Turkmenistan

Throughout the first fifteen years of development in the Caspian oil & gas sector, Turkmenistan-the mainstay for Caspian gas production-, together with the rest of the South Caspian Sea, has proven too risky for the major international oil and gas companies. As a result, too little is know about the true hydrocarbon reserve and production potential of Turkmenistan.

Despite considerable efforts, no independent oil and gas export routes have emerged apart from a spur to Iran (the Southern ‘Korepzhe-Kurt Kui’ line). Instead, Turkmenistan has invested in the rehabilitation and replacement of Soviet built infrastructure rather than stimulating foreign investment in its upstream production and export potential.

Despite the paucity of data, it is generally believed that Turkmenistan has the world’s fourth largest reserves of natural gas. Turkmenistan remains confident it can serve all potential customers on the medium to long term. However investors first need more insight into geological data, and assurances on long-term investment and export conditions. Here outstanding delimitation issues with Iran and Azerbaijan, as well as Russian and Iranian objections to any Trans- Caspian gas export routes, continue to complicate oil and gas sector development. In respect of international energy sector governance, Turkmenistan is a member of the Energy Charter Treaty that sets important international standards for policy cohesion and rule of law in the energy sector.