"ROSSIYSKAYA GAZETA" ON COOPERATION OF MOSCOW AND ASHGABAT IN OIL AND GAS SPHERE
Russia and Turkmenistan continued a dialog on the development of partnership relations in the oil and gas field last week. The formal reason for a meeting was holding the International Conference, "Oil and gas of Turkmenistan", in Ashgabat, with Gasprom representing Russian gas interests.
This time, both sides had an opportunity to get a closer look into the issues of technical and technological nature, discuss the planned volumes of Turkmen oil and gas purchases, joint actions on the expansion and reconstruction of the gas transportation system "Central Asia - Center" and participation in exploration of hydrocarbon resources of Turkmenistan on the basis of principle agreements reached at the governmental level in spring 2003 when Vladimir Putin and Saparmurat Niyazov signed an agreement on cooperation in the gas field for 25 years.
As a matter of fact, volumes of Turkmen gas purchases for a medium term are of particular interest to the Russian side. As deputy CEO of Gasprom Alexander Ryazanov noted at the conference, in 2004, a mammoth gas company will purchase from Turkmenistan "the minimum volume of 4,25 bcm of gas, which was stipulated in a long-term agreement with Turkmenneftgas. Gasprom, however, is not going to confine itself to this figure and plan to purchase over 6 bcm of Turkmen gas in 2005, according to Ryazanov. And by 2009 Russia expects to receive up to 80 bcm of Turkmen gas.
This qualitatively new scale of work requires not only serious reconstruction of the gas transportation system but also a concerted transportation policy in all states, through the territories of which Turkmen gas is shipped. And, finally, Gasprom simply needs to be sure that Turkmenistan has necessary volumes of gas. Now, the Turkmen side has to provide the audit report of the country's gas reserves done in accordance with international standards.
It should be noted that defending its interests in the Turkmen issue, Gasprom is trying to sort out a whole range of both domestic and foreign policy problems. As is known, Russian Senomansk gas reserves are steadily shrinking, the so-called era of cheap gas is over and it is a right time to think about renewing the reserves. Theoretically, it is possible to start developing new fields of Eastern Siberia and Far East right away, but it will take years and multibillion investments to begin the real production and to build thousands of kilometers of pipelines.
Naturally, the tariffs will go up along with cost escalation that will unavoidably result in a serious price hike in the domestic market. That is why a combination with the use of high-quality and cheap Turkmen gas and Russian gas looks more efficient from the economic point of view at least for a medium term.
As for geopolitical aspects, Russia is still interested in gas sales at the European market, while the European Union demands that Russia should diversify its export portfolio. Thus, by purchasing Turkmen gas to honor its obligations under European contracts, Gasprom is enhancing, first of all, Russian export potential and, at the same time, keeps competition with Russian gas low.
On its part, Turkmenistan also wants to keep and develop partnership relations with Russia, for it failed to attract big foreign investors to the projects of construction of bypassing Russia pipelines owing to high economic and political risks and very unstable situation in neighboring Afghanistan and Iran. Neither western countries, nor China can offer a real alternative to the Russian route for Turkmen gas exports in the coming 5-7 years, gas market experts claim. Therefore, for Turkmenistan Russia remains more reliable existing market for hydrocarbon exports.
Along with that, Gasprom is considering a possibility to participate not only in contracts on purchasing raw materials but also to implement joint projects on oil and gas extraction in onshore and offshore fields of Turkmenistan. In the very near future Gasprom, by merging Rosneft, will become an active partner in Zarit consortium founded by Rosneft, Zarubejneft and Itera to develop fields in the Turkmen sector of the Caspian Sea, which Alexander Ryazanov also mentioned at the conference in Ashgabat. At the conference the representative of Gasprom stated the company's readiness to render assistance in exploration and production of gas in the onshore fields of Turkmenistan. It is not clear whether this initiative will be welcomed because the government of the republic underlined that it preferred to develop onshore fields using own resources.
"ROSSIYSKAYA GAZETA", 23.11.2004