Turkmenistan: Eni to Develop Turkmen Caspian Following Visit by Italian Prime Minister

Italian oil major Eni finalized a deal with Turkmenistan that will allow the energy giant to begin exploration in the Turkmen offshore reserve known as Nebit Dag. Turkmen officials had long been in talks with Eni officials, though the deal was ultimately ratified after a visit between Italian Prime Minister Matteo Renzi and Turkmen President Gurbanguly Berdymukhamedov. The visit marked the first of its kind by an Italian president or prime minister to Turkmenistan, and appears to have had the desired effect.

The package of agreements signed totals approximately $1.6bn in current investments, and represent an important part of European efforts to diversify its oil and gas imports. Russia currently controls a significant portion of Europe’s natural gas needs, and has threatened to raise prices or cut off portions of European gas should sanctions imposed against Russia become stronger. The measure seems to have had the desired effect, as the EU has refrained from imposing new sanctions.

Exploration and production (E&P) will begin in two offshore areas, where 510 million tons of oil and more than 600 billion cubic meters of natural gas are believed to be found. The sheer size of the available reserves has attracted major interest from other regional players, and serves as the linchpin of the proposed TAPI pipeline, which has up until now been stalled by security and investment concerns.

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News Briefs: 

  • Financial institutions located in the Middle East will loan the Uzbek nearly $700 million USD between 2015 and 2019. The Arab Coordination Group recently held meetings with Uzbek officials in Tashkent, where they pledged to provide nearly half of the funding necessary for ambitious investment projects within Tajikistan. The projects, which include equipping of medical institutions and universities, alternative energy projects and reconstruction efforts targeting the city’s crumbling sewage and water supply systems will cost upwards of $1.6bn USD.
  • Spokesmen representing Vladimir Putin demanded that NATO give a 100% guarantee that it will not attempt to integrate Ukraine into the pro-West bloc. Russian foreign ministry representatives went on to say that attempts to “subdue” Russia will not be tolerated and will inevitably fail with regards to Ukraine. The statements come amid an escalation in rhetoric coming from both sides. Earlier this week Germany’s foreign ministry indicated that “confrontation instead of cooperation” between Europe and Russia was becoming more likely as Russian forces amass on the eastern Ukrainian border.
  • Uzbek and Kazakh officials will meet to sign an array of bilateral cooperation agreements. The more than 100 agreements will extend primarily to both nations’ economies as well as to Uzbek-Kazakh trade relations. Kazakhstan and Uzbekistan have maintained cordial economic relations since 1998 and renewed in 2013 via the Strategic Partnership Agreement. The two sides will likely look to bolster nonproliferation, reconstruction and the possible “revival of the Aral Sea,” among other endeavors.
  • Kazakhstan’s Alliance Bank has finally concluded a $1.2bn debt restructuring. The bank also received approximately $1.2bn of special deposits from the Kazakh sovereign wealth fund in order to support the deal, and will likely merge with two other Kazakh banks, Temirbank and Fortebank. Alliance Bank previously underwent a debt reconstruction years ago, with the current reconstruction made possible by cancellation or reconstruction of outstanding debts.
  • Russian Foreign Minister Sergei Lavrov spoke out against the Trans-Caspian gas pipeline, labeling it an affront to Russian interests. Though construction of the TCGP still hasn’t begun, the submarine pipeline would funnel gas through Turkmenistan and ultimately into Ukraine, circumventing Russia’s pipeline infrastructure and undermining Russia’s current geopolitical control over Ukraine. The Russian foreign minister blamed the European Union for the project’s inception, while allowing that each country is afforded the right to choose its partners.

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