proposals that can be implemented in future. Ashgabat is the ideal
place for holding such forums, for this ancient city is a most interesting
symbol of changes happening on Turkmen soil, but as an arbitration centre it
obviously falls short of such renowned cities as Zurich, Stockholm or London.
For example, the international corruption watchdog - Transparency International
- currently ranks Turkmenistan as 121 in the world for corruption, and our
sister site, worldaudit.org, ranks them as 101 (out of 150) for democracy.
Turkmen grain growers harvest 2m tonnes of wheat
The statistics office of the republic of Turkmenistan recently announced
that state granaries received two million tonnes of grain harvested this season,
According to local experts, if the pace of daily harvesting continues then grain
growers of Turkmenistan will be able to fulfil the government order of 3,100m
tonnes of grain in the first quarter of July. It is necessary to recall that the
country achieved grain independence in the second half of the 90s of the last
century. In the Soviet period, Turkmenistan barely harvested 70,000 tonnes of
Turkmen Naip plant reaches planned production capacity
The Naip liquefied gas production plant constructed by the Canadian company
Termo Design Engineering Ltd in western Turkmenistan reached its planned
production capacity ahead of schedule, Turkmenistan.ru reported recently, citing
the Turkmen Ministry of Oil and Gas Industry and Mineral Resources.
Using raw materials from the Naip group of fields, this plant has produced
60,000 tonnes of liquefied gas since the beginning of this year, an increment of
41% on the same period of last year. According to experts, the plant's annual
capacity is some 130,000 tonnes of liquefied gas, a 17,500 tonnes increase on
the plant's planned production capacity. The head in charge of the plant said
that such high results would be possible due to the improved cooling system and
technological process of production. The Naip plant on domestic fuel production
is a super modern industrial complex consisting of 3 automatic lines bound by
the united operating system.
FOREIGN ECONOMIC COOPERATION
Niyazov invites Ukrainian firms to join new projects
Turkmen president, Saparmurat Niyazov, announced on June 24th that Ukrainian
road construction workers may become general contractors for a modern highway
linking Ashgabat with Mary and some parts of the Ashgabat-Turkmenbashi highway
at a later stage on condition that the cost of two kilometres of a
world-standard dual highway would not exceed US$500,000. Niyazov's comments came
prior to the signing ceremony of a new agreement with Ukraine on the purchase of
Turkmen natural gas for the second part of the year and for 2006. He also
invited Ukrainian partners to participate in the reconstruction of the Seidi oil
refinery and modernisation of a chemical fertilisers plant in Mary.
Meanwhile, a Ukrainian delegation arrived in Ashgabat for debt settlement talks.
A delegation of the National joint-stock company Neftegaz Ukrainy led by board
Chairman Alexei Ivchenko arrived in Ashgabat on June 23rd as instructed by the
president and government of Ukraine, Turkmenistan.ru reported, citing the press
service of the Turkmen Foreign Ministry.
Dwelling on the prospects of Naftogaz Ukrainy company involvement in the
development of the Turkmen shelf of the Caspian Sea, Niyazov stressed that
development of onshore hydrocarbon deposits remain a choice of the national
entities of Turkmenistan.
According to the president, this approach was adopted due to the lack of
facilities for transportation of hydrocarbons to the world market. In this
context, Niyazov called on partners to intensify work on drafting a project of
construction of the Caspian gas pipeline Turkmenistan-Kazakstan-Russia-Ukraine.
According to the foreign ministry, the delegation of Ukraine will continue talks
with the Turkmen government on the issue of repayment by the Ukrainian side of
the debt for Turkmen gas supplies.
MTS picks up BCTI shares for US$28m
Mobile TeleSystems OJSC, the largest mobile phone operator in Russia and the
CIS, announced on June 27 that it had acquired a 51 per cent stake in Barash
Communications Technologies Inc (BCTI), which has a subsidiary operating in
Turkmenistan, Turkmenistan.ru reported.
In a statement, the company said it purchased the 51 per cent stake from the
company's founders for US$28.05m Euro. MTS is also interested in purchasing the
remaining 49 per cent in the company within the next eight months. The price of
the remaining stake will depend on the operating and financial performance of
the company but will not exceed 26.95m Euro. According to MTS' president and
chief executive, the entry of MTS in the Turkmen market is an important step in
implementing the company's strategy of geographical expansion into neighbouring
countries with high growth potential for the mobile industry. Experts noted that
MTS' purchase in Turkmenistan would be the last significant acquisition by the
Russian mobile operators in the CIS markets. Alexei Yakovotski from UFG said
last week that the MTS' deal in Turkmenistan is quite profitable for the Russian
company as the financial standing of the republic is "very attractive and
it has great potential."