Turkmenistan pushes Trans-Caspian Pipeline at environmental conference

Turkmenistan has made another step to promote a pipeline across the bed of the Caspian Sea, this time at an environmental conference in the capital Ashgabat on February 28th.

The event, entitled "Environmental Aspects of Trans-Caspian Pipelines" was apparently attended by 300 representatives from twenty countries. Concrete information, as usual in the reclusive state, is hard to come by but representatives of Chevron, Statoil, Dragon Oil, and OMV were all apparently present. Official Turkmen websites said that the conference was intended to increase the odds of a Trans-Caspian Pipeline (TCP), which would carry gas from Central Asia to Azerbaijan, stating that the event will assist in the “search for specific ways and solutions to this critical issue [ i.e. building a TCP] that will let us approach the common goal to turn the Caspian region into a region of peace and wellbeing.”


Russia and Iran staunchly oppose the construction of a TCP. Ostensibly their concerns are legal and environmental: that the status of the Caspian has not yet been settled between all five littoral states (particularly regarding whether the Caspian is a sea or a lake), and that – absent such a legal framework – any subsea hydrocarbon projects must be agreed upon by all five littorals. This is disingenuous, ignoring the extensive oil and gas extraction which all five states currently undertake near their coastlines and which is certainly capable of creating a Caspian-wide ecological disaster.

The real reason is political and commercial: neither Moscow nor Tehran want additional pipelines to emerge which could transport Central Asian energy to world markets without crossing Russian or Iranian territory. This position was reiterated by Russian President Dmitry Medvedev at a Caspian heads-of-state summit in Baku during November. However on that occasion President Berdimuhamedov offered a defiant note, insisting that only the two participating states – i.e. Turkmenistan and Azerbaijan – had to agree on a project. Azerbaijan has repeatedly agreed to the idea in principle, and reiterated that position at the environmental conference.

Having apparently addressed the legal challenges in Baku, the Turkmen leader has now sought to address the environmental challenges in Ashgabat. The vague statements that emerged from the conference emphasise the need for the highest environmental standards to be adhered to in any subsea engineering project, and that – thanks to the experience of international companies represented at the forum – these standards could certainly be applied in the Caspian. Interestingly, no Russian or Iranian companies were publicly stated as having attended the conference.

This implies that Turkmenistan is more serious about committing to a TCP than often assumed. Disputes with Azerbaijan over ownership of certain fields, Russo-Iranian opposition and China's efforts to secure Turkmen gas, not to mention Turkmenistan's opaque decision-making, were all seen as major obstacles. President Berdimuhamedov's increasingly proactive and independent foreign policy seems to be changing all that.

Sources: Turkmenistan.ru, News.az, Trend.az

For more news and expert analysis about the Caspian region, please see Caspian Focus.

Algeria: Law firm appointed to advise on valuation of 'Djezzy'

On Monday 10th January, the government provisionally appointed London-based Shearman & Sterling LLP to advise it on the nationalisation of Orascom Telecom's local mobile phone unit, known as Djezzy, and has been instructed to complete a valuation within 100 days. The future of Djezzy is the subject of a long-running dispute between the Algerian government and Orascom telecom.

Djezzy's future has been the subject of almost limitless speculation. Having blocked Djezzy's sale last year to South Africa's MTN, it then looked as if a US$6.6 billion deal with Russia's Vimpelcom might be on the table, especially as Russia's President Dmitry Medvedev made what appears to have been a rather abortive visit to Algiers to expedite the deal. There have recently been rumours that France Telecom may yet have a role to play.

It has long been believed that the Algerian government wants Djezzy for itself, hence the continuous blockages, in the form of fines, back taxes and restrictions on profit transfers that it has erected to thwart any move by Orascom to dispose of Djezzy to any other international player.

In spite of Algeria's obstructive tactics, there is still no clarity about whether the State will actually buy Djezzy, how much it is prepared to pay and how long the process will take. One senses that the appointment of Shearman & Sterling may not even be the 'beginning of the end'.

For more news and expert analysis about Algeria, please see Algeria Focus and Algeria Politics & Security.

© 2010 Menas Associates

Orascom Telecom sells assets to Russia's VimpelCom

Orascom Telecom, one of Egypt's most popular traded shares, rose 5.5 per cent after the announcement that it had reached a US$6.7 billion deal to sell some of its assets to the Russian company VimpelCom.

The deal is complex and will take some time to unravel. It means that Neguib Sawiris, the billionaire tycoon owner of Orascom, will be even richer. He said that the assets not included in the deal: Egypt's Mobinil and a mobile phone company in North Korea, among others, would be bundled into a new company next year.

The deal may or may not speed resolution of the dispute between Orascom and its subsidiary in Algeria, Djezzy. Hopes that Russia's President Dmitry Medvedev might smooth the way for a resolution of the dispute over Djezzy have yet to emerge.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

© 2010 Menas Associates

Azerbaijan and Russia sign another gas deal

Gazprom has secured an agreement to supply State Oil Company of Azerbaijan Republic (SOCAR) with double the amount of Russian gas in 2011, expected to total at 2billion m³. Under the agreement, Azerbaijan is expected to increase gas imports from Russian even further by 2012.

The agreement signed by Russia's President Dmitry Medvedev and Azerbaijan's President Ilham Aliyev is the third gas purchase agreement signed in the past year between the two countries. The first agreement, signed in October last year, provided for Russian purchases of 500million m³ of gas annually.

During a joint news conference on Friday 3rd September , President Aliyev said the gas deal with Russia was “open and sincere.” He also took the opportunity to reassure Azerbaijan's Western partners that energy co-operation with Russia would not come at their expense, saying "We don't see our work in the gas sector as an opportunity for unfounded competition. We are working not on the basis of political concerns, but economic practice".

Talking about the latest deal with Azerbaijan, President Medvedev said that both countries are serious, “gas suppliers,” and will not create obstacles for one another when it come to co-operation with international energy majors.

Source: EurasiaNet

For more news and expert analysis about the Caspian region, please see Caspian Focus.