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Turkmen Report: November 11, 2000


11 November 2000
NATIONAL AND REGIONAL NEWS
Shikhmuradov: Sanctions Won't Work
Friday,10 November 2000

Turkmenistan's Ambassador at large, Boris Shikhmuradov, spoke at a forum organized by the Central Asia and Caucasus Institute of Johns Hopkins University, in Washington, DC. In remarks to Itar-Tass concerning Afghanistan, Shikhmuradov underlined the importance of bringing peace to that country. He termed Russia an "important factor" in any settlement and denied the utility of sanctions in resolving what he termed the Afghan question. Shikhmuradov also noted that the effectiveness of the so-called 6-plus-2 group had declined, with members of the group pursuing their individual national objectives rather than fostering a settlement in Afghanistan. (Itar-Tass)

Ashgabat, Astana Prefer Oil Exports Via Iran
Thursday, November 9, 2000

Turkmen TV coverage of a meeting between Turkmen President Saparmurat Niyazov and Kazakstan's Ambassador in Ashgabat, Amangeldy Zhumabayev, underscored the two countries shared interest in seeing oil exports flow to international markets via Iran. In the context of efforts to set the agenda for a future session of the joint Kazak-Turkmen political consultative council established last April, Niyazov proposed taking in hand cooperation in the oil and gas sector followed by limitation of the state borders. On the border delimitation issue, Niyazov noted "there was not a single point of disagreement." On cooperation in the hydrocarbons sector, Turkmen TV opined that both countries prefer multiple export routes and therefore "it is in the interests of both countries to concentrate their efforts, in particular, on the Iranian direction." (Interfax, Itar-Tass)

Kaluzhny Beats Old Drum On Caspian Delimitation
Thursday, November 9, 2000

Russian President Vladimir Putin's special envoy responsible for Caspian affairs, Deputy Foreign Minister Viktor Kalyuzhny, used his attendance at a two-day international conference on developing the Caspian's offshore hydrocarbon wealth to reiterate Moscow's position that it does not support dividing the Caspian waters into national sectors. Kalyuzhny, who is a former Fuel and Energy Minister, also said that Russia is, however, ready for further talks on the status of the Caspian Sea. (Itar-Tass, RFE/RL)

Taleban Seek To Reopen Port On Afghan-Turkmen Border
Wednesday, 8 November 2000

A delegation of Taleban officials led by Deputy Minister of Commerce Fazl Mohmmed Faizan visited the port of Keleft, on the banks of the Amu Darya river, in Jowzjan province, recently. The port has been closed for 20 years and the officials seek to reopen it to promote cross-border trade and resolve fuel supply problems in Afghanistan's northern provinces. Turkmenistan's views on reopening Keleft are unknown. In years past, Afghanistan's northern provinces were supplied with oil coming from Termez, Uzbekistan. ( RFE/RL )

Gas Production Update
Tuesday, 7 November 2000

Turkmen gas production has risen steeply on the back of export contracts. Gas production of 37 billion cubic meters (3.57 billion cubic feet/day) was recorded in the first 10 months of 2000, double the Turkmenistan's 1999 output . The bulk of production, 26.5 billion cubic meters, is exported. State-owned Turkmengaz is flowing 97-100 million cubic meters of gas into the Central Asia-Center gas pipeline system. Volumes are also being exported from the west via the Central Asia-Center III gas pipeline, through Kazakstan, after it was restored this year. Natural gas output in western Turkmenistan rose 40% on the same period last year, to 4.3 billion cubic meters (415 million cubic feet per day). Of this volume, 2.5 billion cubic meters went to Iran and Russia. State oil company Turkmenneft produced 5.3 million metric tons (38.8 million barrels) of oil and natural gas liquids (NGL's) in the first 10 months of 2000, approximately 300,000 metric tons up the same period last year, in western Turkmenistan. (TDH, Turkmen State News )

Tap-Toeing To The Resurrection?
Tuesday, 7 November 2000

During a short, unplanned stopover in Turkmenistan, Pakistan's leader and the Turkmen president discussed resurrecting the Turkmenistan-Afghanistan-Pakistan (TAP) pipeline project. Foreign Minister Abdul Sattar said Pakistani leader General Pervez Musharraf and Turkmen President Saparmurat Niyazov held talks reviving the politically risky project tabled first by Argentina's Bridas in the early 1990s. The CentGas consortium , led by Unocal, took over but suspended all activities on the project in August 1998, when the US launched cruise missiles in August 1998 at suspected terrorist training camps in Afghanistan belonging to Osama bin Laden. (RFE/RL)

FEATURES AND ANALYSES
Pressure Increasing On Gazprom About Gas Deals With Itera
Friday, 10 November 2000

By Michael Lelyveld

Pressure has intensified on Russia's Gazprom to disclose details of its dealings with the gas-trading firm Itera as former Finance Minister Boris Fedorov demands answers from the country's biggest monopoly.

The Financial Times reported Wednesday that Fedorov, a Gazprom board member, has sent a letter to the company's management, asking pointed questions about links to Itera, which reportedly made a profit of 3,000 million dollars last year by selling gas, most of which came from Gazprom.

Executives of Itera, a private firm with offices in the U.S. southern state of Florida, have repeatedly refused to provide information about its ownership, although the company has denied that officials of Gazprom or the Russian government have secret shares. Many industry analysts and foreign investors have voiced doubts.

In his letter, Fedorov asked, "Why is Gazprom selling gas to Itera, when its own production is falling and it has to buy gas from Turkmenistan to fulfil its own obligations?"

Fedorov noted that Itera has grown rapidly from a trading firm into a production company, developing former Gazprom fields which are expected to yield 20,000 million cubic meters of gas this year (1.9 billion cubic feet per day), 12 times more than it produced two years ago. After taking its first steps in the gas business in 1994, Itera has grown astronomically. The company says it has some 120 subsidiaries in 24 countries.

Fedorov asked, "Why does Gazprom transfer its reserves to Itera?" and he added, "As a member of Gazprom's board and a shareholder, I ask you to give me official answers to the posed questions."

There is little new in the issues raised by Fedorov, but his apparent attempt to pursue them through the foreign press may be a sign of growing frustration with the government's failure to deal with them.

The questions are critical for the government because it is Gazprom's biggest shareholder, with a 38 percent ownership interest. The monopoly is also the country's largest taxpayer, as well as the world's biggest gas company. But at a time when Gazprom is raising tariffs on domestic consumers and negotiating a deal to double its exports to Europe, there is little public information about the company's use of its income or assets.

In the first nine months of this year, Gazprom's production fell by over 5 percent, a situation it blamed on cash shortages and lack of investment. But the company's operating profits rose nearly five times, as world energy prices climbed. Both Fedorov and industry analysts suspect that Gazprom's assets are being shifted to Itera.

It is also unclear why Gazprom continually turns to Itera to sell its gas to other CIS countries. In most of these cases, there is no competition. The interstate deals usually involve a monopoly buyer and a monopoly seller. Any profit could presumably be retained by Gazprom, if it chose to conduct the sale itself. Itera has estimated that it will handle sales of 74,000 million cubic meters (7.1 billion cubic feet per day) of gas within the CIS and the Baltics this year.

The State Duma's Audit Chamber has opened an examination of Gazprom with results due sometime next month. But as time passes, the government's silence on a matter of such economic importance has raised doubts about its overall reform plans.

More than four months have passed since the government of President Vladimir Putin forced the ouster of former Prime Minister Viktor Chernomyrdin as chairman of Gazprom, replacing him in late June with the deputy head of the presidential administration, Dmitri Medvedev.

With the move, the government took control of five seats on Gazprom's 11-member board. Two other seats are held by Fedorov, as an independent shareholder, and a representative of Germany's gas company Ruhrgas. A combination of these seats would seem to be enough to push through reforms with a majority, if the government were truly interested. Instead, there has been little sign of any move to lift the veil over the secrecy surrounding Itera and Gazprom.

While new developments could come at a Gazprom board meeting later this month, it is notable that Putin has chosen to deal with the Gazprom issue in a very different way from his confrontations with Russian oligarchs, such as Vladimir Gusinsky and Boris Berezovsky. In those cases, Putin moved quickly to stage showdowns with powerful interests and to demand payments of taxes and debts under threat of prosecution and imprisonment.

No similar action has been taken on Gazprom, although its dealings may have a far larger impact on Russia's economy and consumers. If Fedorov is unable to get answers, the results may be more questions about the limits of government power and reform./ oz/

Kazakhstan: Musharraf's Visit Focuses On Taliban
Wednesday, 8 November 2000

By Bruce Pannier

Afghanistan's neighbors in Central Asia have for years been pointing at instability in that country, and the rise of the Taliban militia there, as a major source of the region's problems, including terrorism and narcotics trafficking.

Officially most countries in the region say the Afghan civil war, which pits the Taliban against an opposition force based in the north of the country, can only be resolved through diplomacy. But most are also thought to be supporting one of the factions in the fighting.

That support, until recently, was mostly aimed helping groups opposed to the Taliban, but the visit this week to Kazakhstan by Pakistani ruler General Pervez Musharraf indicates the Afghan militia may be gaining in regional support. Pakistan is one of only three countries that recognizes the Taliban government.

To coincide with Musharraf's visit, Kazakh President Nursultan Nazarbaev yesterday issued a statement saying his government is now ready to hold talks with representatives from all movements in Afghanistan, including the Taliban. Nazarbaev had previously been a critic of the Taliban.

Kazakh Prime Minister Kasymjomart Tokaev reinforced the statement today, saying it is important foreign governments do not interfere in Afghanistan's internal problems. Tokaev also said he met with Taliban officials in Pakistan last year:

"We consider that the Taliban movement, which is the dominating force in Afghanistan, should not be ostracized in any way. Last year in March, by order of the president, I was in Islamabad where I met with Taliban officials. I said then that we considered the Taliban movement as the dominate and a serious political force in Afghanistan, from both a political and military point of view."

Before arriving in Kazakhstan, Musharraf made an unscheduled stop in Turkmenistan, which has adopted a neutral policy toward the factions in Afghanistan. Musharraf met with Turkmen President Saparmurat Niyazov, and the two underscored the possibilities of a Central Asian-Pakistani trade corridor via Afghanistan.

Pakistani Foreign Minister Abdul Sattar took that a step further today in the Kazakh capital Astana by saying a Central Asian-Pakistani trade corridor via Afghanistan offers Kazakhstan an export route and customer for its energy and other exports:

"We would very much like to be part of transit arrangements and import arrangements for gas from Turkmenistan and eventually oil from Kazakhstan."

Kazakhstan's softened attitude toward the Taliban brings the country into line with the other Turkic-speaking Central Asian states.

Uzbekistan and Kyrgyzstan had also been among the leading critics of the Taliban, especially after Islamic militants made incursions into both countries in 1999 and again this year.

But a month ago, Uzbek President Islam Karimov made an about-face and said he does not think the Taliban poses a danger to the Central Asian republics. Days later, Uzbek Foreign Minister Abdulaziz Kamilov said Uzbekistan's ambassador in Islamabad held meetings with Taliban representatives in Pakistan.

Kyrgyzstan followed soon after, saying it would recognize any Afghan government that had the support of the majority of Afghanistan's people. This is a far cry from the support the Kyrgyz government gave to a Russian idea this year of preventive strikes against terrorist bases located on Taliban-controlled territory in Afghanistan.

How an improvement in relations with the Taliban can help the Central Asian states remains to be seen. It could strain relations with Russia, which has accused the Taliban of harboring and helping terrorists, notably what Moscow calls Chechen terrorists.

More immediately, improved relations with the Taliban could damage existing ties to the other Central Asian neighbor, Tajikistan.

Tajik President Imomali Rakhmonov is in Tehran today to meet with government officials there. Afghanistan is already announced as a main topic of the talks. But in Tajikistan's case it could be difficult to court better relations with the Taliban. The Northern Alliance fighting the Taliban is led by ousted Afghan President Burhanuddin Rabbani and his defense minister, Ahmad Shah Masoud, both of whom are ethnic Tajiks.

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