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Books on Turkmenistan
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Update No: 324 - (19/12/07)
Locked away during Soviet times and later under the 21-year
rule of Niyazov, Turkmenistan has been slowly opening its doors since Kurbanguly
Berdymukhamedov came to power a year ago. He has made no obvious breach with
Moscow, indeed has signed a new deal to send gas via Russia to Western markets.
But he is showing initiative for all that.
New resort on the Caspian Sea
In a bold move Turkmenistan's new leader has inaugurated the construction of a
$5 billion (2.4 billion pound) tourism complex on the Caspian coast. This was on
December 3, his latest gesture to open up the reclusive nation to the world.
Unlike Niyazov, who banned ballet and opera during his rule, Berdymukhamedov has
sought to attract foreign investment and turn his desert nation into a tourist
destination. This is not as absurd as it might seem. Turkmenistan is a very
beautiful country in its extremities, if not so in its huge desert interior. In
particular it abuts in the west on the evocative and historic Caspian Sea.
He has officially opened construction of a complex on the Caspian Sea coast,
where he plans to build dozens of new hotels, fountains, roads and parks.
"Any government that has such a coast would see it as a huge
blessing," he said after a ceremony. "Turkmenistan is actively
integrating into the global community while following its own model of
development."
State media have touted the area as a tourist hotspot, but critics believe its
long, cold winters and remote location dent its allure as a tourist destination.
But there is summer and the attraction of the exotic and the arcane.
The Turkmen leader said the government would earmark $1 billion for the project,
not far from the Iranian border, while foreign companies including Russia's
Itera and France's Bouygues have pledged to put in a further $4 billion.
He vowed to introduce tax breaks for construction companies and easier visa
procedures for tourists -- a step forward for a country, which was first in the
ex-Soviet block to introduce a visa regime for other former members.
President Abdullah Gul of Turkey started his state visit to Turkmenistan late
Wednesday as the two countries prepared to sign agreements to boost economic and
commercial relations.President Gul will stay in Turkmenistan until Friday as the
guest of President Gurbanguly Berdimuhamedov. State Minister Sait Yazicioglu,
Industry and Trade Minister Zafer Caglayan and Energy and Natural Resources
Minister Hilmi Guler accompany Gul. Officials will discuss bilateral relations
between Turkey and Turkmenistan, as well as recent regional and international
topics. President Gul will also hold meetings with Turkish community and
businessmen of Turkish descent living in Turkmenistan. Gul and Berdimuhamedov
will attend the inauguration of Dashoguz power plant.
Turkey getting in on the Act
Turkey plans to offer Turkmenistan access to European markets via Turkey in
talks in Ashgabat this week, senior government sources told Reuters on
Wednesday.
Turkey, which is seeking to become a regional energy transit hub, will also
propose to Turkmenistan a joint venture for operating the ex-Soviet state's
abundant natural gas and oil fields.
"Turkey will ask to take a role in operating Turkmenistan's natural gas and
petroleum fields as we did with some other supplier countries," an official
in the prime minister's office said.
Turkish President Abdullah Gul begins an official visit to Turkmenistan on
Wednesday as part of Ankara's drive to strengthen ties with the Turkic-speaking
states of Central Asia. Energy Minister Hilmi Guler will join Gul's delegation.
Turkey has signed a natural gas supply contract with Iran but some European
Union countries have misgivings because Iran is subject to United Nations
sanctions over its nuclear programme.
Turkey plans to invest $3.5 billion in Iran's gas fields. Another official said
Ankara is considering transportation of Turkmen gas through a Trans-Caspian
pipeline or through Iran.
Turkey has already signed a deal for buying 30 billion cubic metres gas from
Turkmenistan, but no concrete steps have been taken on this.
Does he have it?
When it comes to energy-related deals, Turkmenistan’s leader, Gurbanguly
Berdymukhamedov, is picking up where his predecessor, the megalomaniacal
Saparmurat Niyazov, left off; making promises that the Central Asian state may
or may not be able to ultimately fulfil.
Despite the uncertainty, foreign governments and conglomerates still feel
compelled to keep dealing with Ashgabat. Turkmenistan is believed to be one of
the top five nations in the world, in terms of natural gas reserves. The problem
is that no one, except perhaps Berdymukhamedov and his inner circle, knows the
precise amount. Results of an independent audit of Turkmenistan’s reserves
have never been released.
According to some estimates, the country could be sitting on top of as much as 9
trillion cubic meters of gas, or as (comparatively) little as 2 trillion cubic
meters. Berdymukhamedov, who assumed power following Niyazov’s sudden death in
late 2006, is certainly acting like the high-end estimate is accurate. In recent
months, he has taken steps to open up Turkmenistan’s economy, especially the
energy sector. As a result, a virtual conga-line of energy executives has been
passing through Ashgabat. The most recent energy honcho to pay respects in
Ashgabat was Arnaud Breuillac, who oversees Central Asia operations for the
French energy giant Total. Like other executives who arrived before him,
Breuillac expressed a keen desire to get in on the energy-development action in
Turkmenistan, the state news agency TDH reported December 4.
The pipelines
Over the last year, Turkmenistan has shown interest in three major pipeline
projects; the Prikaspiisky route that would vastly expand Turkmen exports via
Russia; the Western-controlled trans-Caspian route to Azerbaijan; and an Eastern
connection with China. Berdymukhamedov in late November signalled a desire to
hasten the expansion of the Prikaspiisky pipeline. Many experts believe that
completion of the Prikaspiisky project, now expected in 2012, would enable
Russia to prolong its dominance over Turkmen gas exports. Berdymukhamedov,
however, continues to indicate that Turkmenistan possesses enough gas not only
to fulfil a deal already signed with China, but to also have enough left over to
make construction of a trans-Caspian pipeline economically viable.Since this
spring, Berdymukhamedov has touted the supposed recent discovery of a vast gas
reserve, dubbed the Osman field. With no ability to independently verify the
information, foreign experts are cautious about accepting Turkmen official
announcement at face value. In 2005, Niyazov is said to have commissioned an
independent audit of Turkmenistan’s reserves. The findings were never publicly
released.
If Berdymukhamedov is bluffing, none of the corporations or governments engaged
with Ashgabat seems willing to call it. Companies remain eager for opportunities
to enter the Turkmen market. On December 3, construction began on a $4-billion
development project that would transform the western city of Turkmenbashi into a
tourist destination.
One of the chief investors in the project is the Russian energy company Itera.
Also on December 3, the chief of the Kazakhstani energy company KazMunaiGaz,
Uzakbai Karabalin, met with Berdymukhamedov and expressed interest in the
entity’s involvement in tourism-related projects, according to a report
distributed by the Turkmenistan.ru website.
Price hike
An indicator of the tremendous leverage now wielded by Berdymukhamedov was the
late November agreement by the Russian conglomerate Gazprom to a phased-in 50
percent increase in the price it pays for Turkmen gas which currently costs
Gazprom $100 per thousand cubic meters (tcm). The price by the second half of
2008 will reach $150/tcm.
Russia has shrugged off the price hike, with government officials saying the
increased costs would be passed along to energy importers, specifically Ukraine.
On December 4, Gazprom issued a statement announcing that Ukraine had agreed to
a new gas import price of $179.5/tcm. Gazprom’s agreement to meet
Turkmenistan’s gas price seemed linked to Ashgabat’s commitment to an
acceleration of the Prikaspiisky project timeline. Russian political analysts
nevertheless voiced unease over Turkmenistan’s behavior. One commentary posted
December 4 on the Novaya Politika news website suggested that Berdymukhamedov
had explored export options with US and European Union officials merely to drive
up the price for Russia. "Turkmenistan’s strategy has apparently paid
off," the commentary said. Economic analyst Sergei Sklyarov, writing in the
Nezavisimaya Gazeta newspaper, wondered whether Moscow’s economic influence
was on the ebb in Central Asia. "Russia, for the first time in post-Soviet
history, found itself in a situation that a decade ago would be described as
‘the tail wagging the dog," Sklyarov wrote. "Two countries,
Turkmenistan and Uzbekistan, just recently seen by Russia as Russian satellites
if not zones of absolute influence, have refused to sell natural gas to Gazprom
at low prices. "The Turkmen used to be happy when they managed to negotiate
an increase of a few dollars per tcm," the commentary continued. "The
situation changed fundamentally after Ashgabat agreed with China and the
European Union about two alternative pipelines – the [trans-Caspian route] and
one to China via Kazakhstan.
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