Turkmenistan Muddles On, But Risks Crisis: RIIA Report
“Turkmenistan's petro-authoritarianism is likely to continue to be fuelled by a combination of its large natural gas reserves, small population and steady global demand for natural gas,” writes Annette Bohr of UK think tank Royal Institute of International Affairs, known as Chatham House.
In her report published this week, the associate fellow of Chatham House’s Russia and Eurasia programme describes how revenues from oil and gas exports are used by the leadership to bankroll pervasive security services and patronage networks. Data for the last three years show the country's overall gas production, as well as its consumption and exports, rising steadily – with production of 83.8bn m3 in 2015.
However Turkmenistan has yet to capitalise fully on its position as a ‘gas giant’ and faces considerable challenges in every direction in getting its gas to market, her report argues. Exports to China should continue to provide a reliable stream of revenues, but the slump in world energy prices and the cessation of gas exports to Russia and possibly to Iran mean that Turkmenistan still needs to hedge its bets.
In the event of a dramatic economic downturn, Ashgabad might reconsider its current stance of limiting production-sharing agreements for foreign firms to offshore oil and gas blocks, the report interestingly notes.
Many of fields under development, or pending development, are challenging “with high pressure, high temperatures and a below-the-salt location at great depth – requiring not only investment, but also technical and managerial expertise.” They include sour gas fields, with high hydrogen sulphide content, such as the Galkynysh/South Yoloten complex.
Bohr describes the Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline project as “still a pipe dream”, despite “avid support from the US."
Turkmenistan also has “no compelling need to reverse its policy in order to seriously pursue the [2,000km] Trans-Caspian Pipe (TCP) project” – which would pass under the Caspian Sea – despite the 30bn m3/yr scheme’s potential to link up with pipes now under development linking Azerbaijan to the European market, via Turkey, Greece, Albania and Italy.
The report argues that corruption and a general lack of transparency continue, with virtually no information available on the budget and government spending, while President Berdimukhamedov’s Ahalteke clan remains predominant in governing institutions and business networks.
The full report ‘Turkmenistan: Power, Politics and Petro-Authoritarianism’ can be accessed here .
Mark Smedley