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Qishloq Ovozi

Police have a more visible presence around the Turkmen capital, Ashgabat. (file photo)
It's been difficult to know exactly what is happening inside Turkmenistan for some two decades now.

Only small snippets of information get out about the social situation and the lives of the people living there.

These bits of news from Turkmenistan are faithfully chronicled by the websites of Turkmen outside the country, but generally focus on the negative aspects of governance in the country (and there are many of those).

One young person from RFE/RL's Turkmen Service, Azatlyk, returned to Turkmenistan earlier this year after four years outside the country.

Young enough to be termed a member of the Altyn Asr ("Golden Era") generation (i.e. the supposedly "blessed" generation who came of age under the "wise leadership" of Saparmurat Niyazov following Turkmen independence in 1991), this individual recounted to Qishloq Ovozi what was different and what was the same.

Not everything there is bad it seems.

(Note: Given the nature of the Turkmen regime, Qishloq Ovozi is withholding the name of this RFE/RL colleague who still has family and friends back home)

We shall call our young Turkmen friend the "Vatanchi (Homelander)."

The customs official at Ashgabat airport had a predictable welcome for Vatanchi. "What were you doing there [in Prague]?" he "rudely" asked. Another customs official arrived and the two engaged in a brief, hushed conversation. Vatanchi was waved through.

Only four years after Vatanchi last looked upon Ashgabat, the downtown appeared different Vatanchi said the current Turkmen president's love of white marble buildings has turned central Ashgabat into a monotonous assortment of various government and commercial buildings that bear a strong resemblance to one another.

Buildings that pre-dated President Gurbanguly Berdymukhammedov, or even Turkmenistan's independence, and once broke up the long blocks of white, new buildings have been almost all razed.

Just outside the city center the buildings have fresh coats of paint but Vatanchi said there is no change to the apartment buildings inside.

Vatanchi noticed changes while walking around the capital. Some old women, Vatanchi lamented, are forced to try to sell small items -- socks, onions -- on street corners to get money, which our young Turkmen friend said is a great shame in a culture that usually holds its elders in high esteem.

There are more cars on the roads, even more luxury cars. In fact, Vatanchi noticed that more people seem to have more access to money now than they did four years ago.

Vatanchi was not convinced that was a good thing since the general poverty of nearly all had previously formed a strong bond among the people. Now, Vatanchi said, there is a small economic gap opening up between the people in Ashgabat.

The list of available goods sounded promising. Vatanchi said people were wearing Western clothes; most young people seemed to have mobile phones and the selection of food was much better.

But Vatanchi noted, "Internet connections are a problem."

Police are more visible around the city, but Vatanchi said their presence is hardly necessary.

"You can feel the presence of the security service. It's a feeling you're controlled, watched," Vatanchi said.

Restrictions on traveling within the country have eased and it is now possible to drive from one city to another without any problems. But inside the cities there is a (undeclared) curfew at 11 p.m. and the streets are empty.

Sadly, but understandably, people are politically apathetic. No one wants to talk about politics, certainly not Turkmenistan's domestic politics.

The Turkmen people are not apathetic about community concerns, however. In the past, the people addressed complaints about utilities or poor roads to the country's president to try to scare city or district officials into taking some action.

Now people tell these officials, "I will complain to Azatlyk if the problem is not solved," Vatanchi said, adding that some have traveled to neighboring Uzbekistan just to get a phone or computer connection to Azatlyk and vent their grievances.

-- Bruce Pannier
An oil rig and infrastructure of D Island, the main processing hub, at the Kashagan offshore oil field in the Caspian Sea on August 21
April is the month people involved in Kazakhstan’s massive Kashagan oil-field project have been waiting for, and many have been dreading.

The consortium operating the oil field is due to present the results of inspections that determined why the frequently delayed project suspended work in September, just weeks after production finally started when the pipeline started leaking.

And more importantly, North Caspian Operating Company (NCOC) should be able to give a new date for when production would start again.

But it appears the news is worse than most expected.

NCOC is expected to release findings soon that show toxic gas has corroded the pipelines leading from the offshore field to the mainland; that those pipelines will need to be totally replaced with much more durable, and expensive, new pipe; and that it will be at least two years until commercial production starts at Kashagan.

Kashagan has proven an elusive prize. The field contains an estimated 13 billion barrels of recoverable oil reserves, one of the largest oil fields discovered in the last 50 years.

But as Jennifer DeLay, senior editor at "FSU Oil & Gas Monitor" (a publication of the Scotland-based Newsbase group), told Qishloq Ovozi, the project is already almost a decade behind schedule and the estimated cost of the project has shot up from the original $50 billion to $135 billion, and that is not counting the cost of the new pipe that seems now to be required.

Some now refer to Kashagan as “Cash-all-gone.”

Steve Levine, who I think anyone would agree is a leading authority on Kazakhstan’s oil sector, wrote on April 6 that the new pipeline will need to be made of a nickel-based alloy that can cost 10 to 15 times more than ordinary pipeline.

And according to Mr. Levine, two nearly 90-kilometer pipelines -- one for oil and one for gas -- will need to be replaced.

Kazakh officials have said the failure of Kashagan to start production is reducing the country’s economic growth forecasts by 2-3 percent.

And the Kazakh government is showing its impatience. The Ministry of Environmental Protection hit the NCOC with a $737 million fine on March 7 for flaring sour gas at Kashagan’s processing plants during the brief time the field was producing.

Just before the announcement of the fine, then-Prime Minister Serik Akhmetov said production at Kashagan could start again by the middle of this year or maybe sometime in the second half of the year.

As mentioned, this is only the most recent problem in a project that has been plagued by setbacks from the start.

DeLay of the "FSU Oil & Gas Monitor" explained that going into the project everyone knew there was big money to be made but there were also some serious challenges to be overcome.

She said high reservoir pressure and high sulfur content posed technical difficulties, and the project “also had to build a platform capable of operating in ice conditions, since the field is located in a section of the Caspian Sea that freezes over in the winter.”

The shareholders in the NCOC consortium have also changed since it was formed in 1993 under a different name (Kazakhstancaspiishelf).

DeLay recounted that Italy’s Eni was appointed to act as the project’s operator in 2001, the same year BP and Statoil sold their shares to other partners and left the project. Eni became the operator of the project in part because the Italian company pledged to start production at Kashagan by 2005.

In 2003 BG followed, but only after the company tried to sell its shares to Chinese companies CNOOC and Sinopec, a move that was halted when consortium partners invoked their preemptive privilege. Kazakhstan’s government took half of BG’s shares, transferring them to KazMunaiGaz, and the other half of BG’s shares were shared out among the consortium partners.

ConocoPhillips tried to sell its 8.4-percent stake to India’s ONGC-Videsh in 2012, but that sale was preempted by the Kazakh government, which later sold the shares instead to the China National Petroleum Corp (CNPC), the same month Kashagan started production.

Currently the consortium comprises KazMunaiGaz 16.81 percent, Eni 16.81 percent, ExxonMobil 16.81 percent, Shell 16.81 percent, Total 16.81 percent, CNPC 8.40 percent, and Japan’s INPEX 7.56 percent.

Some have speculated the Kazakh government might use this latest postponement in production at Kashagan to acquire more shares in the project. The Kazakh government has previously used large fines as a bargaining chip to get shares in projects on Kazakhstan’s territory.

There is also a 2007 law in Kazakhstan that gives the government the right to alter or cancel contracts with foreign oil companies if their activities are deemed to be threatening the national interest.

But DeLay said she did not think the Kazakh government would take such a step just yet. “I would speculate that the government might not be willing to take such a step any time soon, given that yet another shift in the shareholder lineup might lead to even more delays.”

The NCOC website does state: “The Kashagan project is one of the most challenging projects ever undertaken.”

-- Bruce Pannier with contributions from Yedige Magauin of RFE/RL's Kazakh Service

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About This Blog

Qishloq Ovozi is a blog by RFE/RL Central Asia specialist Bruce Pannier that aims to look at the events that are shaping Central Asia and its respective countries, connect the dots to shed light on why those processes are occurring, and identify the agents of change.

Content draws on the extensive knowledge and contacts of RFE/RL's Central Asian services but also allow scholars in the West, particularly younger scholars who will be tomorrow’s experts on the region, opportunities to share their views on the evolving situation at this Eurasian crossroad.

The name means "Village Voice" in Uzbek. But don't be fooled, Qishloq Ovozi is about all of Central Asia.


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