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Cablegate: Socar Explains Azerbaijan-Turkmenistan Oil and Gas

VZCZCXRO5128
PP RUEHLN RUEHVK RUEHYG
DE RUEHKB #0741/01 2200428
ZNR UUUUU ZZH
P 070428Z AUG 08
FM AMEMBASSY BAKU
TO RUEHC/SECSTATE WASHDC PRIORITY 5796
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUEKDIA/DIA WASHDC PRIORITY
RHMFISS/CDR USEUCOM VAIHINGEN GE PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 BAKU 000741

SIPDIS

EUR FOR MATT BRYZA; EEB FOR STEVE MANN

E.O. 12958: N/A
TAGS: ENRG EPET EINT PREL AZ TX TU
SUBJECT: SOCAR EXPLAINS AZERBAIJAN-TURKMENISTAN OIL AND GAS
CONFERENCE, BAKU, SEPT 9-10

REF: A. BAKU 717
B. BAKU 383
C. IIR 6 941 0063 08
D. ASHGABAT 817
E. ASHGABAT 958

1. (SBU) Summary: SOCAR's Vice President told Embassy
officers that the September 9-10 Azerbaijan-Turkmenistan
joint oil and gas conference will be light on debate and
heavy on official presentations, much like former Soviet
exhibitions. This format, Azerbaijan believes, will ensure
Turkmenistan's participation and continue the trend of
improving bilateral relations. Key conversation, the SOCAR
executive said, must take place on the margins, where
delegations can be more candid. Azerbaijan's and
Turkmenistan's delegations will likely be led at the First
Deputy Prime Minister level. End Summary

"Exhibition, Not Conference"
----------------------
2. (SBU) Embassy Officers met July 29 with State Oil Company
of Azerbaijan (SOCAR) Vice President Elshad Nassirov to
discuss plans for the proposed September 9-10
Azerbaijan-Turkmenistan joint oil and gas conference, which
will take place in Baku. Nassirov emphasized the unique
nature of the conference, which will involve an official
delegation from Ashgabat traveling to Azerbaijan for
participation. Until recently, Nassirov noted, such a joint
conference could not have been possible, as Azerbaijan and
Turkmenistan, struggling with Caspian Sea delimitation
issues, conflicting claims on oil and gas fields and energy
debts, had cut official relations. Over the past year or
more - since the death of the former Turkmen President
Niyazov - that relationship has been on the mend, despite
continuing unresolved issues and several bumps and bruises
along the way (reftels).

3. (SBU) Nassirov explained that the September event would be
more an "exhibition," like oil and gas shows during Soviet
times," than a conference in a Western context. Officials
from each side will be invited to make comments, without
taking questions from the audience. There will not likely be
roundtables or open debate, Nassirov said, but rather "lots
of booths with posters and literature." This format is
necessary, Nassirov said, to ensure Turkmenistan's
participation. Key conversations, he underscored, will take
place on the margins, aside from the official program.

Not for Discussion
------------------
4. (SBU) Nassirov added that several key issues would not be
on the table for discussion, including Caspian Sea
delimitation, production proposals for the disputed
Kyapaz-Serdar field and management of oil revenues. Embassy
officers noted that without these issues the conference
agenda could be rather short. Nassirov said that with
Turkmenistan "we must take one step at a time." He
emphasized that the conference would be a "discussion of
resources." Looking at his visitors, he also suggested that
participants refrain from raising human rights and democracy
issues related to Turkmenistan at the conference.

Participants
-----------
5. (SBU) Nassirov said that Presidents would not likely
participate in the conference, as it would be highly unlikely
for President Berdimuhamedov to travel to Baku again so
quickly. (The Turkmen President visited Azerbaijan in late
spring; President Aliyev has not yet traveled to Ashgabat.)
Nassirov expects the conference to be led at the First Deputy
Prime Minister level, with DPM Tachberdy Tagiyev leading the
delegation from Ashgabat. Nassirov said that European and
American officials and company representatives will be
invited, including those involved in the Nabucco pipeline
project. The SOCAR Vice President also said that GazProm and
"the Vice President of the National Iranian Gas Company"
would be invited.

Follow Up - USG Delegation
----------------------------
6. (SBU) Following the meeting with SOCAR, Embassy officers
sent the following list of U.S. officials to the MFA as
recommendations for participation:


BAKU 00000741 002 OF 002


C. Boyden Gray, U.S. Department of State Special Envoy for
Eurasian Energy
Daniel Fried, U.S. Department of State, Assistant Secretary
for European Affairs
Richard Boucher, U.S. Department of State, Assistant
Secretary for South and Central Asia
Samuel Bodman, U.S. Secretary of Energy
Anne Derse, U.S. Ambassador to Azerbaijan
Sylvia Curran, Charge d'Affaires, U.S. Embassy Ashgabat

Alternates and/or additions will be accepted. These names,
according to MFA, have been forwarded to the Ministry of
Energy and conference organizers.

Private Sector Participation
---------------------------
7. (U) The Embassy has also been in contact with ITECA, which
is organizing the conference. Private sector parties should
contact ITECA as follows:

ITECA
Nigar Muradkhanli
Conference Manager
Tel: 994 12 447 4774
Fax: 994 12 447 8998
email: conference@iteca.az

Registration and participation are free of charge.

8. (SBU) Comment: The conference - or exhibition -- stands
as a watershed event for Azerbaijan and Turkmenistan. The
bilateral relationship is still less than perfect and Caspian
delimitation issues remain, but the two sides are forming a
working relationship on offshore natural gas production and
export. Major agreements and/or contracts are unlikely to be
signed at this event, but, with Turkmenistan, Azerbaijan and
Nabucco partners in the same room for two days, progress on
production and transit could be made, as President Aliyev has
demanded by year's end.
DERSE

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