Turkmenistan’s leader, veering from a long-standing policy of discouraging international investments, says his country needs capital inflows to realise its oil and gas potential.
President Gurbanguly Berdimuhamedov’s statements at a government meeting in the capital, Ashgabat, were another sign of a nascent opening.
Turkmenistan has the fourth largest proven natural gas reserves on earth and already exports to China and Russia via pipelines.
But the reluctance to attract foreign investors creates an obstacle for its energy sector to fully bloom.
Berdimuhamedov was formally named President in 2007, taking over from Saparmurat Niyazov, who had ruled the country from 1985 until his death in 2006. While Berdimuhamedov’s statement seems mild compared to the drive for investment pursued by Turkmenistan’s Central Asian neighbours, it is a significant step.
Ashgabat has long refused to sign production-sharing agreements with foreign firms for its major onshore gas fields, offering only service contracts.
In a rare acknowledgement that things could be better, President Berdimuhamedov told a government meeting that the volume of hydrocarbon production was not rising. The country exports half of its crude oil output, while refineries are operating at only at 40 percent of capacity.
The Turkmenistan President continued that it was now necessary to stimulate investment activity in the oil and gas sector, much of the potential of which is in offshore Caspian Sea fields, and diversify the processing of raw materials.
“It’s another sign of the first steps in opening his country to foreign firms”, said Temuri Yakobashvili, President of TY Strategies, whose Washington-based firm specialises in guiding would-be investors in the byzantine ways of investments in the countries of Central Asia.
Turkmenistan has in recent months made other first steps in signalling it needs investors and a less isolationist foreign policy.
Energy experts say Turkmenistan is struggling with finding a reliable means to increase its natural gas export capacity.
Its largest natural gas field, Galkynysh, currently produces 30 billion cubic metres (bcm) per year, well below what even the government says is possible.
President Berdimuhamedov said the construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) transnational gas pipeline should be sped up and that other international projects should be explored.
The TAPI pipeline idea has been floating around for over two decades, but the non-stop conflict in Afghanistan has hampered efforts to embark on the project. The pipeline’s terminus is supposed to be India.
Turkmenistan’s foreign minister said late last year that the construction of the 1,125-mile pipeline’s segment in Afghanistan would begin in 2021.