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TURKMENISTAN - PDF

VIEWS: 34 PAGES: 6

									                    Overview of Oil & Gas Sector


                     Turkmenistan was a substantial natural gas producer under the
                     Soviet Union, but after the country became independent, Turkmen
                     natural gas became a competitor with Russian natural gas. Since
                     Turkmenistan’s only natural gas export routes ran through Russia,
                     Gazprom limited Turkmen natural gas exports, and as a result
                     Turkmenistan’s natural gas production sagged throughout the
                     1990s. Following the resolution of a pricing dispute with Russia in
                     1998 and the construction of an export pipeline to Iran,
                     Turkmenistan’s natural gas production began to climb steadily. In
                     2001, the country’s natural gas production jumped to 1.64 Tcf
                     against consumption of just 0.26 Tcf. Turkmengas produced 85%
                     of this total, with Turkmenneft accounting for the remaining 15%.
                     Through the first two months of 2002, Turkmenistan already had
                     produced 413 billion cubic feet (Bcf) of natural gas.
     TURKMENISTAN


                     Turkmenistan has some of the world’s largest deposits of natural
                     gas, with proven natural gas reserves of approximately 101 trillion
                     cubic feet (Tcf). The largest natural gas fields are in the Amu-Dar’ya
                     basin, with perhaps half of the country’s natural gas reserves
                     located in the giant Dauletabad-Donmez field. In addition to Amu-
                     Dar’ya, Turkmenistan contains large natural gas reserves in the
                     Murgab basin, particularly the giant Yashlar deposit, which contains
                     an estimated 27 Tcf. During the last 10 years, Turkmenistan also
                     has discovered 17 new natural gas deposits in the Lebap, Mary, and
                     Deashoguz regions of the country.

                     Turkmenistan has 546 million barrels in proven oil reserves, with
                     possible reserves (mainly in the western part of the country and in
                     undeveloped offshore areas in the Caspian Sea) of up to 1.7 billion
                     barrels. The country’s 81,000 bbl/d in 1995, has increased
                     dramatically in the past six years, reaching 156,400 bbl/d in 1999
                     before leveling off in the past two years. In 2001, Turkmenistan
                     produced 159,000 bbl/d of oil while consuming 52,000 bbl/d.
                     Turkmenneft, the state oil company, produced approximately 90%
                     of this total, with the remainder coming from the state natural gas
                     company, Turkmengas, and several foreign oil companies operating
                     under PSAs in Turkmenistan.

                     In 2002, Turkmenistan seeked to increase its oil output to 200,000
                     bbl/d, with additional production to come from newly developed

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                                                                               T U R K M E N I S T A N
wells in the western part of the country. Under a 10-year program
dictated by President Niyazov, Turkmenistan aims to raise its oil
production to nearly 1 million bbl/d by 2010.

In an effort to create a better business climate to attract foreign
investment, in June 1998 Turkmenistan restructured its oil and gas
industries into several state-owned companies. Although the
country has attempted to ease restrictions on foreign investment,
many layers of regulation remain in place. Turkmenistan maintains
prohibitive rules that prevent companies using subsurface
resources to export hydrocarbons. Since foreign investors do not
have access to export pipelines (state-run Turkmenneft,
Turkmengas, and Turkmenneftegaz, the oil and natural gas
marketing company, currently own all of the country’s pipelines),
they are forced to sell the oil and natural gas they produce in
Turkmenistan through the state commodities exchange or send it
to refineries. Oil and natural gas are sold in Turkmenistan at fixed
prices that are well below world market levels.

As such, Turkmenistan must solve the problem of getting its natural
gas to consumers, as well as getting paid in hard currency. The
country has been unable to capitalize on its natural gas resources
because it lacks pipeline outlets to world markets. As a result,
Turkmenistan is forced to sell its natural gas to ex-Soviet states that
either cannot pay fully in cash or are tardy with payments for
supplies already received.

The existing structure of the industry was essentially determined in
1996 by the Decree of the President of July 1, 1996. Under this
degree, independent national companies were formed: State
Concern (SC) Turkmengas, State Concern Turkmenneft, State
Concern Turkmengeologia, State Concern Turkmenneftegas and
State Concern Turkrmenneftegasstroy.




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                    Organisational Chart


                    ORGANISATIONAL STRUCTURE OF
                    TURKMENISTAN’S OIL AND GAS INDUSTRY

                                      PRESIDENT OF TURKMENISTAN
                                           Mr. Saparmurat Niyazov


                          COMPETENT                  CABINET OF               STATE AGENCY
                         AUTHORITY FOR                MINISTERS              FOR CASPIAN SEA
                             USE OF                Committee for Oil &        ISSUES UNDER
                         HYDROCARBON                  Gas Industry           TURKMENISTAN’S
                                                  and Mineral Resources         PRESIDENT
                           RESOURCES                                             Chairman
                                                    Head – Mr.Yolly
                                                   Gurbanmuradov               Mr. Khoshgeldy
                         STATE FUND FOR
                         DEVELOPMENT OF                                            Babaev
     TURKMENISTAN


                             OIL&GAS
                          INDUSTRY AND
                             MINERAL
                            RESOURCES



                                              MINISTRY OF OIL & GAS
                                                    INDUSTRY
                                                  AND MINERAL
                                                   RESOURCES
                                                      Minister
                                              Mr. Amangeldi Pudakov
                              STATES CONCERN                                STATE
                                TURKMENNEFT                             CORPORATION
                             State Minister-Chairman                TURKMENGEOLOGYA
                            Mr. Saparmamed Valiev                   State Minister-Chairman
                                                                  Mr. Orazmoukhammet
                                                                       Atageldyev
                               STATE CONCERN
                                TURKMENGAS
                             State Minister-Chairman                     STATE TRADE
                               Mr. Guychnazar                           CORPORATION
                                Tachnazarov                          TURKMENNEFTEGAS
                                                                    State Minister-Chairman
                                                                      Mr. Ilyas Charyev
                                 STATE CONCERN
                            TURKMENNEFTEGAZSTROY
                               State Minister-Chairman
                                  Mr. Gurbanberdy
                                   Orazmuradov



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                                                                        T U R K M E N I S T A N
List of Governmental Entities and Public Institutions


 PRESIDENT OF TURKMENISTAN
 Shapes the policies for the oil and gas complex of
 Turkmenistan. The President heads the Competent
 Authority for Use of Hydrocarbon Resource, the State Fund
 for the Development of the Oil and Gas Industry and Mineral
 Resources and the State Agency for Caspian Sea Issues.

 COMPETENT AUTHORITY FOR USE OF
 HYDROCARBON RESOURCES
 Enjoys the exclusive right and power to negotiate, issue
 licenses and conclude contracts and also to supervise the
 performance of contract concerning the use of hydrocarbon
 resources of Turkmenistan. Contact Details: Address: 56,
 Archabil Str., 1939, Ashgabat 744036, Turkmenistan,
 Tel: (+993 12) 403800-03,403812, e-mail: combody@online.tm

 CABINET OF MINISTERS
 Develops strategy for the oil and gas complex. The
 Committee on Oil and Gas Industry and Mineral Resources
 function within the Cabinet structure. The Committee
 directly supervises the activities of Turkmengas, Turkmenneft,
 Turkmenneftegas, Turkmengeologia, Turkmenneftegasstroy
 and the Ministry of the Oil and Gas Industry and Mineral
 resources of Turkmenistan. Contact Details: Address: 56,
 Archabil Str., 1939, Ashgabat 74400, Turkmenistan,
 Tel: (+993 12) 355161

 MINISTRY OF OIL AND GAS INDUSTRY AND MINERAL
 RESOURCES
 Defines the unified national and technical policy pertaining to
 the development of fields, rational use of mineral resources,
 related analytical work and elaboration of plans for
 prospecting and development of the nation’s raw minerals
 base. Contact Details: Address: 56, Archabil Str., 1939,
 Ashgabat 744036, Turkmenistan, Tel: (+993 12) 403000-01,
 Fax: (+993 12) 403044, e-mail: ministryoilgas@online.tm




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                    STATE AGENCY FOR CASPIAN SEA ISSUES
                    Develops and implements national programs for the utilization of
                    natural resources of the Turkmen sector of the Caspian Sea and
                    also supervises their implementation. Contact Details: Address:
                    56, Archabil Str., 1939, Ashgabat 744036, Turkmenistan,
                    Tel: (+993 12) 403700-01, e-mail: gphazar@online.tm

                    STATE FUND FOR THE DEVELOPMENT OF THE OIL
                    AND GAS INDUSTRY AND MINERAL RESOURCES
                    Supports production and processing of oil and gas in
                    Turkmenistan and assists with the overall development of the
                    nation’s raw material base. Contact Details: Address: 56,
                    Archabil Str., 1939, Ashgabat 744036, Turkmenistan,
                    Tel: (+993 12) 403600-01
     TURKMENISTAN


                    STATE CONCERN TURKMENGAS
                    Conducts exploration, drilling, development, production and
                    processing of gas and gas condensate throughout the entire
                    territory of Turkmenistan, as well as transportation of gas.
                    The concern has full autonomy in day-to-day management of
                    its production and business activities. The company reports
                    to the President of Turkmenistan and the Cabinet of
                    Ministers. Contact Details: Address: 56, Archabil Str., 1939,
                    Ashgabat 744036, Turkmenistan, Tel: (+993 12) 403200-01,
                    Fax: (+993 12) 403254, e-mail: turkmengas@online.tm

                    STATE CONCERN TURKMENNEFT
                    Conducts exploration, drilling, development, production and
                    processing of oil throughout the entire territory of
                    Turkmenistan, as well as transportation of oil and gas. The
                    concern has full autonomy in day-to-day management of its
                    production and business activities. The company reports to
                    the President of Turkmenistan and Cabinet of Ministers.
                    Contact Details: Address: 56, Archabil Str., 1939, Ashgabat
                    744036, Turkmenistan, Tel: (+993 12) 403620-21, Fax:(+993
                    12) 403622, e-mail: nebitout@online.tm




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                                                                        T U R K M E N I S T A N
STATE TRADING CORPORATION TURKMENNEFTEGAS
Markets the hydrocarbon resources produced in
Turkmenistan, processes the raw materials and exports the
output. Turkemenneftegas concludes foreign trade contracts
and oversees their implementation. In addition
Turkmenneftegas provides fuel resources to the nation’s
consumers-the population and industry. This concern is
subordinate to the President of Turkmenistan and Cabinet of
Ministers. Contact Details: Address: 56, Archabil Str., 1939,
Ashgabat 744036, Turkmenistan, Tel: (+993 12) 403100-01

STATE CONCERN TURKMENGEOLOGIYA
Is a specialized business and industrial complex that ensures
the development of the geological sector and comprehensive
study of the material wealth of Turkmenistan. It also
supervises geological study of mineral resources and
collection and storage of information on mineral deposits.
This concern is subordinated to the President of
Turkmenistan and Cabinet of Ministers. Contact Details:
Address: 56, Archabil Str., Ashgabat 744036, Turkmenistan,
Tel: (+993 12) 403400-01, Fax: (+99312) 403449.

STATE CONCERN TURKMENNEFTEGASSTROY
Is a state-run construction company that is engaged in the
development of all manner of oil and gas facilities. It operates
independently in its daily management of production and
business activities. However this concern is also subordinate
to the President of Turkmenistan and Cabinet of Ministers.
Contact Details: Address: 56, Archabil Str., 1939, Ashgabat
744036, Turkmenistan, Tel.: (+993 12) 403500-01, Fax:
(+99312) 403578, e-mail: tngs@online.tm

EC Delegation & Tacis National
Co-ordinating Unit
INTERNATIONAL TECHNICAL ASSISTANCE
Director of the Co-ordinating Unit - Mr. Palvan Taganov.
Contact Details: Address: 92, Kemine Str., Ashgabat 744000,
Turkmenistan, Tel: (+993 12) 351020/353114, Fax: (+993 12)
393120, e-mail: ptaganov@tacistm.org.

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