Turkmenistan opens up to West
Turkmenistan is opening its doors to western oil companies for the first time. On Friday, the country's state television identified Chevron, ConocoPhillips and the Houston-based TXOil as the preferred US bidders for two oil and gas exploration blocks in Turkmenistan's portion of the Caspian Sea. Abu Dhabi's Mubadala Oil and Gas is also on the preferred list.
Previously, the central Asian state had resisted western participation in its oil and gas sector. But the tide is turning as Gurbanguli Berdimukhamedov, the Turkmen president, seeks export markets to reduce the country's dependence on Russia. "Turkmenistan is committed to the broad international partnership," Mr Berdimukhamedov said in June after meeting US oil executives. The president proclaimed himself ready to embrace "productive interaction with leading US companies whose extensive experience and advanced technology can be claimed in various sectors of the national economy".
Mr Berdimukhamedov's courting of Chevron and ConocoPhillips is therefore not surprising as they are, respectively, the second and third-largest oil and gas companies in the US. Both possess a formidable arsenal of proprietary technology. Mubadala Oil, a unit of Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, is along for the ride. Last year it announced a strategic alliance with ConocoPhillips to pursue opportunities in Turkmenistan's Caspian region. The partners had earlier teamed up to explore a Caspian oil and gas concession off Kazakhstan's coast.
Mubadala declined to say whether it was involved in talks with Turkmenistan. "Mubadala does not comment on any commercially sensitive discussions that may or may not be taking place," the company said. Nevertheless, Petrofac Emirates, a joint venture between Mubadala and the UK oilfield services firm Petrofac, last December won a big contract to develop part of Turkmenistan's giant South Yolotan gasfield in the country's eastern desert.
The dark horse among Turkmenistan's US picks is TXOil, which is not an established oil company but a raw start-up. Its chairman is Neil Mallon Bush, the son of George HW Bush, the 41st US president, and the younger brother of George W Bush, the 43rd president, and Jeb Bush, the former governor of Florida. The company's chief executive is Mark Bush, a Texan who appears to be unrelated to the political Bushes.
Neil Bush and Mark Bush both visited the Turkmen capital of Ashgabat in June. According to the Turkmen state press office, the TXOil chairman communicated "most best wishes" to Mr Berdimukhamedov on behalf of the two former US presidents in his immediate family. The Turkmen president's press office said TXOil was planning to bring "major experts and the most advanced technologies" to Turkmenistan to develop the country's oil and gas resources.
Mark Bush has founded a string of oil juniors in his 27-year business career. The companies have been in constant flux through name changes and other restructurings and few are still going concerns. One of the few, the Canadian-registered Palo Duro Energy , holds a 27 per cent non-operating interest in the Palo Duro Basin oil and gasfield in Texas. It posted a US$19.8 million (Dh72.7m) loss last year on zero revenue.
According to the TXOil web site, Mr Bush's new venture "is focused on being an active partner with the country of Turkmenistan in the realisation of the country's energy resources". "Our commitment to the environment is evident in every aspect of our operation," the company added, without specifying what its current operations entailed. firstname.lastname@example.org
Published: August 16, 2010 04:00 AM